How Does Contingent Workforce Staffing Work?

Today’s labor market is highly volatile, and businesses are investing all they can to gain and maintain a competitive edge. And with unplanned attrition and skill shortages causing budget overruns and project delays, more companies are struggling to stay profitable.

Savvy organizations are avoiding this by leveraging an on-demand workforce. According to a report by Success Factors and Oxford Economics, 83% of executives admitted to using contingent workers as of 2020. Additionally, the Contingent Workforce Management Market Research Report projects an industry growth of 2.23% CAGR between 2023 and 2029.

A Quick Overview of Contingent Workforce Staffing

Contingent workforce staffing involves recruiting temporary or contract workers on an as-needed basis. They typically fulfill specific roles or complete projects within a predetermined duration. 

Contingent staffing has become increasingly significant in the modern workspace thanks to its cost-effectiveness and flexibility. This strategy lets you adapt to evolving business needs, scale your personnel on demand, and secure specialized skills for short-term projects. It also enhances organizational agility and gives you an edge in a dynamic business environment.

Some real-life examples of businesses leveraging contingent workers include:

• Seasonal retail workers: Retailers hire temporary workers to address the increased customer demand during peak shopping seasons. 
• Events: Event organizers rely on contingent staff to help with ticketing, security, logistics, and customer inquiries. 
• Healthcare: Hospitals hire locum doctors and nurses to stand in for absent healthcare professionals and meet fluctuating patient demands.
• Education: Institutions rely on adjunct professors to teach specialized classes and manage temporary enrollment surges.
• Finance: Finance and consulting companies require extra help during tax season, financial audits, and other peak durations. They might also hire IT professionals to upgrade and maintain their systems.
• Construction: Building projects require additional manpower for specialized roles such as plumbing and electrical work.

Why Use Contingent Staffing?

Businesses that implement contingent staffing aim to stay cost-effective, adaptive, and responsive to market dynamics. This strategy benefits your organization in the following ways.

Access to Specialized Skills

Contingent workers offer specialized skills that aren’t available within your in-house team. This can include technical expertise or proficiency in certain tools and technologies. This way, you can enjoy creative solutions without burdening your resident workforce beyond their core strengths. 

Optimal Scalability

Contingent staffing tailors your workforce to seasonal fluctuations and varying project demands. You enjoy a balance between agility and stability, addressing understaffing during peak season and overstaffing when it’s slow. Such adaptability is especially useful for sectors with cyclical demand, like hospitality, where hotel bookings and travel patterns depend on the weather, school calendars, and local festivals. 

Reduced Overhead 

You’ll only pay a pre-determined rate for the freelancer’s input. As such, you don’t incur permanent employee benefits like paid time off or health coverage. Contingent workforce staffing also provides flexible work arrangements—you’re not obligated to retain an employee once a project is complete. Additionally, note that independent specialists handle their own tax responsibilities—all you have to do is provide a 1099 form.

Save on Training Costs

Because they’re already experts in their fields, contingent employees can get to work immediately without additional training. You only need to familiarize them with your company’s processes for streamlined workflow. The rapid deployment also reduces project delays for maximum productivity.

Tips for Effective Contingent Workforce Management

The efficiency, convenience, and cost-effectiveness of contingent staffing depends on its implementation. Here’s how to enhance your workforce strategy:

Define the Business Functions That You Can Delegate

Review your workload and divide it between your in-house team and contingent staff. For instance, full-time employees are best suited for your core competencies due to their institutional knowledge.

Their understanding of your company’s vision and quality standards makes them better placed for long-term projects. On the other hand, contingent workers can manage seasonal workloads with specific targets and timelines. This way, you can meet your fluctuating needs without long-term monetary commitments. 

Review the Volume of Work to Delegate

Estimate an assignment’s duration for effective budgeting and management. Make sure to budget for security overhead and tax obligations to ensure compliance. The next step is determining how many specialists you need.

You can use past projects to better understand your current staffing requirements. Moreover, consult team members and clients on the timelines and scope of work. You should also account for any uncertainties that can delay the project. For example, extra contacts keep your work on schedule in case of illness and other uncertainties.

Pick a Workflow Method

Create a workflow that matches the project volume and the size of your contingent team. For example, you can communicate through phone calls, emails, and messaging apps if you manage a small team. But if you handle larger volumes, productivity apps allow you to assign and track a project’s progress without back-and-forth emails.  

Establish a Transparent Workflow

Transparent workflows ensure everyone understands their roles to avoid confusion, miscommunication, and delays. For starters, equip your team with all the necessary resources, making sure to articulate instructions, prepare contract templates, and define payment terms. Additionally, create dynamic feedback mechanisms to boost employee morale and determine areas of improvement. 

Start Hiring

Depending on your industry and nature of work, you can find contingent workers on various platforms, including job boards, social media, and online communities. You could also seek referrals from your business associates, contract staffing agencies, or announce vacancies on your company website.

Another option is using direct sourcing to build a talent community instead of relying on third-party recruiters. Doing so builds a long-term relationship for faster re-engagement instead of going to the labor market whenever you have an opening.

Vet the Candidates

One-on-one interviews offer a personalized experience and in-depth assessment for small candidate pools. But if you receive many applications, you can filter candidates using applicant tracking systems before testing their job-specific competencies. For instance, technical positions might require mechanical reasoning tests to evaluate a candidate’s fundamental skills.

Onboarding

Introduce successful applicants to other team members to foster collaboration. You can also explain their roles and familiarize them with your company culture and values. Furthermore, establish a regular routine to address arising challenges and measure the project’s progress.

Offboarding

Create an exit strategy once the employee’s contract expires. Offboarding can include:

• Returning company property
• Transferring responsibilities to another employee
• Finalizing payments
• Exit interviews
• Farewell meetings or parties
• Revoking email access

Contingent Workforce Staffing: A Way Forward 

Contingent workforce staffing is a cost-effective and flexible alternative to traditional HR recruitment. In addition to complementing your in-house team, contingent workers free up your workload to create time for your core competencies.

Do you want to future-proof your human resources against market volatility? Contact nextSource today to discuss your contingent workforce options.