According to McKinsey, 58 million Americans did some form of independent work in 2022 and that number has only risen over the past year. The number of contract and temporary job openings in the US rose around 26% in 2023 as employers look to maintain growth and productivity with tighter budgets. But with 80% of executives planning to expand their use of contingent, temporary, and seasonal workers it’s important that HR and talent acquisition teams understand how to get the most from their changing workforce through effective contingent workforce management strategies.
Understanding the Contingent Workforce
Contingent workers are not traditional, full-time employees, instead, they are hired to fulfill specific tasks, projects, or roles within a limited timeframe. The contingent workforce includes freelancers, individuals hired for short-term projects or gigs; contractors, professionals engaged for specific tasks under a contractual agreement; temporary employees, who work for a predetermined period often through staffing agencies; and part-time workers, who work fewer hours than full-time employees.
Engaging contingent workers can be extremely beneficial for an organization because they:
- Are cost-effective
- Allow access to diverse skills and experience
- Can be engaged flexibly for single projects or to cover seasonal peaks
- Can scale based on your demand and business needs
Contingent Workforce Management Best Practices
Whether you have hired contingent workers before or are newly considering taking on temporary or seasonal workers to assist with high demand or a specific project it is important to put in place contingent workforce management strategies and best practices that will help you get the most from your teams:
- The first step is to make sure that your staffing plans meet your wider organizational objectives through a comprehensive workforce planning strategy.
- Once you’ve estimated your needs you can start hiring! If you are hiring contingent workers at volume you can look at simplifying your hiring processes and reactivating talent already in your systems.
- To make sure your contingent workforce has everything they need for success put in place as much documentation as possible – contract templates, job descriptions, access keys and instructions – in advance.
- Good onboarding is extremely important for a contingent workforce. You want to make sure workers can get started quickly and become productive as soon as possible.
- You can use data analytics to assist in smart decision-making when managing your contingent workforce and make necessary adjustments for ongoing improvement.
- Communicate with your contingent workforce regularly, updating them on any changes to deadlines or workload as soon as possible. Including them in your regular team emails, calls and meetings can help them feel part of the group.
Overcoming Challenges in Contingent Workforce Management
Managing a contingent workforce presents unique challenges for businesses. These challenges require strategic solutions to ensure contingent workers are integrated effectively:
1. Addressing Diversity and Inclusion
When hiring contingent workers, particularly at scale, it can be difficult to make sure you are tapping into new and diverse talent pools and providing an environment that accommodates different needs and backgrounds. Luckily, there are many strategies to help you build a diverse contingent workforce and manage it effectively. Developing a positive and inclusive workplace culture can help attract a wide range of talent. Fair and unbiased hiring practices alongside diversity training programs for hiring managers ensure equal opportunities for all and foster a sense of understanding. Setting up mentorship schemes and affinity groups can offer support and encouragement to workers from diverse groups.
Finally, developing a relationship with an RPO partner can help you widen your search, use a variety of sourcing methods and access new communities and talent pools you may have overlooked, helping you bring various perspectives and skills to the table.
2. Risk Mitigation
Employing contingent workers offers flexibility and agility but comes with inherent risks. Major concerns associated with contingent workforce management include:
- Compliance with tax and legal regulations
- Isolation from company culture
- Lack of knowledge transfer and loss of expertise
Organizations can mitigate these risks by establishing robust procedures and processes such as regular compliance audits, strong onboarding practices, regular team-building events, knowledge sharing processes and opportunities for cross-departmental collaboration.
3. Ensuring Data Security
Data security is a critical concern in contingent workforce management due to the nature of the arrangement. Contingent workers often have access to sensitive company information, such as customer data, financial records, or intellectual property, to fulfill their roles effectively. Unlike permanent employees, contingent workers are temporary, making it challenging to establish the same level of trust. Without proper safeguards, there is a risk of data breaches, unauthorized access, or even inadvertent leaks. These incidents can lead to severe consequences, including financial losses, reputational damage, legal and compliance ramifications, and a breach of customer trust. Implementing secure practices for managing contingent workforce data is a must:
- Encrypt all sensitive data
- Establish permissions and access control mechanisms based on roles and responsibilities
- Regularly update and patch software and systems
- Conduct regular cybersecurity training for permanent and contingent employees
- Use multi-factor authentication for an extra layer of security
- Frequently audit and monitor data access logs
- Have a robust incident response plan in place
Mastering contingent workforce management will help you realize the potential of both your temporary and permanent employees. Effectively managing a diverse contingent workforce alongside your established teams requires not only seamless collaboration but innovative and flexible approaches to operational excellence. Get it right and you will harness a wealth of talent and expertise!
Pierpoint’s full service RPO solution can help you source, attract and retain a vibrant and efficient contingent workforce. Talk to an expert today to discuss your talent needs.