In every economic downturn, contingent labor has saved the day. During the financial crisis of 2008, and again in the early years of COVID-19, the manufacturing industry turned to temporary and contingent labor. And while the impetus to hire temporary staff may have been economic, organizations have discovered other advantages to a contingent or blended workforce.
Today’s forward-looking organizations have realized that contingent (or contract) workers are more than “hired hands” with a set job to do; they are skilled workers that deserve a regular place on the payroll.
Advantages to a contingent workforce
Flexibility.
In manufacturing, this is key. Whether you want to meet seasonal variations in demand or remain flexible in a changing economy, a contingent workforce provides agility and scalability. And if you want to initiate a special project, you can hire specialized talent that may not be needed on a day-to-day basis going forward.
Time savings.
Contingent workers can generally be hired more quickly and may not require onboarding. And because these workers are often chosen primarily for specific skills, they may require less training than a full-time employee.
Cost savings.
Although contingent workers’ rates may sometimes seem high, they’re mostly ineligible for benefit programs, amounting to substantial overall savings. And, because they’re usually hired for specific skills, they don’t require the same level of training and overhead associated with permanent employment.
Large talent pool.
The contingent or temp workforce has grown steadily since before the pandemic. The number of workers identifying as “occasionally independent” more than doubled from 15.8 million in 2020 to 36.6 million in 2023. Similarly, the number who called themselves “full-time independent” rose from 13.6 to 26 million. What does this mean for you? People are no longer just “accepting” a temp job while they look for full-time work; an increasing number are choosing the contingent lifestyle.
Planning your program
If you tend to wait until your headcount falls and the rest of your workforce is overwhelmed before looking to augment your staff, you’re already behind.
Set objectives.
Make a business case for a contingent workforce. Define your goals. How will this align with your overall people strategy? With company goals and objectives? Be specific and use data where possible. Next, get buy-in from all levels of management. Without this, the program won’t last long.
Create policies.
If you have contract workers now, you no doubt have some ground rules in place, but consider strengthening them to minimize potential risks like data security breaches or intellectual property theft.
Your policies must also comply with legalities such as worker classification, workers’ rights, tax laws, and other applicable regulations.
Don’t forget to craft policies around onboarding and offboarding, and outline workers’ roles and responsibilities to eliminate ambiguity.
What candidates want
Gone are the days when contingent workers were laid off from their “real jobs” and happy to take what work they could get. Today’s candidate has wants and needs and is likely weighing other opportunities. Organizations that prioritize the candidate experience ultimately attract a higher quality workforce.
Flexibility.
Just as you want flexibility from them, contract workers want the same from you. In fact, it’s often the reason they do what they do. Offer as much latitude as possible, with nonstandard hours, remote options and variable schedules where possible.
Inclusion.
In addition to flexibility, the key to attracting top-quality contingent talent is inclusion. The day-to-day differences between contract workers and full-time staff should be as subtle as possible. Design a fair and equitable onboarding process that demonstrates their value to the organization.
Alignment with their values.
Part of inclusivity is fostering alignment between candidates and company goals. The younger generation, in particular, thinks it’s important to work for an organization that shares their values— this often factors into their decision about whether or not to accept a position.
Career resources.
If your contingent staff can benefit from upskilling and training, don’t stand in their way! Providing free (or low cost) training is a win/win. Career pathing can also boost engagement by showing contract workers possible routes for them to move upward and onward.
Performance feedback.
Hand-in-hand with providing career resources is the opportunity for the worker to receive feedback—either through regular performance reviews or recognition programs (or both). This can be valuable for performance improvement, professional development and may potentially lead to other opportunities within the organization or extension of their contract.
Contract to hire?
Presenting this option may expand your reach to candidates who are seeking—or at least open to—full-time work. It’s also a good way to “try out” future employees without making a full commitment. Consider whether this option would align with your overall goals and objectives.
Managing your program
Just as important as drawing up a plan, you need the mechanism to make it all work. Depending on the size of your workforce, this can be a complex issue.
Leverage technology.
Workforce management software allows businesses to manage everything from payroll, benefits and human resources (HR) to recruiting, onboarding, performance and learning from one location. There are many versions of these products available. Factors to consider include scalability, integration capabilities, ease of use and cost.
Consider a workforce management partner.
The easiest way to ensure compliance, engagement and smooth sailing with your contingent workforce is by partnering with a professional. Consolidating your workforce management to one vendor not only minimizes risk, it also gives you full visibility into your workforce and simplifies performance measurement.
Finally…
If your company is more reactive than proactive about contingent staffing, it’s time to make some changes.
Start with well-defined policies and business rules that govern engagement, risk, compliance, cost and overall program success. Craft your program around the contingent worker’s wants and needs, and prioritize a sense of belonging. And ensure ongoing success with software or a workforce management partner.
Mastering these basics will enable your organization to engage a flexible, on-demand workforce while minimizing potential challenges.
Want to discuss further? Contact us today.
