Measuring the Impact of a Contingent Workforce

Today, more and more organizations are relying on contingent workers. By definition, a contingent worker is anyone who works for an organization on a non-permanent basis, but this only tells part of the story. Indeed, understanding the impact of contingent workers can be a challenge, since there are many different types of contingent workers and in different sectors, contingent workers play very different roles.

Types of Contingent Workers

1. Contract Workers

Contract workers are typically brought on board to work on a specific project. A contract may last anywhere from a few weeks to over a year and may or may not be renewable. Contract workers may work remotely but many contract workers work on site. This means they are not expected to provide their own tools (e.g., computers) and in many cases, they have taxes deducted from their paychecks at source.

2. Freelancer

A freelancer is a contract worker but as implied by the job title, most freelancers are more or less free to work when and where they want. While there are exceptions, freelancer is most often used to describe people who work on a contract basis for one or more employers and work remotely. This means that unlike many contract workers, freelancers are part of the 1099 sector—in the US, these are workers who must file an independent contractor or self-employed form with the IRS.

3. On-call Workers

Unlike contract workers, on-call workers (e.g., substitute teachers or people who fill in for sick actors and musicians on Broadway) may work for the same employer for decades and may or may not have taxes deducted at source. While they may enjoy some form of job security, what they don’t enjoy is full-time work nor its benefits.

4. Temporary Staff

Temporary staff or “temps” are typically hired through staffing agencies to fill sick leaves, parental leaves, fill a staffing gap between permanent hires and respond to temporary staffing increases. While they may have taxes deducted at source, they typically do not enjoy the benefits of full-time employees.

5. Taskers

Today, work is being broken down into ever-smaller fragments. For example, consider a platform like Spare5. While not a work recruitment platform per se, Spare5 is nevertheless transforming the contemporary landscape of work. Let’s say your organization sometimes needs images tagged. As opposed to hiring someone to fill this occasional job, Spare5 enables you to pay people a small amount of money to tag just a few images and more money to tag hundreds of images. In this economic model, large jobs are broken down into bite-sized tasks. People who once wasted time on the bus playing video games or checking their Facebook page can now turn their wasted time into money-generating moments. Taskers typically work on such a small scale that tax deductions and benefits are simply not an issue.

It goes without saying that given the vast range of contingent workers, the impact of contingent workers is also a complex problem for contemporary organizations. An organization that continuously brings talent on board for three months to a year and then lets the talent go may suffer from morale problems. An organization that outsources tagging tasks will not suffer from low morale because chances are most of its workers will never even know that the organization is employing “taskers” for a few minutes to a few hours per week. Similarly, while freelancers may have a positive impact on one organization (e.g., by enabling them to grow at a fast pace without making a permanent commitment to an expanded workforce), freelancers may have a negative impact on another organization by creating new challenges for the payroll department who are now processing five times the number of pay checks they were when the organization was entirely staffed by full-time permanent employees. In other words, different groups and combinations of contingent workers require different management and change management expertise.