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January 8, 2021 | Uncategorized | Posted by Ascentis Thought Leadership

HR Strategies for Managing the Contingent Workforce

The shape of the modern American workforce would be unrecognizable to a human resources manager from just a few decades ago. Advancing technologies, evolving philosophies, and unavoidable emergencies have convened to create a hybridized workforce that is a long way removed from the classic nine-to-five, full-time employee model. The increased importance of contingent workers across nearly all industries is one of the best illustrations of the ways our workplaces have changed — and continue to change — over the past decade or so.  

What is Contingent Labor? 

The term “contingent worker” can encompass a number of types of employee, including independent contractors, freelancers, paid consultants, and any worker hired through a third-party contracting firm. They may be hired for project-based work, short-term contracts, or long-term positions. Generally speaking, contingent employees are skilled professionals in a specific area rather than less-skilled “temp workers” of previous eras.  

The recent push toward more contingent employees is driven by a desire for greater flexibility on the part of both employer and employee. Contingent hiring allows many workers to set non-traditional schedules with greater autonomy over their roles, including part-time hours and remote work settings. For employers, the ability to employ shorter-term workers who usually do not receive a standard benefits package allows for more flexible and specialized hiring practices. While this is not an ideal solution for every position or every employer, the overall trend toward more flexible scheduling makes it appealing for a wide range of organizations. The sudden shifts in workforce management strategies brought about by the COVID-19 pandemic have only increased the demand for a more flexible, quickly adaptable workforce. 

How to Hire Contingent Labor 

The move to a more contingent-based workforce has made many businesses rethink their overall approach to hiring. Because freelancers and contract workers have different requirements and responsibilities than more traditional full-time employees, the hiring process needs to be adjusted accordingly. In the recent past, this was often handled on a case-by-case basis, but the increasing volume of contingent labor requires a standardized, automated approach.  

Depending on the diversity of an organization’s workforce needs, an employer may be drawing contingent workers from a variety of different third-party contract companies: one for IT professionals, another for warehouse laborers, and another for creative services, for example. Since each of those businesses is likely to have its own particular set of processes and paperwork, having a standardized system with an easy-to-use dashboard in place is essential for maintaining order and keeping track of all of the vital data that will inform future hiring practices.  

Automating Your Contingent Labor Management 

A customizable workforce management software that allows your HR team to easily differentiate between and manage full-time employees and contingent hires is essential to everything from payroll processing to benefits administration to schedule building. Balancing a multifaceted workforce including FTEs, contractors, freelancers, and other classifications of employee is simply too big a job for HR and payroll managers to handle without some technological assistance.  

Trying to navigate between the scheduling, payroll, and compliance requirements for each group of workers not only adds undue stress for managers, it also creates a huge potential for human error. The time saved by automating as many of those functions as possible will have an impact on your HR team’s productivity and, ultimately, your bottom line. A software-based workforce management solution can also help your organization avoid the hefty fines that can be levied against a business for misclassifying contingent and full-time employees. 

Analyzing Contingent Labor Data 

As noted earlier, the move toward a more contingent labor-reliant workforce is a reflection of an ongoing evolution in the way American employers approach human capital management. Another key argument in favor of automating your contingent labor management functions is the sheer amount of data those workers generate, and the ways that data can be applied to your future plans. An automated time and attendance system is an invaluable tool for tracking variations in scheduling, productivity, and labor costing. Analyzing that data can in turn help management make informed, cost-effective decisions about future best practices in areas like hiring, recruitment, and employee engagement efforts.  

While the traditional model of full-time employment isn’t going away anytime soon, it has been evident for quite some time that contingent labor will figure heavily in the future of the American workforce. Current trends in flexible scheduling, remote employment, and work-life balance make that trend all the more clear. For employers looking to make the most out of freelancers, contractors, and other less traditional workers, putting in place a well-considered contingent workforce management plan including an automated software solution is essential for keeping pace with the ongoing evolution of the way we work. 

Learn more about the many ways Ascentis HR software, time and attendance, and payroll software solutions can help manage your multifaceted workforce. 

With more than 35 years of experience in providing Software as a Service (SaaS) solutions, Ascentis thought leaders have become a respected source for insights, tips, and innovations in the Human Capital Management (HCM) space.