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Contingent Workforce Management

The contingent workforce management definition is the practice of managing a team of workers who are not employed at your organization full or part-time. In the era of the so-called gig economy, many businesses find themselves hiring for positions they would never have considered not long ago. Social media managers, diversity consultants, new technology trainers, and other newer positions require skills that may not exist within a company’s current workforce. Add to that the increasing importance of part-time and nontraditional schedules, and independent contractors, freelancers, and other contingent workers are playing a larger and larger role in the workplace.

Managing a workforce that includes both contingent labor and full-time employees can be a tricky balancing act without effective project management. Contingent employment touches multiple areas of your hiring and payroll operations, including finance, risk management, general HR, and procurement.  A well-considered approach to contingent workforce management is essential to meet your workers’ needs and protect your bottom line.

Government regulations in the United States make a clear distinction between full-time and contingent employees, with heavy fines and probations for businesses that misclassify workers. Adding even more complexity, global contingent workforce management is also growing in importance as businesses broaden their talent pools by employing more remote workers from all over the world. Having some form of dedicated contingent workforce management program in place, whether in the form of managed services or manufacturing workforce management software with options for talent management and real-time reports, is crucial for any company employing external talent like contract or freelance workers.

What Is an Example of a Contingent Worker?

Contingent workers often have specialized skills, which is why they’re hired, but might not need to be full-time employees. Hiring contingent workers can help reduce costs while still getting a project done, but may present tricky payroll challenges for managers. A few examples of contingent workers include:
  • Freelancers, including everything from web developers to back-end programmers to content writers
  • Consultants brought in to help optimize other aspects of your organization
  • Delivery drivers who you may need only in certain situations
  • Contracted specialists, like electricians, construction specialists, carpenters, and other builders
  • Legal services and counsel
  • Food prep and delivery workers
As you can see, contingent workers span a broad spectrum of different areas. That makes it important to have a resilient and versatile workforce management system for contract services that you can use to accurately track hours, pay for services rendered, and remain in compliance with federal, state, and local regulations. 

How to Manage a Contingent Workforce

If you’ve hired contingent workers, it’s a good idea to ensure you’re managing them in accordance with best practices. These are some of the most important key points to keep in mind:
  • Know how to recruit properly. Your first step in managing a contingent workforce is recruiting the workers you’ll need to get the job done. Ascentis recruiting software makes it easy to connect with the workers you need when you need them. It’s also a good idea to make job postings stating the purpose of the job, the rate, and the length of the contract. 
  • Remain compliant. Contingent workers are not full-time employees, which means different laws might affect them and how you work together. Additionally, different states may have different laws regarding contract workers. Be sure that you study the appropriate regulations before bringing on a contingent workforce, or use automated workforce management software like Ascentis. Our human resources software solutions can keep you compliant no matter where you are or what job you’re hiring for. 
  • Use technology. These days, it’s impossible to get by without the right business tech solutions in hand. That includes managing a contingent workforce. As you consider the labor you’ll need to bring on, be sure that you invest in a tech solution like Ascentis’ HRIS software that can keep track of different jobs, positions, and people accurately. 

When to Hire Contingent Workers

Contingent workers can be an important part of your workflow during different phases of your work cycle. In industries like manufacturing, high-output seasons may require you to bring on seasonal workers. You might also get an influx of work, which could mean that you hire contingent workers to help out until you’re sure whether or not you’ll need to hire more full-time staff. 

Contingent workers can also be useful for a number of other areas as well, like hiring extra staff for a catered event, hiring drivers or delivery drivers, bringing on temporary cleanup crews, hiring freelance writers, and more. The best way to determine whether you need contingent workers is to ask yourself whether you need a job done that you won’t need specialists for once the job is finished. 

It can also be helpful to hire contingent workers in situations like:
  • Extended leave: If one of your full-time workers is out for parental or medical leave, it can often make sense to hire someone temporarily to take their place. 
  • Seasonal work: As mentioned, in some industries, the workflow can vary significantly by season. If your workplace experiences seasonal fluctuations in work, it’s a good idea to hire contingent workers for the high-volume season. 
  • New expansion: If your company has recently grown, you may find it helpful to hire contingent workers until you’re sure you can afford to bring on more full-time employees. 
  • Low cash flow: In some cases, you might want to hire full-time employees, but it just makes sense on your budget to start with contingent ones. This is often the case for startups, and contingent workers can be a great solution in that space. 
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