The Contingent Workforce: What Is It, Why Is It Growing and What Are Its Benefits?
Technology is changing our society at a breakneck pace, and the world of work is also shifting as a consequence. Our opinions, beliefs and even feelings towards work are changing quickly, and this is affecting the very nature of labour.
These changes have given rise to the contingent workforce – a growing group of talented professionals who work with several companies on an on-demand basis.
In this post, we’ll take a closer look at the contingent workforce and explore the key reasons it is multiplying.
What Is the Contingent Workforce?
The contingent workforce refers to professionals who work with organisations on an on-demand basis. Those professionals are most often freelancers, independent contractors, agency workers and consultants.
Why Is the Contingent Workforce Growing?
A combination of diverse factors is behind the growth of this contingent workforce. If you can understand the motivations behind the different members of the contingent workforce, you’ll be better able to connect with them.
Here are just some of the main contributing factors according to some experts:
- Tabitha Naylor believes that the proliferation of freelance platforms help freelancers to grow their businesses. She also states that new technologies are simplifying the way freelancers collaborate with their clients.
- Forbes contributor Alan Kohll believes that attitudes toward work-life balance are evolving along generational lines.
- John Rampton from The Next Web draws attention to the fact that freelancers can often earn more than full-time employees.
- Forbes contributor Abdullahi Muhammed suggests that the erosion of job security is inspiring more individuals to pursue a freelance career.
Key Contingent Workforce Statistics
Here are some key statistics about the contingent workforce to paint a clearer picture of its impressive growth:
- The latest statistics from the Office for National Statistics show that almost five million workers in the UK identify as self-employed.
- Data from Simply Business found that the UK experienced a 31% annual rise in people looking to go freelance in 2018.
- According to the Bureau of Labor Statistics, contingent workers in the US are twice as likely as non-contingent workers to be 25 or less.
The Power of the Contingent Workforce for Employers
Now that we have a clearer understanding of the contingent workforce and its growth, let’s dive into the key benefits for employers:
1. Cheaper than full-time employees
Every business owner knows just how expensive it can be to hire and retain a full-time employee. There are several significant costs associated with doing so, such as salaries, national insurance contributions, recruitments expenses and much more.
Once a business has made a full-time hire, it has to make a significant commitment to that employee. Replacing an employee is very expensive, which is why it’s so critical businesses make the right decision.
These dynamics mean that it’s often much cheaper for businesses to hire from the contingent workforce. Doing so allows companies to circumvent many of the costs that are traditionally associated with full-time employees.
Members of the contingent workforce will often charge a higher hourly rate, but businesses still make significant savings by working with those professionals.
2. Faster to find and hire
There are a lot of common challenges for companies looking to hire new talent. To begin, they’ll often struggle to attract and engage with the appropriate candidates. They’ll also have to invest a lot of time and attention into cultivating a strong employer brand.
The candidate experience has to be flawless, too, if businesses are going to secure the brightest and most in-demand talent.
These factors mean that it now takes an average of 38 days to fill an open position. That’s not counting all of the time that is required to onboard and train a candidate once they have been hired.
The contingent workforce offers an exciting opportunity for businesses in this respect. Companies can leverage data-driven recruitment tools and platforms to find the talent that they need in a matter of days instead of weeks.
This speed means that businesses can now identify a distinct need and then fulfil it in the same week. This gives those businesses a significant competitive advantage, and if they call upon the contingent workforce accurately, they’ll be able to move their businesses in the right direction.
3. Talented and diverse
Several studies have demonstrated that diverse workplaces enjoy a range of critical advantages. Those workplaces are often more creative, productive and performant, for instance.
Businesses that call upon the contingent workforce for short-term projects get to benefit from a more diverse workforce. Those on-demand professionals will naturally bring a whole new set of attitudes and approaches that can deliver lots of value for businesses.
This regular injection of new talent helps businesses to keep abreast of new developments and even get a glimpse into best practices picked up in other companies. It’s a significant advantage offered by the contingent workforce.
Experience the Power of the Contingent Workforce with Elevate
The contingent workforce is here to stay – are you prepared? Join a number of the world’s leading brands and access Elevate’s leading Talent Intelligence platform today.