Contingent Worker

What is a contingent worker?

A contingent worker is a term that describes a type of employee who works for an organization on a short-term, contractual, or as-needed arrangement.

Unlike traditional employees, typically employed on a full-time or long-term basis, contingent workers often get hired for specific projects or tasks and are not guaranteed ongoing employment. They may work in-house, remotely, or juggle between the two.

Contingent worker vs. contract employee

Both contract and contingent workers are temporary hires, although the terms have slightly different definitions.

A contract employee is usually hired for a specific job, given their distinct skills, with a fixed-term agreement in place. This can be anything from providing freelance services to completing a project. On the other hand, contingent workers are mainly employed on an as-needed basis, allowing them to provide more flexibility to their employers.

Here are some of the differences between a contingent employee and a contract worker:

Contingent worker examples

Not all short-term or freelance staff members are contingent workers. Here are some examples of other contingent workers and why they’re considered as such:

1. Freelance writing or graphic design

When your organization needs help with an ad campaign or article, you can hire a freelance writer or graphic designer as a contingent worker. These professionals are hired for their specific skills and only stay on the job until the task is completed.

2. Temporary administrative or clerical staff

Temporary administrative or clerical staff members may also be useful for short-term projects or to cover employee absences. For example, if your company needs help with data entry, managing employee records, or organizing its filing system, you can hire a temporary staff member as a contingent worker.

3. Seasonal retail or hospitality workers

Retail stores or the hospitality industry often hire seasonal workers to help during busy periods such as holidays or back-to-school season. These employees are usually asked to work on a specific shift or for a certain period and are not expected to stay on beyond that.

4. Project-based consulting or IT support

Project-based consultants and IT professionals often work as third-party independent service providers and thus are considered contingent workers. Whether it’s a website development project or software implementation, these professionals can provide their specialized skills for the project’s duration to help organizations achieve better results.

Benefits of employing contingent workers 

A contingent workforce can be a great asset to any organization. Here are some of the benefits that come with hiring them:

• Flexibility – As an organization, you only need a contingent workforce for specific tasks or projects as needed. This lets you easily adjust your staffing needs without committing long-term or incurring high costs.
• Cost-effectiveness – Contingent workers only stay with your organization for a limited time, so you don’t have to pay their salaries or benefits beyond the agreed period.
• Access to specialized skills – Hiring contingent workers gives you access to specific skills that may not be available in-house. This is especially beneficial when it comes to complex tasks and projects.

Disadvantages of contingent workers 

Although they’re an asset to organizations, hiring contingent workers has a few drawbacks and risks. These include:

• No guarantee of continued employment – Since contingent workers don’t have a defined contract, they can leave anytime if they find another job. That means your organization may need to find a new person for the position to keep up with the workload.
• Lack of training – As contingent workers stay with an organization for a short time, they may not receive the training that permanent employees receive to help them deliver better results. This could lead to a decrease in productivity or quality.

Contingent workforce management: Tips for HR

If it’s your first time hiring a contingent worker, you may not know how to handle or use them optimally. Thankfully, there’s no room for trials and errors, as this section provides foolproof tips to help you manage your contingent workforce:

• Clarify roles and expectations – It’s essential to set clear job expectations from the start so that both parties understand the type of work to be done and the time frame for completing it.
• Have a streamlined orientation process – Streamlining the orientation process for contingent workers can ensure they hit the ground running as quickly as possible. For instance, you should establish a checklist of tasks that need to be completed, explain any policies or procedures in detail, and keep open lines of communication.
• Provide access to necessary resources – From office supplies to software access, ensure contingent workers have all the resources and tools needed to do their job efficiently.
• Offer ongoing support – It doesn’t hurt to provide contingent workers with additional support when needed. This can be anything from answering questions or providing feedback to assigning a mentor who can help them navigate the job.
• Set clear goals and performance expectations – As a goal-focused, performance-driven organization, you must set performance expectations so that contingent workers understand their responsibilities and the results they must deliver. For instance, you should decide how often they must report their progress and what metrics will be used to measure their performance.
• Ensure legal compliance – Understanding and complying with any legal requirements surrounding contingent workers, such as tax and insurance laws, is critical. For example, you must ensure the contingent worker is paid on time, per the minimum wage requirements in your country.