The HR Dictionary

Contingent Worker

Contingent workers are defined as freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a per-project basis. 

Pros of Hiring Contingent Workers

  • For businesses that must swiftly ramp up or decrease their staff base owing to economic conditions or seasonality of work, an external workforce can be highly beneficial. Regular employees also benefit from enhanced job security as a result of this since the elasticity of the contingent workforce shields them from unforeseen changes in business needs.
  • It is highly economical to be able to employ talent as needed. Companies gain from having specialist personnel available on demand rather than paying for this knowledge year-round, in addition to the flexibility of lowering labor expenditures when business swings occur.
  • Finding and selecting workers takes time, and there are instances when you need to find crucial talent fast. Employers can swiftly fill their openings by utilizing contingent workers.
  • The talent that firms need can be easier to locate in contingent personnel. Hiring someone with these talents takes time and may be more expensive than hiring an independent contractor. Even if a company's long-term strategy is to hire this talent internally, contingent workers can cover the gap while internal and external candidates are being sought for open jobs.

Pros of Hiring Contingent Workers

  • Contingent workers don't experience the same onboarding process as permanent employees and thus could require additional supervision when they first start. Until they are confident in their ability to perform the job, some supervisors are cautious to trust contractors and may micromanage their work. This may take time and energy away from more crucial objectives.
  • Some contingent jobs require flexibility in the places and methods of carrying out the task by their very nature. For managers who want to interact with their team members more directly, this can be challenging.
  • Contingent workers might have access to private company data that can be disclosed to third parties, depending on the specifics of their role.

An HRMS provides the ability for organizations looking to hire contingent workers to accurately manage their information with Employee Management features that can accommodate different types of employees. With HRM software, organizations can also automate the pay allocation via pay policies to the contingent workers without having to do them manually.