As the novel coronavirus pandemic continues, many businesses are scrambling to stay nimble and react to market changes. Some industries have seen demand spikes, such as ecommerce (because let’s be honest, we are all ordering more things online), outdoor equipment, and delivery services, while others may be continuing to see stagnation or even decreases in demand, such as salons, gyms, and movie theaters. Not to mention, many leaders are wondering about seasonality, determining if the pandemic will impact their busiest time of year. No matter your industry, utilizing contingent workers can offer myriad advantages. A reliable and diverse pool of contingent workers can give your business the flexibility you need to weather the current economic downturn and to recover efficiently.
Contingent workers defined
Contingent workers are all types of non-salaried workers, such as independent contractors, temps, advisors, consultants, and the like. These workers hold temporary positions with companies, often doing part-time or project-based work, and they can provide greater workforce management flexibility.
Contingent worker numbers in the U.S.
It can be hard to know exactly how many people are contingent workers, but the number is growing. In fact, it is projected that by 2023, more than half (52%) of the US workforce will either be gig economy workers or have worked independently at some point in their careers (MBO Partners).
Why the shift? First, technology has made it easier for companies to access and connect with available local talent on demand. Secondly, the uncertainty during the pandemic has caused organizations to evaluate their workforce models, resulting in many choosing contingent workers as a complement to their full-time employees.
Advantages of using contingent workers
1. Your business can be more flexible.
As customer demand continues to yo-yo, and COVID-19 clouds organizations’ abilities to accurately anticipate supply needs, a scalable, flexible worker pool is a critical component of financial success. Enter contingent workers. Temporary workers often have immediate availability, meaning you can flex quickly, and by their very nature are only going to be with your company for a set period of time or project. These defined fixed costs can offer budgetary precision, allowing you to know exactly how much these workers are going to impact your bottom line.
2. You may be able to cut costs.
Due to their worker classification, there are costs associated with full-time employees that aren’t associated with temporary workers, such as payroll taxes. Engaging with contingent workers could reduce operating labor spend, which could potentially lead to crucial cost savings for businesses recovering from financial losses due to the pandemic. As always, please consult with appropriate tax and legal professionals to ensure you are classifying all workers correctly.
3. You can prepare for the future.
We’ve all heard the statistic, the cost of a bad hire can reach up to 30% of the employee’s first-year earnings (U.S. Department of Labor), which under normal circumstances can be financially taxing for an organization. However, in the current economic environment, that type of financial uncertainty is a cost many organizations simply can’t afford. The possibility to hire successful temporary workers for full-time employment makes searching for the right person much less onerous, and much more cost-effective, when you have the perfect candidate already as a contingent worker.
What’s more, temporary workers provide the opportunity to see who is most engaged and excited about a particular project or job. For example, ten workers may come in for a project and one stands out for going above and beyond, you could offer that individual a path to employment at your company.
Now is the time to engage your contingent workers
If you’re ready to increase your flexibility, take advantage of potential cost savings, and prepare for the future, then now is the time to build out a pool of contingent workers. You can use services like Wonolo to connect you with available and qualified workers so you are ready for when your company needs them.
Want to learn how you can work with contingent workers like a pro? Check out our blog post for tips to implement and pitfalls to avoid.
Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. If you need legal advice, contact an attorney.