The rise of temporary talent: How to manage your contingent workforce 

The contingent workforce consists of a growing number of individuals that are hired to execute work on a non-permanent, per-project basis.

The skills and services of this segment are engaged subject to the needs of the organisation. In lieu of the need to provide continuous, permanent employment, contingent labour can offer a cost-sensitive strategy that can flex to changes in the market.

However, the incorporation of contingent workers is not without risk. Poor visibility across this segment of the workforce can trigger concerns surrounding contracts and compliance.

But with 70% of executives planning to hire more contingent workers, leaders must integrate this growing talent network as part of their workforce strategy, or bear the greatest risk of all – being left behind.

The growth of the contingent workforce explained

Gig workers, flexible labour, non-payroll workers, independent contractors, freelancers and agency workers – while the terminology may differ, one thing prevails: contingent labour is quickly becoming a staple of the modern organisation. Reports place the number of contingent workers in the US at 51.5 million, totalling 35% of the nation’s workforce.

Although non-permanent employees have been deployed for over three decades in the oil, gas and engineering industries, a number of global megatrends have promoted the accelerated adoption of the contingent workforce model across all industries, at all levels and in all job roles.

Sourcing skills: Interest in the contingent labour market is being driven, in part, by a talent-supply mismatch. With 9 in every 10 businesses reporting skills shortages, contingent workers offer some much-needed assistance in plugging the skills gap.

And leveraging the niche skillsets of temporary talent will become crucial as we operate in an increasingly digital environment. Research indicates that nearly two-thirds of executives believe that the external workforce will help their organisation to ‘compete’, with contingent workers opening the door to the outsourcing of specialised IT and digital skills.

Responding to change: A shared desire for flexibility is also encouraging more organisations to embrace the contingent workforce model.

For employees, the coalescing forces of globalisation and technology permit individuals to move more freely between roles than ever before. Intermediary platforms connect supply with demand, enabling talent and employers to ‘seek each other out, on more equal terms, from anywhere in the world’.

Flexibility will be vital to companies tackling seasonal or market-driven fluctuations and rapidly evolving customer needs. Contingent workers allow dramatic growth to occur overnight, creating an agile workforce model that mirrors the ‘ebb and flow of demand’.

Drawing on the contingent workforce also offers a more strategic approach to change management. Contingent workers provide a critical bridge in the integration of new products and services, helping organisations to overcome resistance from ‘legacy’ or permanent staff.

A New World of Work: The onset of the Fourth Industrial Revolution is fundamentally restructuring our understanding of ‘the worker’. Research by Deloitte concluded that the ‘job’ will soon become a relic of the Industrial Era. Companies will instead need to build agile, cross-functional teams, borrowing talent for limited time periods to tackle the increasingly complex problems that organisations face.

Key strategies to success

To thrive in the new world of work will therefore require a change in mindset, adopting a total talent approach that breaks down the silos between permanent and temporary staff to deliver the right talent, at the right time, regardless of source or classification.

This is no easy feat. Indeed, market sentiment suggests that many businesses feel as though they are yet to deploy an operating model suited to the next normal. With the pressure on, we’ve outlined three key pillars of a successful contingent workforce management strategy.

Policy: Before engaging with this growing talent pool, organisation must ensure oversight of the relevant rules and regulations that dictate the contingent workforce.

Misclassification remains one of the greatest risks, with severe financial and reputational repercussions for those who fail to comply with legislation.

Organisations will also need to build rigorous processes to ensure data and intellectual property are protected as the workforce becomes more fluid. A thorough selection and vetting process, onboarding, training and off-boarding programme can protect against the loss of valuable information or security breaches.

Productivity: While ‘hard work’ may have once manifested itself in the individuals who were first to arrive at the office and the last to ‘clock out’ each day, the incorporation of contingent workers has rendered this definition of productivity entirely obsolete.

No longer bound to the office, or even a 40-hour week, contingent workers must be managed with metrics that monitor outcomes. Indeed, the nature of the contingent worker means that organisations have very little scope to dictate or control the means and manner in which work is completed.

With organisations required to place a high level of trust in their temporary workforce, a clearly defined Statement of Work can foster a sense of accountability, tying talent to defined timescales and deliverables.

People: Recent data highlights the fragmentation of teams, with 58% of gig workers feeling as though their permanent counterparts are treated better by organisations.

A strong company culture can offer a strong foundation, connecting an ecosystem of employees under a unified purpose.

But with efforts to disseminate organisational culture already the source of many corporate headaches, the rise of the contingent workforce adds an additional layer of complexity to the work of HR, Culture and Talent Acquisition specialists. When so many of the traditional levers don’t apply, how can leaders support temporary talent?

We’d advise creating a version of your culture that is intentionally shaped toward your contingent workforce and their valuable contributions. While a generous holiday allowance and extensive wellbeing programme may not hold the same gravitas, some key aspects transcend contracts.

Creating opportunities for learning and development, for example, can deepen the relationship with contingent workers. Author Dan Pink states that most freelancers are ‘starving’ for input. Carving out time to regularly revisit the targets negotiated as part of the Statement of Work will benefit both parties.

Turn up the tempo

Once these pillars are in place, you can turn to technology to realise the true potential of your external workforce.

Streamline your strategy

A Vendor Management System (VMS) allows you to plan, engage, deploy and measure with purpose.

During requisition, time-consuming tasks such as background checks can be automated, enabling a quicker time to deployment. Once integrated into the workforce, a tailored VMS can increase visibility, providing vital insights into skillsets, length of service and project progression, allowing you to build talent pools that can be deployed and redeployed to serve the needs of the organisation.

And with an estimated 1 in 4 projects undertaken by service providers not completed on time or on budget, a VMS can drive strategic cost-efficiency gains.

Leveraging a range of real-time data analytics linked to specific project goals offers oversight of those who are performing well (and at what cost), but also the milestones that have been missed. Instant identification enables you to work with teams to identify barriers and put the project back on course, avoiding substantial rework or delays.

The implementation of a sophisticated VMS can elevate the integration of temporary talent from ‘just-in-time’ workers to key assets of your workforce management strategy, sourcing and placing the right talent where it’s needed most.

A brave new world (of work)

The new world of work is undeniably more complex. Skills shortages, rapid market fluctuations and an emerging ‘revolution’ will force organisations to adapt at warp speed, if they aren’t already doing so.

The good news is that these challenges have ‘spurred’ many VMS vendors to innovate, developing end-to-end management capabilities that incorporate compliance and shift management, leverage next-generation artificial intelligence and provide holistic insights by combining multiple data sources.

To survive, companies will need to embrace the contingent labour market. But in order to thrive, organisations must grapple with compliance, track performance and manage a resourcing process that consists of thousands of interactions between a variety of stakeholders and often disconnected technologies.

Talk to the team at Hays to find out more about how technology can enable you to take control of your flexible workforce.