Growth of the Contingent Workforce Continues

Cindy Lynes
May 01, 2015

Business Growth

Staffing Industry Analysts’ April update of the U.S. Staffing Industry Forecast, presented a bright future for the contingent workforce. In their report, this global advisor on contingent work predicted that this industry segment will grow 6% in 2015 and 5% in 2016 to reach a record industry size of $121 billion. This projected growth is no surprise to anyone who has been paying attention to the contingent or “on demand” workforce over time. A handful of other stats tell the same story:
  • In 2015, the U.S. Department of Labor found that 65 percent of employers anticipate an increase in the use of flexible staffing arrangements to meet their future talent needs.
  • In Deloitte Consulting’s Global Human Capital Trends 2015 whitepaper, more than half (51 percent) of respondents said their need for contingent workers will keep growing over the next three to five years.
  • A recent survey conducted by research firm Ardent Partners found that about 30 percent of company workforces are now made up of non-full-time employees, growing to 50% by 2020.

This non-employee workforce offers companies the ability to tap into extensive networks of individuals with hard-to-find skills. The benefits are many but the challenge of finding and managing this diverse and decentralized workforce cannot to be underestimated. 

Here are 4 key questions organizations must consider when developing their contingent workforce strategy:

  1. How can we PLAN most effectively for a total workforce? When it comes to a contingent workforce strategy, the planning phase is extremely important. Unfortunately, in many organizations, contingent workers are added in an ad-hoc fashion so that it’s hard, or in many cases totally impossible, to get the total contingent workforce picture. Organizations should start by evaluating the critical skills needed to achieve company goals, determining where the talent gaps are, and then developing a strategy to fill the gaps with both full-time and contingent labor. Those spearheading this planning phase should be prepared to educate others within the company about the high value contingent workers bring to the workplace. Providing research about the use of contingent workers in your industry and the growth of the contingent workforce nationally and internationally is a good place to start.
  2. How will we MANAGE our contingent workforce? Most organizations have established processes when sourcing, hiring, on-boarding, compensating, training and reviewing full-time employees. For some reason, when it comes to the contingent workforce, many of these standards seem to go right out the window. This should not be the case. Organizations should think broadly about the range of talent practices used for full-time employees, and consider how they may be applied to the contingent workforce. Companies should also look to standardize the management of contingent workers when possible, making it similar or identical to that of full-time employees. The contingent workforce landscape should not be the Wild West. There should be rules and processes in place to ensure that you are finding the best candidates, hiring them in a timely fashion and at the right price, on-boarding them to meet all compliance requirements, training them so they continue to develop their knowledge of your organization and their own expertise, and providing performance feedback on an ongoing basis. These policies were put in place for full time employees because they enhance performance. They’ll have a similar impact on contingent workers.
  3. How will we ENGAGE contingent workers and integrate them into our culture? As a full-time employee at an organization, you are privy to a lot of information about the company and the culture: emails from the CEO about the financial performance of the company, interactions with co-workers that give you the flavor of how people treat each other, events and town hall meetings where important information is shared. For many contingent workers, this is not the case. If you have contingent workers who work remotely or don’t have network access, don’t forget to try to share these aspects of your organization with them. Just being part of an active corporate culture energizes your full-time employees, and it will motivate your contingent workers as well. Look for opportunities to share exciting company news to give them a strong sense of the organization they are working for. Be sure to coach your hiring managers on effective strategies to keep this workforce engaged- they are a critical part of the team’s success – make sure to treat them as such. You can also look for opportunities to connect your contingent workers to each other providing an additional layer of support. These efforts will ensure that they know your organization and will represent you well when they are out in the world.
  4. What Technology will we use to help us manage our contingent workforce? Many HR technology solutions are designed exclusively for full-time talent. Within organizations where contingent talent is a significant part of the workforce, this just won’t work. These organizations need to leverage a technology solution that provides total visibility into this specialized workforce. A Vendor Management System (VMS) manages contingent labor as well as the wide variety of service categories such as Statement of Work (SOW) projects and indirect services. A VMS can help to make the contingent workforce a strategic component of an organization’s overall human capital management strategy by improving operational efficiencies, cost controls, compliance, and invoice controls for staff augmentation and professional services spend.

As the contingent workforce continues to grow, managing this unique population requires innovative thinking and solutions. Organizations must think critically about how they will plan for, manage, engage and integrate this complex workforce into their comprehensive talent strategy and bolster this plan with the required technology support. Organizations who fail to do this will lose a competitive advantage over those who do.

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