Contingent staffing (also called contingent workforce) is a broad term used to describe various relationships between service providers and those services` recipients. Since it's been coined in 1984, it has been used in various contexts, but traditionally it means any form of alternative workforce arrangement.
Equal Employment Opportunity Commission provides this definition (Enforcement Guidance... 1997): “workers who are outside an employer’s `core` workforce, such as those whose jobs are structured to last only a limited period of time, are sporadic, or differ in any way from the norm of full-time, long-term employment”.
Types of contingent workforce
There are many types of agreements between employer and employees which could include contingent workforce. Note that some types below might interleave and be used interchangeably. This list could also be extended or further subdivided.
- Part-Time Employees - regular employees who work less than full-time basis, that is usually less than forty hours per week
- On-Call Employees - persons who work only on request from employer. Upon call, they may be working for some period of time (days, weeks or more) on full-time employer's workload
- Temporary Employees - this term usually means (but is not limited to) one of two roles: employer who is hired from external company to supplement firm's temporal staff or skill deficiencies or employer who is hired for relatively short time
- Contract (Outsourced) Employees - employees from external entity that provide services to a firm. Usually that includes specialized personnel
- Contract Technical Employees - generally high skilled contract staff who provides services for long-term project, including specialized know-how, like engineers or computer specialists
- Leased Employees - a company called “professional employer organization” - who manages administrative and financial work associated with employment - “leases” an employer to an entity for an agreed fee. This employer's job is supervised by company where he is leased to.
- “Master Vendor” Employees - a company called “master vendor” provides necessary temporary employees (sometimes by subcontracting) to other company. “Master vendor” handles all administrative work and billing while and might also direct employees’ work.
- Independent Contractors - self-employed worker who has an contract for finite time or until an assignment is completed. They are often very independent and usually are accounted for solely result of their job (with employer not interfering in their processes). This type of contract is popular among specialists.
From business’ point of view, contingent staffing is primarily a way to lower labor costs. Increasing financial pressure is driven by factors both internal and external nationally. Internally - more and more industries become deregulated. Externally - globalization puts even more pressure on all pricings of goods and services. Mixing full-time workers and contingent staffing allows flexibility in complying to local laws while maintaining competitiveness.
From employee's point of view contingent staffing might be beneficial. Cost control (taxes, insurance, equipment, etc.), better productivity and adapting to industries’ needs could result in much higher earnings compared to traditional workers. Less liabilities connected to strict work arrangements of full-time workers give contingent workers more freedom in planning and adjusting work schedule. It must be noted that some employee's benefits apply only to contract or self-employed individuals.
There are disadvantages to contingent staffing for both employers and employees. Companies might suffer from following drawbacks when using contingent staffing:
- reducing company- or project-specific knowledge among regular employees,
- decreasing performance due to motivation and commitment issues,
- lowered effectiveness due to high turnover.
Employers might experience following downsides:
- compromised job security,
- little to no promotional opportunities,
- lower pay,
- fewer benefits (health insurance, retirement plans).
- Enforcement Guidance: Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms 2 (1997), "The U.S. Equal Employment Opportunity Commission"
- Friedman, G. (2014), Workers without employers: shadow corporations and the rise of the gig economy, ”Review of Keynesian Economics”, Vol. 2
- Horne, M. S., Williamson, Jr., T., S., Herman, A. (2005), The Contingent Workforce: Business and Legal Strategies, "Law Journal Press", New York
- Vaiman, V., Lemmergaard., J., Azevedo, A. (2011), Contingent workers: needs, personality characteristics, and work motivation, “Team Performance Management”, vol. 17
- Wilkin, C. L. (2012), I can’t get no job satisfaction: Meta-analysis comparing permanent and contingent workers, “Journal of Organizational Behavior”
Author: Karolina Próchniak