In today's dynamic labor market, the adoption of a contingent workforce program is gaining in importance across a wide range of business types.
While the use of temporary or contingent workers has long been a common approach across a wide range of industries, recent years have seen the growth of the use of sources like temp labor to manage against a challenging labor market. In 2022, a survey by Instawork showed that 72% of hospitality businesses used more temporary labor.
In this guide we’ll cover the basics of contingent workforce programs and how you should think about them as a business.
What is a contingent workforce program?
Contingent workforce program refers to a labor pool that an organization relies on, but does not directly employ. These workers, who could be freelancers, independent professionals, or temporary contract workers, provide businesses with the flexibility to scale up or down based on project requirements or market demands.
This approach to staffing not only helps businesses to manage their human resources more efficiently, but it also allows them to tap into a wider pool of talent and skills that might not be available in-house. A contingent workforce can serve as a foundational set of workers with a generalist skill set, or be used for specialized roles to supplement your core teams.
When does it make sense for a company to start a workforce program?
Recognizing the right time and set of needs to implement a contingent workforce program can be crucial for your business.
Here are a few signs that it might be time to consider this approach:
- Your business is experiencing rapid growth and needs to scale quickly: Contingent workers can help you to quickly grow your capacity, while maintaining your flexibility if needs change.
- You have fluctuating project demands that require specialized skills: If you’re in need of a specific skill set that your in-house team doesn’t possess, contingent workers can help bridge the gap to a full-time hire, or provide project-specific expertise.
- Your company is looking to reduce overhead costs associated with full-time employees: While there are obvious benefits to having full-time employees, such as in-depth knowledge of your business and operations, in many cases contingent workers can provide the same output without the additional costs associated with in-house talent such as benefits.
- You want to test new roles or projects without committing to long-term employment: If you’re not fully tied to a new strategy or approach, contingent workers can help to develop a proof of concept before committing to a full-time resource.
- Your business operates in a highly competitive market and needs to stay agile: Strategies and plans can change on a dime, and the flexibility of contingent workers allows your business to stay agile to rapid change.
How to get started building a reliable contingent workforce program
Building a contingent workforce program from scratch can seem daunting, but with a clear plan, it can be a smooth process. The first step is to identify your talent needs and determine how a contingent workforce can meet them.
- Identify Your Talent Gaps: Understand the skills, expertise, or capacity your business requires and which of them could be met by a contingent worker.
- Develop a Sourcing Approach: Create a plan that outlines how you will source, manage, and retain your contingent workforce.
- Establish Clear Policies and Processes: Develop clear policies and procedures to ensure compliance with labor laws and regulations. In addition, creating a unique onboarding process for contingent workers can help them better understand your business, expectations of them, and set them up for success.
- Measure Success: Regularly evaluate the effectiveness of your contingent workforce program and make necessary adjustments. Are you finding the right skill sets through the program? Should some roles be brought in-house? Are there other areas of the business you could expand the program to? Asking these questions on a quarterly or annual basis can help you constantly improve and evolve your program.
Contingent workforce programs can be a strategic asset for businesses looking to stay agile and adaptable to change.TheIt offer the flexibility to scale up or down based on project requirements, and can expand your access to a wider pool of talent, while potentially reducing costs.
Remember, the way you manage your contingent workforce can significantly impact your business's success. Good onboarding and management practices can turn your program into a key growth driver and tool for your business