Contingent Workforce Growth Exceeds Expectations! | DCR Workforce Blog

Contingent Workforce Growth Exceeds Expectations!

According to the latest statistics released by the Bureau of Labor Statistics, the number of contingent workers in the USA today stands at 2,679,800 – nudging the all-time high record of 2,767,300 set in October 2006. While the economy as a whole has shown a 1.56% increase in the number of jobs available; contingent work has grown at the rate of 7.5%. What is more, a recent survey has 40% of employers stating that they have plans to hire contingent workers this year.

Some factors which influence this growth are not temporary in nature. They have changed the way the world looks at employment and expanded the very definition of work and workers into categories like project-based, crowdsourced, contract-based, short-term, online, on-call, temporary etc.

  • Uncertainties in economic growth will continue to throw a spanner into the expansion plans of the most ambitious and competitive of businesses –keeping permanent hiring plans on hold for some time longer.
  • Younger generations are choosing to embrace more adventurous lifestyles and seeking work which does not tie them down to a specific location or organization. The emphasis is on work-life balance, flexibility and freedom.
  • Federal budget cuts in the name of sequestration have not just created uncertainty in the minds of people in general about the economy. They have impelled employers to hire temporary workers rather than plan for permanent hires.
  • Talent shortages have encouraged skilled workers to become independent contractors, commanding a much higher income by taking up work for multiple employers– all of whom are in desperate need of such skilled and experienced workers with hard-to-find skills.  The use of highly skilled temp workers is particularly attractive to employers who need a specialized skill for a specific project, but are reluctant to commit to a highly paid employee on an ongoing basis.
  • The effect of the impending (now, modified) implementation of the Affordable Care Act, which based most of its mandates on the magical threshold of 50 permanent employees – thereby incentivizing employers in that bracket into pushing it to seek temporary workers instead of permanent ones.
  • Last but not the least, given the uncertain market conditions and tremendous competition from various quarters, companies must stay ahead of their competitors. For a long time now, the use of contingent workers has proved to be an important strategy in a company’s arsenal. Not adopting the use of an extended workforce as a policy will detract from the company’s competitive advantage in the longer term.

Even as engaging a contingent workforce is being hailed as a highly advantageous move for any business, not all types of temporary workers are the same.  Anyone who fails to understand these differences may risk consequences like overpaying for services rendered; or exposure to legal risks associated with employment regulations as they apply to each category.

When choosing between agency-supplied contractors, freelancers, SOW-based project team, which do you think offer the lowest cost of ownership?  Which do you prefer?  We’re anxious to hear your thoughts.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.