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Over the past decade, businesses have increasingly turned to contingent workers to combat rising labor costs, address skills gaps, and build a flexible workforce that can quickly adapt to changing conditions.The name of this flexible approach to work? Contingent employment. Yet what is a contingent worker?
You may know contingent workers by another common term, freelance workers. As the workforce continues to change, 36% of the current U.S. workforce is made up of freelancers.
“This trend is expected to grow as more companies integrate contingent workers into their workforce strategies, and more professionals embrace gig work for its flexibility and additional income opportunities,” said Ruffy Galang, CEO and Co-Founder Remote Employee.
In this blog, we’ll explore what a contingent worker is, how they differ from traditional employees, and best practices for incorporating a contingent workforce into your organization.
What is a Contingent Worker?
A contingent worker, also known as a freelancer, independent contractor, or 1099 worker, is a skilled professional hired to complete specific tasks for an organization. These experts work on a project-by-project basis, stepping in when needed without the ongoing commitment of a permanent role.
The definition of a contingent worker also includes how these team members manage their own schedules and decide where to work, whether on-site or remotely, as long as they meet agreed deadlines. These workers aren’t added to the company’s payroll and don’t receive traditional employee benefits like health insurance or retirement plans.
Examples of different types of contingent workers include:
- Independent contractors
- Freelancers
- Consultants
Temporary workers from staffing agencies are also a type of contingent worker, offering organizations flexibility and expertise without long-term obligations.
Contingent Workers Are Impacting the Way Business Works
Contingent labor is transforming the traditional ‘9-to-5’ work model, ushering in more flexible and adaptable workforce strategies. Companies are increasingly adopting agile workforce models, moving away from fixed schedules to embrace varied work patterns.
Employers are now emphasizing flexibility and adaptability in their hiring and workforce management practices. 77% of companies are more focused on workforce agility than ever before.
Additionally, many leaders whose organizations use contingent workers have seen positive results. Other key advantages include:
- Increased productivity
- Greater workforce flexibility
- Better organizational agility
What Are the Differences Between a Contingent Worker and a Traditional Employee?
The differences between contingent workers and traditional employees come down to taxation, benefits, contracts, and more.
| Aspect | Traditional Employee | Contingent Worker |
| Taxation | Employers withhold income tax and payroll taxes. | Pay self-employment tax and estimated quarterly income taxes. |
| Benefits | Eligible for employer-sponsored benefits (health insurance, retirement plans). | Not entitled to traditional benefits; may need to buy their own insurance. |
| Tools & Equipment | Employers supply necessary tools and equipment. | Invest in their own equipment; may have unreimbursed expenses. |
| Contracts & Rights | Have contracts specifying pay, working hours, holiday pay, sick pay, redundancy pay, and notice periods. | No long-term commitments; contracts are project-specific. |
| Flexibility | Less flexibility due to long-term commitments. | Offers more agility and flexibility; no long-term commitments. |
What Industries Do Contingent Workers Work In? What Roles Do They Fill?
Contingent labor can be used in any industry, and is especially favored by industries that deal with seasonal demands, like agriculture and hospitality.
Here are some examples of roles that contingent workers can fill.
Content writers: Copywriters, article writers, and review writers create relevant and engaging content for advertisements, websites, blogs, and product descriptions.
Field/expert workers: Project managers, construction workers, engineers, and architects bring their expertise to plan and execute various projects and construction tasks.
Healthcare workers: Nurses and medical staff offer healthcare services during busy periods or emergencies, such as during a pandemic.
IT specialists: Tech support, system administrators, and cybersecurity experts maintain and protect company technologies, providing support for employees and smooth operations.
Software developers: App and web developers design, build, and maintain innovative applications and websites for employees and customers.
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Interested in Building a Contingent Workforce? Here’s What to Keep in Mind
To make the most of your contingent workforce, here are some best practices you should follow.
- Work with an Agency
Partnering with an HR and staffing specialist simplifies managing contingent workers. They can help track market trends, select the best workers, and ensure a positive experience. Additionally, they can assist with legal responsibilities associated with hiring contingent labor.
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Tip: To simplify the management of your contingent workforce, collaborate with Remote Employee. Tap into an offshore talent pool across all business areas at competitive rates. |
- Be Agile and Responsive
Adapt your approach to flexible staffing based on your current needs. Strategies for acquiring skills to support business expansion differ from those for filling short-term gaps. Stay flexible and responsive to changing demands.
- Understand the Market
Research what contingent workers are looking for. Gain insights into their priorities and build a compelling employee value proposition to attract top talent. Understanding the market helps you meet their expectations and secure the best candidates.
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- Delegate Tasks
Identify tasks that can be handled by your contingent workforce. Allow your internal team to focus on core activities while external workers manage routine tasks like data entry and document preparation.
- Choose a Workflow
Select a communication and task management strategy that fits your team size. Smaller teams might use phone calls, emails, and chat apps, while larger teams may benefit from a productivity app for better task tracking.
- Select the Best Candidate
Choose candidates who fit your organization. For smaller applicant pools, conduct personal interviews. For larger pools, use initial skill evaluations, personality tests, or domain-specific challenges.
| Tip: Selecting the right contingent workers can be a challenge, but Remote Employee makes it easy. Get access to highly skilled professionals who match the roles and requirements you’re hiring for. We evaluate candidates based on their expertise, experience, and cultural fit, so you can be confident in your contingent workforce’s ability to deliver. |
- Onboard Successful Recruits
Introduce new contingent workers to your workflow. Explain company operations, task procedures, and address any questions. Once onboarded, engage them with tasks promptly.
| Tip: Effective onboarding is imperative for getting your contingent workers up to speed quickly. Remote Employee handles all aspects of onboarding, from ensuring they have the necessary information and tools to integrating them into your organizational culture. |
Transform Your Business With a Flexible, Skilled Contingent Workforce
Whether you’re looking to fill short-term gaps, bring in specialized skills, or build a more adaptable workforce, we have the expertise and resources to support you. With us, contingency workers mean success.
Why hire with Remote Employee?
- Talent pool: Access a diverse range of professionals across all business areas.
- Expert recruitment: Tap into our rigorous recruitment process, designed to match you with the best candidates based on their expertise and cultural fit.
- Seamless onboarding: We handle all aspects of onboarding, from initial introductions to integrating new hires into your workflow.
- Ongoing support: Our team is dedicated to ensuring a positive experience for both your business and your contingent workers.
Let’s start building your contingent workforce. Contact us today to get started.
