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Are contingent workers part of your current or future plans?

October 8, 2012

Article courtesy of SBAM Approved Partner ASE

By George Brown  

The term “contingent work” was coined in 1985 by Audrey Freedman to describe “conditional and transitory employment arrangements as initiated by a need for labor—usually because a company has an increased demand for a particular service or a product or technology, at a particular place, at a particular time.”

Barker and Christensen in 1998, note that the term contingent employment is “generally thought to include those jobs that are done on temporary, self-employed contract, or involuntary part-time bases.”

Since the Great Recession, companies worldwide have struggled to focus on plans for renewed growth. Recognizing that fact, Deloitte prepared a report in 2011 that identified 12 “revolutionary and evolutionary” trends for the years ahead. Under the evolution category:

Contingent workforce: Employers can benefit from improved operational performance, lower labor costs, smarter staffing decisions and stronger HR alignment with business objectives by leveraging the contingent workforce—provided they know how to do it well.

CanopyHR Solutions listed the following as one of the top five HR trends coming down the pike in 2012:

Contingent workers: The search for an adaptable workforce and labor cost containment has sent utilization of contingent workers skyrocketing. The sector comprises consultants, temps, freelancers and contractors — those who can get the job done but aren’t on the official payroll. Companies are finding that these flexible non-employees can bridge the gaps in skills and talent left by retiring Baby Boomers and a pared-down workforce. Of course, they also provide significant savings in payroll expenses.

The downside of the contingent workforce is the challenges that inadequate technology skills and resources, poor data management, and problems communicating company policy can bring.

Even the U.S. Department of Labor has some general observations on the topic, which it views as both a healthy trend and a cause for concern.

How do companies and employees view contingent workers today?  Randstad, which bills itself as the second-largest staffing organization in the world and is therefore highly invested in the contingent workforce as a business model, released Randstad Workforce 360 last month. That report argues that many U.S. companies are more committed to a mix of permanent and contingent workers as a long-term business strategy in the post-recession economy. The report even concludes that many workers are choosing to work in a contingent capacity and finding higher job satisfaction from doing so.

Two-thirds of the companies in the Workforce 360 report say they use contingent workers in some capacity, and contingent workers are a “steady or increasing” percentage of their populations. Seventy-one percent of these companies say they are able to remain nimble during economic swings because of their continent workforce. More than three out of four (76 percent) of them say they are committed to finding the formula for the right mix of contingent and full-time workers to maximize the value of their workforce.

“ . . . We live in a world now that rewards financial flexibility rather than fixed-cost business models, and agility, cost containment reign supreme,” said Jim Link, managing director of Human Resources for Randstad U.S. “We believe this integrated staffing model will be fundamental to operational and fiscal success for the foreseeable future.”

The study argues that many workers are choosing to work as temps or contractors, and more than three out of four (78 percent) agreed their experience as contingents has been positive. Specifically, the study finds:

  • Sixty-three percent of temporary and 73 percent of contract workers rate their growth potential with their current employer as good or excellent.
  • Eighty-six percent of temporary/contractors agree their current level of job satisfaction is very good/excellent compared to 73 percent percent of permanent workers.
  • Fifty-four percent of contingent workers strongly agree with the statement “I am paid what I’m worth,” compared to only 42 percent of permanent workers

Workers choose temporary or contract employment for a number of reasons beyond the hope that it will lead to permanent employment. Three of the top reasons include:

  • Flexibility of schedule (31 percent)
  • Money is better (28 percent)
  • To be in charge of my own career (21 percent)

Finally, the study found that 40% of employers report that many of their top talent got their starts as temporary workers in their organization.

ASE’s experience in the world of contingent workers is consistent with the findings of Workforce 360. Brady Binkley, ASE’s manager of professional placement services, notes that demand for ASE’s part-time HR workers among both member and non-member firms is at an all-time high.

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