Business is Fluid: The Case for Courting the Contingent Workforce

By Jessica Miller-Merrell

Having worked in the retail industry for much of my human resources career, facility payroll and headcount requirements ebb and flow depending on holidays and time of year. If you work in retail organization that relies heavily on holiday and Christmas sales to finish out your sales cycle, you are likely planning and evaluating your temporary and contingent workforce strategies to fill the gaps of your permanent employees.

Contingent workers whether project based independent contracts or seasonable employees are more important than ever before. These free agency workers fill in short gaps whether and are growing in popularity among workers who are demanding flexibility and the opportunity to choose their projects and work-related activities like I, myself do.

Aberdeen recently released a report earlier this month titled, “Contingent Labor Management: Strategies and Solutions for a Flexible Workforce” and given my experience working in seasonal industries and those that are project and creative focused, I tend to agree.

• Quick Onboarding. 5 days is the average time it takes for contingent labor to get up to speed.
• Cost Savings. These temporary and contingent workers result in a 16% cost savings for the company.
• Business & Talent is Fluid. While your business likely follows a sales cycle of somewhat predictable ebbs and flows, having a little wiggle room is good business. Sixty-three percent of Best in Class organizations agree relying heavily on contingent labor.

While contingent workers remain a great way to beef up your staff quickly, human resources teams are often seen as unnecessary when hiring the free agent worker. I hear time and time again from business leaders who use contingent labor to sidestep HR and their own department head count goals because either staffing goals are already met or HR processes get in the way of hiring and scaling projects quickly. Managers use temporary workers or independent contracts to beef up their headcounts and production outputs without these costs and numbers being reflective in their human capital expenses including payroll, overtime, and other employee related expenses. As someone who has used this tactic myself working in HR for my own department, it’s not right but I understand.

Even so, the argument for using contingent labor to subsidize your department or location efforts remains strong with or without HR’s approval. Strategies to quickly adding manpower to your project generally happen three different ways:

• Outsourcing Your Contingent Workforce. Companies use staffing agencies as a way to try out these workers before they buy. These organizations are responsible for pay, benefits and other compliance and documentation responsibilities.
• Billing and Invoicing Through Procurement. Consultants work directly with someone in accounting and procurement to make sure they are 1099’d properly.
• Centralized Contingent Workforce Plan. HR or Recruiting manages the centralized process of permanent employees through their ATS as well as the contingent workers ensuring that contingent workers stay independent contractors in the eyes of the IRS using their 20 factor test.

Whether permanent, temporary or independent worker, building a network of quality candidates with real-time updated information about where they are at any given time and where their availability will be over the next days or weeks is absolutely critical. TalentCircles is the ideal platform for this.

Jessica Miller-Merrell, SPHR is a workplace and technology strategist specializing in social media. She’s an author who writes at Blogging4Jobs. You can follow her on Twitter @blogging4jobs. 

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