The contingent workforce describes the growing group of workers who are engaged by companies on a non-permanent basis. They may be freelancers, independent professionals, temporary contract workers or consultants; however, they are generally united by a desire for more variety in their work and more control over their career. While the millennial generation has largely led the charge, the trend is spreading across a broader range of skilled professionals.
This increasing casualisation is suiting more employers too. Companies have significantly increased their engagement of contingent workers over the past decade as a means of managing rising labour costs, supplementing workplace talent and building their agility in a rapidly changing marketplace.
A growing global trend
Results from Deloitte’s 2015 Global Human Capital Trends indicates that eight out of 10 respondents believe demand for skills is driving a trend toward greater use of contingent workers.
Countries such as the US are leading the way. A recent report from the US Government Accountability Office estimates that just over 40% of the country’s workforce is made up of contingent workers and this is expected to grow to 50% by 2020. Meanwhile, a 2013 study by Research New Zealand indicated that contingent workers comprise around 8% of the local market; however, this number is expected to have increased in more recent years.
Hamish Wilson, Human Capital Practice Leader with Deloitte New Zealand, says growth in the contingent workforce presents opportunities for organisations to adapt to changing market conditions. “Organisations have to work in an ever-faster changing world – 65% of children entering primary school today will end up working in jobs that don’t exist yet,” he says. “Contingent workers facilitate easier adaptation due to their often project-based and skill-centred focus.”
The engagement of contingent workers also allows companies to review their operations. “For example, for some organisations surveyed in the Deloitte report, an increasing contingent workforce provided an opportunity to change the cost structure from a continuous salary cost to project-based expenses, which is a labour on-demand concept,” Wilson explains. “Not only does this mean cost is only incurred when a resource is required, it also means a very focused and concentrated effort by the right employees at the right time.”
The challenge of engagement
With more workers looking for new career experiences, recruiters and HR professionals must consider how they can attract the best contingent candidates.
“People who are highly skilled want to take control of their own career,” says Toni Jackson, Director APAC at SAP Fieldglass, a company that draws on a contingent workforce while also providing the technology to help other businesses manage their own casual workers. “They want to be their own boss, so you need to work to attract the best talent and your brand has never been more important.”
Wilson adds that companies also have practical issues to address. “Organisations are frequently challenged by a lack of integrated workforce strategy,” he says. “This makes it difficult to develop a cohesive approach for determining whether contingent workers align with a company’s objectives and purpose. Contingent workers bring a diverse range of skills, capability and abilities. Organisations must therefore become adept at determining where best to place them or if a permanent employee is a better solution to their needs.”
This is particularly relevant for roles that may involve ‘trade secrets’ or intellectual property best retained within a company. “When contingent workers support business-critical functions or become a key point of contact with customers, it is debatable whether a contingent model is suitable,” says Wilson.
Managing contingent workers
Sean Walters, Director of recruitment firm Rice Consulting, says recruitment and HR professionals need to sharpen their focus on skills in order to find and manage the right contingent workers. “Rather than just looking to fill a role, you need to match key skills to a particular project,” he explains. “That means you must have a good understanding of what a project actually needs.”
Technology can also assist in the planning and management of contingent workers. “New technologies, including social, mobile, analytics and cloud solutions are continuously improving the ease of integration for contingent workers into an organisation,” says Wilson. “A good data management system is also required to support an organisation in their planning, as well as enable them to easily identify skills of their contingent workforce and how to best map that to their requirements.”
Jackson adds that technology also creates greater visibility around the work of contingent employees. “People can come and go within an organisation and all their data from their performance is kept inhouse,” she says. “It’s also important to remember quality control. The interviewing process hasn’t gone away but, when looking for contingent workers, hirers generally only want to see the top three resumes.”
As the contingent workforce continues to grow across New Zealand, companies need an integrated workforce strategy to help identify and manage their recruitment needs. “This enables an organisation to identify their requirements for contingent workers and plan the types of talent necessary at any given time,” says Wilson. “There are not enough companies doing this today.”