Contingent Workers: What you need to know

The temporary or contingent workforce is the fastest growing segment of the national workforce, with almost 75 percent of employers in all industries using them, according to results from the 2010 CyberShift American Payroll Association Trendline Survey, "It's About Time." Contingent workers are those who are hired through staffing firms or leasing companies and whose jobs are structured to last only a certain length of time. The contingent workforce may include part-time temporary workers, independent contractors, consultants, contract employees, leased employees, and direct hires. Other than some leased long-term employees, most contingent workers are considered “temporary,” and therefore the terms “contingent” and “temporary” are often used synonymously. While most companies hire only a few contingent workers at a time, some may lease their entire workforce on a quasi-permanent basis.
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Defining contingent workers. If a company does not clearly define what is a contingent worker, who is an employee, and who is not an employee, managers may start using contingent workers to fill regular positions. For example, if there is a hiring freeze on regular employees but not on contingent workers, those workers may end up as long-term employees.
Benefits. Employers using contingent workers have potential advantages in both flexibility and cost savings. Workforces can be expanded and contracted as needed. Employers may also achieve reduced labor costs through lower hourly wages and the absence of benefit payments. Employers find that the use of contingent workers allows them scheduling flexibility, alleviates overloads, accommodates onetime projects, and prevents a succession of expensive hires.
Savings. The use ...

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