Contingent Worker

What is a contingent worker?

A contingent worker is an individual who is hired on a non-permanent basis, typically for a specific project, assignment or period of time, rather than an ongoing permanent role with a company.

They may also be referred to as temporary workers, freelancers, or contractors. Contingent workers typically do not receive the same benefits and job security as permanent employees.

What qualities do employers look for in contingent workers?

Contingent workers may possess a variety of qualities depending on the job they are hired to do, but some common qualities that employers look for include:

Flexibility: The ability to adapt to different work environments and changing project requirements.

Specialized skills: Contingent workers are often hired for the specific skillset needed for a particular job or project.

Reliability: The ability to show up on time and follow through on commitments, with a good work ethic.

Professionalism: They need to act with the same level of professionalism and follow the same rules as permanent employees.

Technical proficiency: Being well-versed in the tools and technologies required to perform the job effectively.

Self-management: The ability to manage one's own time and resources effectively when working independently.

Strong communication skills: Since they work with different teams and managers.

Strong problem-solving skills: Contingent workers are often brought in to solve specific problems or fill specific skill gaps on a project, so they need to think critically and creatively.

What factors may motivate individuals to pursue work as contingent workers?

There are several reasons why some workers choose to work as contingent employees: HBR’s labor research identifies contingent work as one of the fastest-growing segments of the labor market, driven by both employer demand for flexibility and worker preference for autonomy.

1. Flexibility: Contingent work allows individuals to choose when and where they work, and to have more control over their schedule and work-life balance.
2. Variety: These workers have the opportunity to work on a variety of projects and assignments, often in different industries and with different companies, which can be more interesting and engaging than working in a permanent role.
3. Control over earning: Some workers prefer the control and potential for higher earnings that can come with being paid on a project or contract basis, as opposed to a fixed salary.
4. Self-employment: Some people prefer the independence and autonomy of self-employment, and may choose to work as an independent contractor or freelancer instead of being tied to one employer.
5. Specialized skills: Contingent worker are often experts in their field, having specialized skills and knowledge that employers want to hire for specific projects.

It’s worth noting that it is not always a choice, sometimes due to the nature of their field or the availability of job, some workers have to take a contingent role.

What are the benefits of hiring contingent workers?

There are several potential benefits to an organization that hires contingent workers, including the ability to:

Adjust the size of the workforce as needed without committing to permanent employees.

Access specialized skills for specific projects that the current workforce may not possess.

Save on compensation and benefits costs such as overtime and healthcare.

Save on training costs, as contingent workers often bring advanced knowledge and skills already in place.

Avoid certain tax responsibilities by not having to withhold and deposit payroll taxes, and not having to pay matching employer contributions for Social Security and Medicare.

According to HBR's labor research, contingent workers are projected to represent over 40% of the US workforce within the decade, as organizations prioritize workforce flexibility. SHRM's talent acquisition guidance recommends a formal contingent workforce strategy that defines when and how to engage each type of non-permanent worker.

Can any worker be classified as a contingent worker?

It is not always clear if an individual can be classified as a contingent worker, as there are laws and regulations in place to protect workers from being misclassified in this way.

Factors such as the nature of the work, the permanency of the relationship, the level of control, and investment in equipment and facilities, among others, must be considered in order to make a determination.

As these complexities are quite high, it is advisable to seek legal advice before determining if an individual can be classified as a contingent worker. SHRM’s talent acquisition guidance emphasizes that organizations with structured contingent worker programs fill specialized roles 40% faster than those without a defined process.

Integrating contingent workers into a broader talent strategy improves outcomes. Using pre-employment assessments alongside a structured hiring plan ensures compliance. Strong talent acquisition practices focused on skills-based hiring improve outcomes.

Frequently asked questions