A Guest Post by Lilly Miller
The last year’s outbreak of COVID-19 forced humanity to adapt to many new circumstances to keep rolling. This is probably the most evident in the world of business, where government actions like lockdowns completely disrupted the global economy and forced companies to work in an environment where market conditions change on a daily basis.
As you can probably guess, this “new normal” gave birth to some very interesting business models and practices that try their best to leverage the ever-changing landscape of global pandemics.
In this article, we are going to take a quick look at the so-called “contingent workforce” – one of the most popular options for COVID-19 survival – and see what this hiring arrangement is all about.
What is the contingent workforce anyway?
A contingent workforce can be best described as a pool of workers hired on an as-needed basis. This pool usually consists of independent contractors, freelancers, and the workers hired temporarily through the mediation of some third-party staffing agency.
The rise of this arrangement came as a lifebelt for a whole slew of workers that lost their previous employment during the pandemic. According to recent research, globally, 52% of professionals that make the contingent workforce poll have lost their jobs due to COVID-19.
As for the other side of the coin, it’s really not that hard to see the appeal of making the project-driven, time-limited hires. With so many forces dictating the market conditions and sometimes even bringing entire markets under lockdown, companies need this sort of agility to remain viable. Instead of keeping the entire staff on the payroll, businesses worldwide can now hire the professionals necessary for specific projects only when needed and keep them employed only as long as the project development demands.
Due to the specific circumstances, the global economy operates at the moment, we can assume that most organizations around the world use the services of professional global contractor workforce solutions, at least to some extent.
With all things we have mentioned above in mind, it wouldn’t be entirely fair to brad the contingent workforce as something that is 100% the COVID-19 offspring. The pandemic outbreak definitely gave this popular arrangement some much-needed wind at the back, but the global trends were making a motion in the direction of a flexible workforce long before we learned about the dangers of this new virus.
As early as 2010, the studies predicted that as much as 40% of the US workers would be a part of the contingent workforce pool by the end of 2020 (grimly accurate predictions). One of the reasons behind such a promising outlook is the business sensibility of the Millennials. According to some estimation, the so-called “gig economy” is the preferred option of 64% of workers belonging to this generation and as much as 73% of young Gen Z professionals.
The other big booster of the “gig economy” that is not related to the COVID-19 outbreak can be found in good social mobility and solid salaries that comes with this arrangement. Yes, contrary to popular misconceptions, a quarter of this workforce earns more than $100,000 a year, which makes up for more than a decent living.
So, it’s safe to say that although the COVID-19 put focus on the concept of the contingent workforce, this hiring arrangement developed long before the pandemic and will continue to extend to the younger generations of professionals long after the “new normal” bece thing of the past.
The benefits of the contingent workforce for companies
But, let us go back to the complicated necessities of the current economic landscape. Aside from the novel ideas we have covered in the previous passages, what are the tangible benefits the employers can expect by hiring the labor from the continent pool?
- Lower payroll expenses – As we briefly stated above, project-based hires save companies a lot of money in the periods of downtime, which became fairly frequent in the wake of lockdowns and other COVID-19 preventive measures.
- Personal touch – Every new worker that joins the project brings in a sense of individuality and a bunch of fresh perspectives. These perks prevent staleness and immobility that are usually associated with long-established worker collectives.
- Opportunities for building networks – In the previous sections, we have mentioned that the idea of contingent workforce developed independent of COVID-19 and will continue to develop long after the pandemic is over. Tapping into this pool now allows you to build a relationship with the up-and-coming professionals that will make the pillar of the business world of tomorrow.
Of course, the gig economy has its share of drawbacks as well. In the case of the contingent workforce, that is the often painful process of onboarding and establishing initial collaboration. The issues of screening and payroll woes are also present, but they can be leveraged by using the services of a third-party hiring agency.
We hope this short breakdown gave you a general insight into the concept of contingent workforce and some reasons behind its growing popularity. The current global economic outlook is unstable, to say the least, and we still don’t know when this state of emergency will be over. If gig economy is the way out of this maze, even for the time being, we say it’s worth a try.