Contingent Workers Fill the (Skills) Gaps

Anita Brienza, GMS - Jun 25 2018
Published in: Ask the Experts

There’s a talent shortage. And a skills shortage. But you know what there are plenty of? Contingent workers! We’re talking about free agents, gig types, freelancers, contractors, independent folks…that growing army of employer-free, entrepreneurially-minded individuals who like the flexibility and choice of working when and where they want to – and deciding what they will work on. 

Though an amalgamated global estimate of those in the contingent workforce is a moving target, the U.S. and Canada account for half of the world's freelancers, with Europe coming in a not-too-distant second; around 30%. (The McKinsey GlobaI Institute estimates that between the U.S. and the EU, up to 162 million individuals engage in independent work.) Asia has more than 11% of such workers; Australia and South America have more than 4% each, and Africa, less than 2%. By 2027, it is projected that the majority of the U.S. workforce will be freelancers. The numbers are rising globally as well. That places more strain on an already limited traditional talent pool and foretells a radical change in the way companies will be staffing for talent and skills needs.  

Leveraging contingent labor offers a business solution that is scalable and flexible, doesn’t require benefits, and provides access to specialized skills on an as-needed basis, often on short notice. Diane Mulcahy, author of The Gig Economy, notes that this new workforce phenomenon represents a potential solution to winning the war for talent, and offers a number of potential advantages over the traditional recruiting of full-time employees. (For example, companies can assemble a “dream team” to come together for one project, and then disband when it’s completed.) It may be possible to reduce spend, heighten efficiency, and enhance performance, and you’ll be able to track, source, schedule, and monitor performance with analytics. It can also be a path to trying out talent in a position before formalizing the worker as a permanent hire.

Some form of flexible talent is already being used by 62% of HR managers. It’s time to learn about owning this business solution!  

Prepare now, before this trend takes hold. 

Integrate – or plan for – a contingent workforce management program for your company or clients. That gives you time to learn the ropes and identify where you will find good contingent candidates – an advantage, since you’ll have more competition as more companies discover and tap into the on-demand worker pool. If you see traditional talent leaving the workforce for independent work, keep them in your circle, in case you need their talents later.

Determine the tax, legal and financial requirements for and drawbacks of using contingent workers. 

For global assignments, tax and legal issues will vary by country. Work with counsel to clearly define what constitutes a contingent worker, who is an employee, and who is not an employee. Spell out the parameters if any mobility assistance is offered, how payment will be rendered, name the liabilities and confidentiality issues (especially as contingent workers are free to work with competitors when they leave your project) and make this knowledge a part of your contingent worker program.

The trend lines tell the story: Using contingent talent isn’t a matter of if, it’s a question of when you will integrate such workers into your (or your client’s) business. Advance planning will speed your learning and line up your resources for that moment you’re ready to take the first steps into “contingent territory.”