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.
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
Savings. The use of temporary employment
arrangements increases each year. The staffing vendor's markup of
25 percent to 30 percent must be included when calculating whether
the cost of contingent workers is indeed lower than hiring permanent
employees. Cost-effectiveness doesn't depend just on savings in salary
and benefits; it also depends on output. A contingent worker whose
productivity is lower than a similarly situated permanent worker may
not be a bargain. It may also be less expensive to outsource the job.
There are many types of contingent workers.
Agency temporaries. The more traditional
type of temporary worker, employed through an agency, is still the
most likely to be used as a staffing alternative. Agency “temps” tend
to be used in clerical, secretarial, nursing, accounting, word processing,
or light industrial duties, to fill in for employees on leave, handle
excess or special workloads, or perform short-term assignments. The
worker is generally an employee of the staffing agency.
Contract employees. These are workers
who, by contract, perform professional, production, or administrative
support activities. Generally, the employer and employee deal directly
with one another, but sometimes there is an outside service firm that
negotiates the contract. Typically, contract employees include lawyers,
doctors, security staff, cleaning and maintenance staff, editors,
and computer technicians.
Directly hired. These are usually
members of a pool of employees who are available to work as needed.
Many large companies have formed their own labor pools of temporary
employees, often made up of retirees or former employees. These employees
might fill in for others who are out, assist in areas with immediate
needs, or participate in special projects. They are usually considered
to be employees of the company, even though their employment is contingent
upon demand. This form of a contingent workforce gives employers an
alternative to hiring temporary employees from an agency.
Leased employees. Leased employees
work for a company that, for a fee, provides temporary or permanent
employees and is responsible for their wages and benefits. A leasing
company can supply a single employee, a “crew” of employees, or an
entire staff, and may take full responsibility for payroll, benefits,
and personnel functions. A leasing firm may also be responsible for
advertising, supervising, recordkeeping, housekeeping, security, or
general office management. Small employers may turn to leasing companies
for employees because they don't have to provide benefits, and they
can save on administrative costs.
These are employees
who generally work less than 30 hours per week, but are still on the
employer's payroll and are entitled to certain benefits of employment.
Please see the
national Part-Time Employees
Independent contractors are self-employed people
who work on an agreed-upon product or service, to be delivered at
a certain time, for a set fee. They may be considered contingent workers
in the sense that their services are not needed on a permanent basis.
Independent contractors have control over when, how,
where, and in what way they work. One way to determine if a worker
is an independent contractor is the "lunch" test. If an employer is
responsible for telling a contingent (temporary) worker when to go
to lunch, the worker is contingent, and the employer is responsible
for the worker and accountable for the worker's actions. If not, the
worker is most likely an independent contractor.
Please see the
national Independent Contractors