Companies are likely to increase their use of contingent staff relative to permanent staff. Use of contingent staff has been on the rise for decades, and now the recession has impacted companies' workforce planning such that companies want the flexibility inherent with contingent staff. Labor law firm Littler Mendelson predicts that contingent labor could rise to as much as 30% to 50% of the U.S. workforce. When referring to contingent staff, I'm talking about all types:
- Temporary employees hired through an agency
- Temporary employees hired directly
- Part-time employees
- Outsourced jobs & outsourced functions
- Retirees who return
- Consultants/Freelancers/Independent Contractors
- On-call workers
It's easy to see why contingent staffing is attractive to employers:
Flexibility - With increasing frequency, businesses today are finding they don't need a particular skill set on staff full-time, year-round. When they need the skill they hire someone on a contingent base, in a just-in-time type model. In a special report last fall, Workforce Management magazine compared the use of contingent staffing to working on a movie set where workers are grouped together by functional crews, brought in when they're needed, then disbanded when their project is finished. Business today is starting to look more like movie making in regard to how they staff.
Cost Savings - Even if the contingent staff member's wage is the same as a permanent staff member, cost savings can result because you are only employing the contingent staff when you absolutely need them. Therefore the company saves money by not carrying the salary during slow periods.
Reduced risk - Contingent staffing allows employers to "try before they buy" and evaluate performance and cultural fit before making a permanent staffing decision.
Access to a larger pool of candidates - Certain people with unique skill sets or hard-to-find work experience may only be available on a contingent basis.
Overcome uncertainty - Overstaffing can lead to diminished profitability and competitiveness and understaffed can mean missed opportunities for the business. Turning to contingent staffing solutions can help businesses get through periods of uncertainty.
As employers and HR managers re-think their business plans and staffing needs to meet new demands they'll be wise to reconsider the role contingent staffing can play in the organization.
Aaron Green is founder and president of Boston-based Professional Staffing Group and PSG Global Solutions. He is also the vice chairman of the American Staffing Association. He can be reached at Aaron.Green@psgstaffing.com or (617) 250-1000.
About HR Columns
Featuring human resources advice and columns from The Boston Globe's On Staffing and Hire Authority writers.