Advantages and Disadvantages of Using Contingent Workers

Like most things in life, there are upsides and downsides. Our last post examined the pros and cons of being a contingent worker. As promised, this companion post looks at the pros and cons of using temp or contingent labor as part of your organization’s workforce management strategy. The following post weighs the advantages and disadvantages of using temp labor from the employers’ perspective.

Cost Savings | Not surprisingly, cost savings is one of the primary benefits an employer can expect when using contingent labor as part of their overall workforce mix. Particularly in industries where there tends to be fluctuations in workloads whether due to seasonality or other factors. Contingent labor can help a business ramp up quickly to address spikes in customer demand which not only helps avoid losing business, but also allows for such rapid expansion at a lower cost than would be incurred using full time resources. Companies can save on sourcing costs using a staffing supplier. They also save on the cost of benefits because contingent workers don’t typically receive employee benefits.

Skills & Expertise on Demand | Another advantage of hiring contingents is found in the skills contractors can bring immediately to bear on your projects. Because they’re typically hired for specific activities, contingents often only require training for specific skills needed for the project they’re engaged on. In some cases, specialized contingent labor needs no training at all. Moreover, hiring managers routinely report that ICs and other contingents often bring new ideas, techniques and experiences to their projects, helping achieve better than expected results.

Talent Pipeline Development | The last key advantage of using contingent labor can be found in those organizations that harness contingent workforce to develop an ongoing talent pipeline. Contingent workers can demonstrate their skills and abilities as well as their alignment with the company culture and managers – recognizing exceptional talent among the contingent workforce – often promote contractors to fill vacant full-time positions. This kind of “try-before-you-buy” capability helps reduce turnover as well as onboarding/offboarding expenses.

On the other hand, there can be a downside to using contingent labor at your organization.

Underperforming Workers | One of the disadvantages most commonly voiced by employers using contingent workers is that it can be hard to ensure contingents stay engaged and motivated. This may be true for a number of reasons, such as the fact that, due to the transient nature of temp work, contingents may not give their full effort, knowing they won’t be at the job for long. This may be for any number of reasons but is largely due to the fact that because they don’t qualify for employee benefits, contingent workers are not fully invested in the success of your company and its mission.

Poor Fit for Skills and Training | Sometimes, staffing agencies are spread thin and serving many customers besides your company. As a result, they don’t always dig deep into your company culture or detailed job requirements which can make it difficult for them to ensure good fit among the candidates they put forward. Other times, the gap is internal when managers aren’t confident in the abilities of the contingent workers they’ve engaged. This leads to a trust deficit, micromanaging and poor interaction between your company and its contingent workforce which can be a drag on productivity. Also, contingents are typically expected to be current on safety practices and other trainings. The absence of proper safety training during onboarding contingents can lead to injuries and liability claims.

Cultural Misalignment | Contingent workers are often made to feel separate from their full-time cohort who often view these workers as expendable and interchangeable. While no one expects a temp worker to grow overly committed to the workplace, feelings of alienation can impact on their effectiveness on the job. In any organization, workforce cohesion – both the full-time and contingent elements – is essential to productivity and success.

If you’re an organization thinking about adding contingent labor to your workforce mix, you need an experienced guide to help develop your strategy. nextSource can help ensure you reap the most of the advantages and minimize the disadvantages along the way.