Employing Contingent Workforce

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Definition

A contingent workforce is a temporary group of workers who work for an organization on a non-permanent basis. Contingent workers may include temporary employees ("temps"), part-time employees, independent contract workers, consultants, seasonal employees, and interns. In contrast, full-time, permanent employees frequently are referred to as core employees.

Trends

Because of increasing and rapid changes in the world economy, including both competitive and regulatory forces, the ability to make low-cost staffing adjustments has become imperative to have more flexible work arrangements; this has caused the contingent workforce to experience considerable growth during the 1990s and 2000s.

Reason for employing contingent workers

Some of the main reasons why organizations are hiring contingent workers are staffing flexibility for the firm, cost reduction with fewer repercussions and large pool of skilled workforce:
Staffing Flexibility: since temporary workers do not expect a long-term relationship with any one employer, the company can terminate employment at any time without causing harm to that employee, as the firm would if it were to lay off a core worker. Staffing flexibility also allows the company to hire employees who have skills that are not present in their core workforce.

Cost Reduction: Contingent workers often are less expensive in terms of salary and benefits (most contingent workers receive no benefits) and are usually already trained; therefore the company does not need to spend money on additional training.

Skilled Talent: Contingent workers provide the organizations with a large, skilled talent pool and an expanded knowledge base.

HRM & Contingent Workforce

Decisions to hire contingent workers and whether or not to integrate them into the core employee workforce may have a significant effect on the various aspect of the contingent work arrangement. Human Resource Management (“HRM”) must pay special...
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