Contingent workforce advantages
Cost savings is one of the major benefits for organizations that hire contingent workers. Organizations save on administrative costs associated with hiring and maintaining full-time employees. Companies hiring contingent workers do not have to make contributions to their Social Security, make unemployment contributions or pay payroll taxes. Organizations are also not required to offer contingent workers health insurance and provide them perks like paid time off.
Flexibility is another benefit of the contingent workforce. Organizations can hire contingent workers on an ad-hoc and on-demand basis, and then terminate their employment once the work requirement is met.
The contingent workforce also helps businesses offset a skills gap. Contingent workers provide businesses with a large pool of experienced candidates who are already equipped with the skills required to execute a project efficiently.
Contingent workforce disadvantages
There are challenges associated with hiring contingent workers. It can be difficult to find a contingent worker who can not only perform the required job, but who can also adapt quickly to an organization's corporate culture. Companies are also often skeptical of sharing insider information with these non-permanent workers.
Organizations can also face legal and compliance issues due to worker misclassification. If an organization declares someone a contingent worker when in fact he or she should be classified as an employee, the company runs the risk of paying hefty fines and penalties. Organizations must be aware of their industry's regulations in regards to contingent workers before developing a strategy for hiring them.
With more organizations relying on the contingent workforce, businesses must be prepared to meet the challenges and demands associated with managing the contingent workforce. It is therefore important to implement standardized processes for hiring and developing a contingent workforce.
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