A Comprehensive Guide to Hiring Contingent Workers Today

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Written By Lilly Miller

Ever since the pandemic broke out, contingent staffing has been on a sharp and constant rise. Namely, this concept of hiring temporary employees, also known as on-demand workers, is one of the most efficient ways of fulfilling the current needs of many companies throughout the world.

While it had been around for quite some time, it wasn’t until the beginning of 2020 that it really took off. Nowadays, many companies depend on contingent workers, from catering companies hiring extra chefs to deal with large orders for takeaway dishes to advertising agencies hiring freelance designers to create graphics.

Needless to say, there are many advantages to hiring contingent workers, especially in these circumstances. Flexibility is definitely one of them, accompanied by mitigating business risks, for example. Instead of having a large number of workers on the payroll, companies utilize on-demand staff to work only for the hours they are needed.

Also, contingent work can provide great value to individuals, too. Contract-based jobs can often mean higher pay while offering flexibility to those looking to take on a second job, pursue a passion project, or care for a family.

Still, starting with on-demand hiring can be rather intimidating. That is why we’ve prepared the following guide to help you decide if that is the road that you want to take and, if so, how to go about it.

The basics

Hiring Contingent Workers 101: A Comprehensive GuideTo work with contingent staff, managers should be flexible. The opportunity to grow or reduce the workforce allows managers and their businesses to become more agile at dealing with problems that arise on the go.

Naturally, if the project goes well, it is quite likely that the same contingent worker(s) will be asked to collaborate with the same company in the future, which is a great incentive for the workers.

Typically, your day would start with posting available work onto the platform where you manage your contingent workers. Your posts for such employees should be clear and specific when it comes to the date, time, compensation, payment terms, and requirements to finish the task at hand.

Potential applicants then reply directly to your post, you select those you want, and they can start working.

What can you get out of the deal?

To begin with, you’ll be able to save money on a fixed payroll or in head-hunting and temp-work agency fees, especially if you run a small or medium enterprise that might require a small number of temporary workers. On the other hand, you might need an efficient global contractor for workforce solutions to help you manage and retain top contingent talent.

Next, there is payment transparency. You’ll be paying real work and not just admin fees, but you’ll need to be ready to manage your own on-demand staff to avoid the fees some agencies charge both from companies and freelancers. That is a challenge that can be overwhelming for some and you need to make an honest assessment of your capacity to do all that on your own.

Also, companies working in unstable or seasonal markets might want to start small and build their community of freelancers through on-demand staffing. A network of useful contacts can give you the security of being able to source skills (and even full-time employees!) whenever you need them.

In terms of results, they can be instant. When time is tight and the need for extra help may come at the last moment, it is quite handy to have your own team of on-demand staff to support you day-to-day. That allows you to respond to crises faster and find an extra pair of trustworthy hands in a very short time by reaching out to your own network of temporary workers and freelancers.

The disadvantages of hiring contingent workers

Hiring Contingent Workers 101: A Comprehensive GuideIt can be quite time-consuming and stressful to manage an on-demand team for a small business owner who is involved in most or all areas of the company. Payroll, feedback, and overall management operations all increase in volume with an on-demand team.

Also, if your contact network is small to create an on-demand talent pool, screening new applicants will become a necessity, which means you’ll need to promote an open call for freelancers and then screen those you believe could be the right employees. 

Next, payroll can turn into a nightmare for those not experienced in working with flexible workers. Requesting invoices and paying taxes each month will be different each month since the volume of hours and jobs will fluctuate from week to week.

Furthermore, managing an on-demand workforce can be tricky when it comes to the work regulations regarding flexible workers, especially if you live in a country where such regulations change often, which has been the case in many countries recently.

Basically, you have to be familiar with all applicable laws and regulations or hire legal experts to help you deal with the legal aspects of having an on-demand team.

How to set up a contingent workforce

If you’ve weighed up the pros and cons of having on-demand staff and decided that you need them, it is time to get to work.

First, make a list of things you can delegate in your business. While your internal team focuses on key activities, your contingent workforce can take care of routine tasks such as data entry and document prep.

Next, map out the skills of the external workers who can help with the workload. Create job descriptions for the people you need and evaluate the volume of work you want to delegate.

Calculate the number of hours or activities in which you will need support. This will help you with both budget and management once you start working with a contingent team.

Then, decide on the number of collaborators you wish to hire. A rule of thumb is to overestimate the number of people included in your contingent workforce. It is better to have more contacts than too few.

After that, you should decide on a workflow method, i.e. a task and communication strategy. While micro-companies can start with pen and paper, larger teams may need to onboard everyone into a productivity app.

Make sure that your contingent workforce has everything they need: write clear work instructions and work descriptions, have contract templates ready, and specify your payment terms. Your external collaborators should be able to access these documents and can find them easily. Only then can you actually start recruiting.

As you can see, your first task is to establish whether hiring on-demand workers makes sense. If you see some potential, set everything up carefully before you get to the recruiting stage to avoid having to deal with the basics while at the same time trying to run every single operation.

Only those who do it properly and on time can count on reaping the benefits of hiring contingent workers.

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