Contingent workers are no longer the exception, but part of the norm.
The expanded workforce opens up a world of possibilities for financial leaders, according to Rebecca Senni Leventhal, founder and CEO of Atrium, a New York City-based workforce management and staffing firm. She also shares the benefits of hiring these flexible workers and the considerations leaders should keep in mind to leverage this resource for success.
Some estimate that more than 35 percent of the workforce is now made up of temporary workers. Can you talk about how using contingent workers or independent contractors differs from a company hiring full-time employees or traditional contingent workers?
Flexibility is the name of the game. It's no wonder temporary workers and independent contractors are in high demand. These contingent workers provide specialized skill sets that allow companies to quickly adapt, expand capacity, and control costs without increasing headcount.
In my experience, companies can greatly benefit from leveraging an external workforce when faced with an uncertain future. You must be agile to overcome unexpected obstacles. Therefore, establishing an expanded workforce strategy, like hiring full-time employees, should be considered an important component of overall workforce planning.
But this adds complexity. I always tell my clients that working with contingent workers requires a different approach to compliance than when hiring full-time staff. Regulatory and legal issues need to be considered, so it is important to stay informed and seek professional advice if necessary.
What should CFOs consider before moving to hiring temporary workers or independent contractors? Does it work for all organizations?
It is estimated that nearly 86% of companies already utilize a contingent workforce. It's not a trend; it's the future of work. This is a workforce model I've seen working in organizations of all sizes and industries. Additionally, gig economy jobs are only going to become more popular as younger generations continue to embrace gig economy jobs.
As CFOs look to take advantage of the agility that contingent workers bring, they need to understand the potential contingent roles in their organizations and what structures and processes are in place to support the proper onboarding and management of these types of contingent workers. It is necessary to consider in detail whether it is maintained. Having a comprehensive understanding of what it takes to hire a temp from the beginning can make all the difference in getting your temp up and running and setting them up for success.
Another consideration is whether your company has the tools you need to manage the risks associated with expanding your workforce, such as joint employment, misclassification, and compliance with supplier agreements. If you're facing these challenges, working with a partner who can solve your challenges and streamline long-term employee engagement can have a significant impact on compliance.
Given these differences, what are the key financial and other benefits that CFOs can expect from using contingent workers or independent contractors? Are there any downsides?
Again, flexibility is a big advantage of using temporary workers. These are perfect for sourcing hard-to-find skills and aligning them with market opportunities. Additionally, it can complement or support in-house resources, greatly increasing a company's responsiveness. The flexibility I mentioned is also an advantage for our external talent pool and has played a huge role in our explosive growth over the past decade.
Strategically leveraging contingent talent offers many benefits, including quality control, faster replenishment times, and cost savings through continuous optimization. However, it can also pose certain challenges that require careful management, such as uncontrolled and unmanaged growth. These challenges can lead to lack of visibility, inconsistent standards and processes, increased costs, compliance issues, misclassification, and security concerns.
Partnering with an experienced workforce management company can help you efficiently overcome the challenges of managing this population and give you peace of mind. These ensure all contingent workers are properly assessed and classified, reduce the risk of misclassification and legal issues, and provide visibility into program spend leading to optimization and cost savings.
Additionally, we can help you navigate the complex world of tax and labor law, saving you time and resources. This allows contingent workers to focus on their core financial operations with the confidence that they are compliant and cost-effective.
Can you share your insights and advice for CFOs on what they should do to prepare for hiring contingent workers?
Effectively managing contingent workers requires a strategic approach. In some cases, managers may try to get things their way by using a variety of preferred staffing partners when hiring temporary workers. However, as the use of contingent talent increases, it can become more complex to manage, limit visibility, and increase risk.
Gaining buy-in from stakeholders, developing formal processes, and choosing the right talent technology are all important steps that need to be taken from the beginning to create a seamless experience for managers and talent. Vendor management systems and dedicated monitoring resources play a huge role in effectively leveraging external labor. Therefore, connecting with someone with experience who can help you choose and operate the right technology to avoid the risks listed above can be a huge step forward.
We've talked a lot about the business case for temporary workers, but we'd be remiss if we didn't emphasize this last point. Always remember: people Behind the contingent workforce. By focusing on the contingent worker experience, you can establish meaningful relationships and attract higher quality candidates, leading to increased engagement, increased productivity, and ultimately cost savings. A people-first approach helps create experiences that attract and motivate contingent workers while fostering brand loyalty.
