Contingent Labor

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What is Contingent Labor?

A contingent laborer isn’t an employee a company hires. Instead, it’s someone who works for organizations only when needed. This is usually under a temporary contract. When workforce planning, a company might realize they need an extra pair of hands for only a month. This is where a contingent worker would come in handy.

This agreement works well for both the business and the worker. For the employer, they only have to hire a contingent laborer when there is demand for them. This flexibility means they don’t have to pay for labor they don’t need. Plus, as they aren’t an actual employee, they don’t have to put them on the payroll or pay for benefits or health insurance. It’s a cost-effective way of keeping positions full during busier times.

For contingent laborers, most have new jobs lined up as soon as their short contracts are over. They still get paid while keeping busy at work. While they don’t get the benefits of being employees for a single company, they have more freedom in their work.

While most organizations want to build a team of loyal, talented employees, it doesn’t make sense to overfill positions if they are not always necessary. There is the issue of the contingent workers not knowing how the business runs or having loyalty to the company. For this reason, it’s best to have a system that integrates content laborers quickly and efficiently.

For Your Reference – Related Terms

Contingent workforce, contract work, temporary work