D
Dexterity | Catalyst
“It seems we’ve lost sight of the reciprocity
that once underpinned social contracts, that
the balance has tipped towards maximum
economic flexibility for employers”
Labour market shift
‘Contingent workforce’ is an umbrella term that
covers a range of employment relationships. In
essence, it’s a pool of labour available for hire on
an on-demand basis, and includes part-time or
temporary workers, freelancers, independent
contractors and consultants. Contingent workers
are not on a company’s payroll because they are not
full-time, permanent employees. They may work
onsite or remotely. And they are a core element
of the global trend towards a more diverse – and
fragmented – workforce.
According to Deloitte’s 2019 Global Human Capital
Trends survey, more than 40% of US workers now
work on a contingent basis. In the EU, freelancers
are the biggest labour group, with numbers doubling
between 2000 and 2014. Deloitte’s latest millennial
study also reports that 64% of respondents –
already in full-time employment – are looking for
‘side hustles’ to make ends meet. And increasingly
long-lived and healthy retirees are re-entering the
workforce, often on a flexible basis. The survey
also suggests that it’s not just governments that are
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struggling to keep up with this labour market shift.
The majority of organisations seem ill-prepared for
their new-style workforce, taking a ‘transactional’
rather than a ‘strategic’ approach, with inconsistent
or non-existent processes for managing and
developing contingent workers. Too often, they are
deployed tactically to ‘fill gaps’ rather than being seen
as a longer-term solution to providing crucial skills.
One reason for the prevalence of this approach is that
organisations have traditionally recruited contingent
workers via a straightforward procurement process,
hiring in people as they would any other outsourced
resource. This might be efficient, and might have
worked when contingent workers represented
only a small percentage of the workforce, but with
on-demand workers now playing a much more central
role, best rates and best value are, in themselves, no
longer enough.
At the very least, companies are in danger of failing
to make the most of the much-needed skills that
contingent workers offer. At worst, a strict efficiency-
led approach raises the spectre of exploitation.
Mark Jones, senior vice president of Alexander
Mann Solutions Americas, has watched the rise of
on-demand labour for a number of years. “Even back
in 2008, companies like Microsoft were anticipating
a 50:50 split between their employed and contingent
workforce, and, for some companies, that’s already
happening,” he says.
While companies have always used contract
workers, the rapid rise of technology and digital
platforms over the past decade has made it easier
than ever for companies to leverage a growing
contingent workforce, and for workers to offer their
labour on a more flexible basis. Physical location has
also become less of a barrier. For example, research
by the Indian Council for Research on International
Economic Relations suggests that India is home to
some 15 million freelance professionals, offering a
range of skills and services across the globe.
For Jones, if employers are to make the most of
this new world, they need new engagement models
and practices to become the company of choice for
a contract-fluid workforce. The issue is not just one
of leveraging flexible workers, but also engaging
with them. Increasingly outdated and outmoded
regulation, such as the US’s co-employment law,
also needs to be carefully negotiated. “Companies
need clear protocols around what they’re responsible
for and what flexible workers – or their agents
– will handle,” says Jones. “Forward-thinking
organisations that take a creative and innovative
approach to engagement with contingent workers
will win important competitive advantage.”