May 6, 2022

Sustainability in Contingent Workforce – Leveraging Benefits and Mitigating Risks

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Businesses of all sizes, across all industries, have seen a shift towards the gig economy - especially after the COVID-19 pandemic changed the paradigm of workforce management. As the world undergoes the change from a traditional to a contingent workforce model - there is an increasing need for sustainable contingent workforce management systems.

What is a Contingent Workforce?

A contingent workforce is a labor pool of contingent workers. ‘Contingent workers’ is a new fancy term for those we used to call freelancers, contract-workers, part-timers, temporary workers or ‘temps’, independent consultants, and a host of such terms. They are employees who are hired on a temporary basis (often for a single project) - and often not given the job security, benefits and perks that a permanent employee will enjoy.

Why is it Significant?

Contingent workers are becoming more significant over time with a global shift towards a ‘gig economy’ for a few simple reasons -

Shortage of niche skills

The IT field is growing faster than ever, with new technologies, infrastructures and innovations flooding the industry every day. This has created a growing need for niche digital skills - skills that a traditional tech graduate may not have.

The great resignation

The gig economy brought with it the great resignation - where a large demographic (mainly baby boomers) has started a mass culture of leaving companies that do not meet the new expectations of work culture, ethic and employee appreciation. Studies show that roughly 10k boomers are retiring every day in the US now! This has created large-scale vacancies - hard to fill with a permanent employment model.

The need for flexibility

The COVID-19 pandemic had a monumental impact on the global economy - and one manifestation of that was the massive amounts of workers that were laid off. But, as the economy recovered, companies found themselves empty-handed, and needed to quickly fill in their workforce gaps. Contingent workers were the quick, efficient and suitable solution at that point - and that trend seems to have stuck.

Millennials and Gen Z

Millennials and Gen Z will make up the majority of the global workforce in the immediate future - and companies will have to cater to their beliefs and professional preferences. Studies show that roughly 3/4ths of these generations plan to become entrepreneurs - and more than 2/3rds of them want their work to resonate with their personal interests. This is a clear marker for an increased shift to contingent workers becoming a larger part of any workforce.


Benefits of a Contingent Workforce

There are many unique and undeniable benefits of employing contingent workers, and some of the most significant ones are -

Access to niche talents

Professionals who have developed unique and specialized skills in specific niches do not want to be in a full-time job with one company - where their skills will not be used to the fullest extent. For example - someone who specializes in a particular aspect of AI-chatbot automation won’t have a lot to do once he’s created a framework for a certain company. It’ll make more sense for both them, and the company, to part ways once the work is done.

Flexibility - both-ways

Both employers and employees can enjoy a much greater level of freedom and flexibility within a contingent work environment. Employers can hire people (as many, and when needed) and relieve them of their duties once they’re done. Employees can explore many industries, companies, roles and work environments as they hone their skills and become niche experts.


A vital part of any consideration - the financial aspect - also tends to show the contingent workforce model in a favorable light. For employers especially, considerations such as taxes, employee compensation, perks and benefits are a big factor - and contingent workers cost the company significantly less than permanent employees.

For employees - the lack of said benefits, perks and extra compensation is more than made up by the freedom to be part of many workforces, and limited-time employment models.

Additionally, contingent workers are mostly experts in their fields, having honed their skills over time with many jobs, companies, and peers from different talent pools. This saves employers the extra time and money needed to train them, as they would a permanent employee.


Like every coin, there’s another side to contingent work - the risks involved for both employers and employees. Though recent trends show that the benefits outweigh the risks, it’s important to take them into account.

For Employers

Employers managing contingent labor face a variety of risks that a permanent workforce wouldn’t pose, including -

  • Dependability: Contingent workers receiving payment on a piece work basis do not face any extra hindrance should they choose to pack-up and leave - whatever their reasons may be. While this is a favorable consideration for employees (giving them higher security against workplace harassment and other employer misbehavior), it’s definitely a significant risk element for employers.
  • Company Culture and Morale: Most companies are wont to creating an internal brand - a work culture and morale unique to them (think Google!) - and contingent workers are not conducive to embracing that.

For Employees

The risks aren’t only for employers - the contingent staffing model brings a host of risks that the employees must consider -

  • Job Security: The most obvious risk for employees is the lack of job security - the constant need to find the next project once the current one ends - and the perpetual fear of not finding one!
  • Lack of inclusion: Contingent workers are rarely included in a company's extra-curricular activities - office trips, birthdays, team-building activities and the like - generally reserved for their permanent workforce.

How to mitigate the risks and achieve sustainability?

The answer is simple - implementing an efficient and effective contingent workforce management system!

What is contingent workforce management?

Just like it sounds, contingent workforce management is how a company handles its contingent workers. There are two ways they can approach this - inclusive, or exclusive. The distinction between these is vital - and is the major factor that decides whether contingent staffing will work or fail for an organization.

  • Inclusive contingent workforce management is the practice of treating your contingent labor as if they were permanent - giving them the same benefits and perks (both financial and otherwise) - and making them feel that they are an integral part of the organization.
  • Exclusive contingent workforce management, on the other hand, is when employers deny contingent workers the extra benefits that permanent employees get - and make them feel like outsiders.

Wrapping up - Best Practices

The best way to ensure that your organization employs a contingent workforce sustainably, leveraging all the benefits while mitigating the risks involved - is to figure out the perfect mix between inclusive and exclusive management systems. Every organization is unique, hence their ideal mix will be unique as well. If you keep a few simple things in mind, you should be ready to go -

  • Be inclusive when it comes to benefits, perks and employee experience - remember contingent workers’ birthdays and invite them on office trips!
  • Include your contingent workforce in the same HR processes as your permanent one - including performance analysis, appraisals, penalties, etc.
  • Be flexible, adapt, and evolve as the global economy changes - staying fixed to traditional processes, beliefs, and practices is a sure path to failure - especially with more and more millennials and Gen Z taking up top management positions across industry leaders globally.