The Future of the Contingent Workforce & Why Recruiters Should Start Placing Contractors Now
According to Forbes, 80% of executives are reporting expansion in leveraging contingent, seasonal, intermittent or consultant employees. The fact that employers are increasingly focusing their talent search on contingent workers presents an amazing growth opportunity for recruiters to get involved.
What is the contingent workforce?
The contingent workforce refers to a group of workers who are employed on a contract or part-time basis, rather than as full-time, permanent employees. This group can include freelancers, independent contractors, contractors, and consultants. The rise of the contingent workforce is a relatively recent phenomenon driven by several factors, which we’ll get into later in this post.
What is the future of the contingent workforce?
The future of the contingent workforce is bright, as employers increasingly look to this group of workers for greater flexibility, cost-effectiveness, and specialized skills. The gig economy is continuing to grow in the US and across the globe. More people are choosing to work as freelancers or independent contractors, thanks to advances in technology making remote work more feasible and efficient. With the strong demand from employers, the contingent workforce will continue to become an increasingly important part of the labor market.
Why is the contingent workforce seeing so much growth?
There is a war for talent
According to a report by Mercer, 50% of executives anticipate they will struggle to meet demand with their current talent model. Traditional talent models will no longer best serve employers as the labor market shifts and talent shortages prevail.
Both the war for talent and talent shortages can have significant impacts on the labor market and the economy as a whole. In a war for talent, companies may be forced to pay higher salaries and benefits, which can lead to higher costs and lower profits. In a situation of talent shortages, companies may be unable to fill key positions, which can slow down growth and innovation. Many employers are increasingly relying on the contingent workforce to resolve these struggles.
Employers are focusing on cost savings and flexibility
One reason the contingent workforce may be attractive to employers is because it offers greater flexibility and cost-effectiveness than traditional employment models. Employers can quickly and easily scale their workforce up or down depending on business needs, without having to commit to long-term employment contracts. Additionally, contingent workers often bring specialized skills and expertise that can be quickly and efficiently applied to specific projects or tasks.
The world of work as we know it is evolving
The world of work in 2023 and beyond is becoming more dynamic, diverse, and flexible. With companies now adopting remote work policies, there’s an opportunity to hire talent from across the globe. With new technologies becoming the norm, it has become second nature to collaborate with team members in different countries and time zones.
Workers are driving the evolution of the workplace; encouraging employers to adapt to new worker attitudes and changing market conditions. In many cases, worker expectations regarding work arrangements are changing. Many workers are looking for more flexibility and work-life balance and are willing to trade higher salaries for greater flexibility and autonomy. This may be the reason for an increased percentage of the workforce searching for remote work opportunities, taking up freelancing, or considering other non-traditional work arrangements.
What does this mean for recruiters?
The growth of the contingent workforce presents a significant growth opportunity for recruiters, who can play a key role in helping businesses source and manage temporary and contract workers. By offering contractor placements, you can help companies meet the growing demand for flexible staffing solutions.
Many contingent workers have highly specialized skills that are in demand in certain industries. By making contractor placements, you can help clients access this talent pool and find workers with the desired skills and expertise.You can tap into new revenue streams and continue expanding your recruitment business in a growing segment of the labor market.
As a recruiter, the benefits of leveraging the contingent workforce are obvious and very much outweigh the challenges. That being said, it is still worth mentioning some challenges of making contractor and temporary placements, especially in the US.
Managing a contingent workforce can be complex, as it requires compliance with a range of labor laws and regulations. By making contractor placements, recruiters can help their clients navigate these challenges and ensure that their temporary and contract workers are managed effectively.
One way that recruiters can easily onboard contractors and ensure compliance is working with an employer of record (EOR) such as LGWS, who specifically caters to supporting international recruitment companies with contractor or temporary placements in the US. Click here to learn more about LGWS.
Disclaimer: This post is provided for informational purposes and should not be considered legal advice, the final word on this topic or a political opinion.