The Contingent Work Force

Contingent Workers:

Part time employees>

Part time employees work fewer than 40 hours a week. In general, part timers are afforded few, if any, employee benefits. Part time employees are generally a good source of employees for organizations to staff their peak hours. For example, the bank that expects its heaviest clientele between 10 am and 2 pm may bring in part time tellers for those four hours. Part time employees may also be involved in job sharing, in which two employees split one full time job.

Temporary employees:

Temporary employees, like part timers, are generally employed during peak production periods. Temporary workers also fill in for employees who are off work for an extended period of time. For example a secretarial position may be filled by a temp while the secretary is off work for an extended period of time. For example, a secretarial position may be filled by a temp while the secretary is off work during her 12 week unpaid leave of absence for the birth of her daughter. Temporary workers create a fixed cost to an employer for labor used during a specified period.

Contract workers:

Contract workers, subcontractors and consultants are hired by organizations to work on specific projects. These workers, typically very skilled perform certain duties for an organization. Often their fee is set in the contract and is paid when the organization receives particular deliverables. Organizations use contract and is paid when the organization receives particular deliverables. Organizations use contract workers because their labor cost is fixed, and they do not incur any of the costs associated with a full time employee population. In addition some contract arrangements may exist because the contractor can provide virtually the same good or service in a more efficient manner than could a permanent employee.

Hiring contingent workers can be a blessing for both organizations and individuals. Contingent workers provide employers with a rich set of diverse skills as and when needed basis. In addition, hiring precisely when the specific work is to begin is cost effective. Moreover, individuals who desire to work less than full time are also given the opportunity to keep their skills sharp. At the same time, being contingent workers permits them to balance their commitment to personal matters and their careers. Many of the blessings for individuals, however, revolve around the central assumption that an individual chooses to be a contingent worker. Unfortunately, such an assumption is not always valid. Jobs in the global village have shifted in terms of requisite skills and locations, and trend is expected to continue. Consequently, the involuntary contingent workforce is expected to grow in the years ahead.

Being part of the contingent workforce, even if not by choice, might not be so bad if employees receive benefits typically offered to full time core employees. Although hourly rates sometimes are higher for the contingent workers, these individuals have to pay themselves for the benefits that organizations typically provide to their full time permanent employees. For instance, as a contract worker, you are required to pay all of your Social premiums. For core and some part time employees, the employee and the employer share in this tax so some of that extra hourly rate of the contingent worker is taken away as an expense. Added to Social Security are such things as paying for one’s health insurance through an organization that receives group rates is generally cheaper than having to buy the insurance yourself. Another expense for the contingent worker is having to pay for one’s office supplies and equipment. As for time off with pay benefits, forget about it. Vacation, holidays, sick leave? It’s simple. Take all you want. But remember, when you don’t work, you don’t get paid.

Nearly two decades ago there were 619,000 temporary jobs in the United States. Today that number is over 14 million. Similar trends have also been witnessed in Europe and Asia. How do employees feel about growth in temporary work? Even though some employees appear to prefer the flexibility their contingent status affords them, it’s probably accurate to say that the majority of the workforce prefers permanent, full time employment. But in a world of rapid change, permanent employees sometimes limit management’s flexibility. A large permanent workforce, for example, restricts management’s options and raises costs for firms that suffer the ups and downs of market cycles. So we can expect employers to increasingly rely on temporaries to fill new and vacated positions.

Do you believe organizations that hire contingent workers who would rather have permanent employment are exploiting them? Should organizations be legally required to provide some basic level of benefits such as health insurance, vacation, sick leave and retirement to contingent workers?

Organizations facing a rapidly changing environment must be in a position to adjust rapidly to those changes. Having a large number of permanent full time employees limits management’s ability to react. For example an organization that faces significantly, decreased revenues during an economic downturn may have to cut staff. Deciding who is to be laid off and what effect the layoffs will have on productivity and on the rest of the organization will be extremely complex in organizations that have a large permanent workforce. On the other hand, organizations that rely heavily on contingent workers will have greater flexibility because workers can be easily added or eliminated as needed. In addition, staffing shortages, opportunities to capitalize on new markets, obtaining someone who possesses a special skill for a particular project, and the like all point to a need for the organization to be able to rapidly adjust its staffing level.