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How the pandemic has impacted the contingent workforce

Covid-19 has no doubt had a huge impact on the way we work, with an increase in remote working for millions of office workers, however a trend that has greatly accelerated is the increase in need for contingent workers.

What are contingent workers?  

Contingent workers are people who work at a given business but are technically employed by a staffing company. Since the crisis began, we have seen many businesses greatly increase the proportion of their contingent workforce.

Has there been a rise in contingent workers?

When the pandemic began, many companies put all their perm activity on hold, with job offers being rescinded, and new starters for April and May were told their job was no longer there. It was a similar picture for contract roles, with the vast majority of companies putting their contractor hiring on hold and making redundancies.  Once the government announced its job retention scheme companies held back on making more redundancies and jobs were saved. However, with the unpredictability 2020 brought to businesses, and with the possibility of more unpredictability to come, it is difficult for organisations to predict their labour needs.

Using contingent workers allows businesses to ramp their workforce up or down without having to worry about letting permanent employees go if their business suffers.  Latest research shows that organisations will use contingent workers to maintain more flexibility in workforce management post Covid -19 and as much as 32% of organisations are replacing full time employees with contingent workers as a cost-saving measure.

Contingent workers can help provide specialist expertise that isn’t needed on a permanent basis, however they are key in ensuring workforce gaps are met and businesses are able to meet peak demand.

Why businesses should be open to contingent workers

As discussed, we can expect the demand for contingent workers to rise as we navigate to a new way of life in the wake of the pandemic. Organisations will look to tackle new challenges and discover new opportunities as new patterns of work and consumer behaviour emerge and businesses look for new ways to thrive.  If businesses want to be able to create new products or tap in to new markets they will quickly need to be able to access professionals with the relevant expertise, and this is where contingent workers come in.

A shift towards contingent working was already underway in a pre-pandemic world, and as we now come out the other side we will await to see what the future holds for contingent workers but it seems like they are only on the up. A survey of 800 global executives by McKinsey found that 70% expected to use more temporary workers and contractors in two years than they did before the crisis.

Predictions for the future

One positive outcome from the pandemic for the staffing industry, is that unimaginable businesses will come out of this crisis, with less regard for the cost of labour with more focus of the benefits of flexibility.

A key factor driving contingent workers is the increased flexibility it offers the workforce. Responding to a crisis requires the capability to work flexibly and move quickly. With many workers being able to work from home, companies also have access to a larger talent pool when hiring.

Contingent workers provide the ability to fill skills gaps fast while providing flexibility to organisations and reducing risk. Many organisations with large contingent workforces have been well equipped to adapt quickly to the challenges driven by the global health crisis. A thriving contingent marketplace also offers new opportunities in regions where unemployment has risen quickly, helping workers expand their experience and grow skills through temporary roles.

According to a report from human capital management software firm Ceridian, 62% of global executives believe that contingent workers will substantially replace full time employees within the next 5 years.

For more insights on this topic, Adam Craighill, our Head of Client Services – EMEA will be discussing this topic at the APSCo International Forum, on Tuesday 7th September 11.00-12.30 GMT. Sign up for a place here – https://www.apsco.org/events/in-the-frame-international-forum-2082.aspx