The job market has undergone significant changes over the past two years. In 2020, the employment rate soared from 4% to 14.7%. According to reports by the Bureau of Labor Statistics and University of Minnesota, roughly 20.6 million Americans lost their jobs. Some businesses switched gear by leveraging contract workers, filling cracks in the foundation without bearing the expense of a full-time employee. Contract workers provided much needed flexibility and access to a diverse set of skills and alternative employment conditions.
The changing employment landscape resulted in a growing contract workforce, platform-based hiring methods, an increasing number of highly skilled contract workers, a changing legal landscape, and more contract-to-hire employment strategies. The pandemic forced a shift in the way we work, and it is not changing any time soon.
Platform-Based Contract Work Sourcing
The majority of contract workers offer their services on various platforms.. Platform-based hiring methods for contract work mean no piles of printed resumes, no multiple rounds of interviews, and no onboarding, ultimately leading to lower talent acquisition costs when compared to permanent employees. Because they are cost-effective and user-friendly, hiring platforms for contract workers and freelancers are likely here to stay.
Popular contract work platforms include:
The Skilled Contract Work Supply
2021 experienced a surge in skilled and experienced professionals seeking contract positions. These positions include IT Analysts, Data Analysts, Data Engineers, Specialty Trade Construction, Mechanical Engineers, Marketing Managers, Graphic Designers, and Clinical Pharmacists. While this trend is not necessarily new, it is likely to stay for the foreseeable future as the life/work balance provided by this type of work arrangement becomes more popular. This is beneficial for employers as access to quality talent is available without hiring them as an employee and paying a salary.
Changing Legal Landscape
As the employment landscape changes, so does the legal landscape. The passing of California’s Prop 22, which classified gig economy workers as contract workers, indicates that legislatures are catching up to the trend. The increase in temporary or alternative employment methods required new legislation regarding the classification and rights of workers. This is reflected in the revision of the Fair Labor Standards Act (FLSA).
On January 6th, the Department of Labor amended the FLSA to clarify the standards of classification which differentiate a contract worker from an employee. These differentiating factors include type of work, a worker’s control over how they perform their tasks, level of skill required for the job, company integration, and potential permanence of the worker. The revised aspects of the FLSA are scheduled to go into effect as of May 7, 2021. As contract work becomes an increasingly desirable method of employment, future changes to legislation are to be expected.
During the pandemic, many individuals applied for contract work with the hopes of becoming permanently hired after their expiration. This employment strategy is known as “contract-to-hire.” As the economy begins to open up and business experience increases in revenue, the likelihood of being hired after completing a contract position increases. The contract-to-hire strategy is desirable to both employers and potential employees as both parties are able to evaluate whether the individual is a good fit for the company culture without fully committing.
Occupations projected to experience an increase in contract-to-hire strategies include accounting, project management, marketing associates, sales, IT, as well as any of the aforementioned highly skilled contractor positions. The ability to get one’s foot in the door with contract work to showcase skill and network for potential employment is an opportunity not likely to be abandoned in the near future.
Managing Contingent Workers
Contingent workers seek work on various platforms, abide by different regulatory standards, and present a certain level of risk. Because of this complexity, utilizing a contingent workforce management solution is increasingly necessary in the future of contract work. HCMWorks is a vendor-neutral managed service provider (MSP), which assists companies in talent acquisition, talent pool management, advising, and payment. To find out how HCMWorks best fits your future contract work management needs, visit our website.