A significant shift in the way companies are hiring their workforce is currently taking place. Businesses are moving away from an office full of traditional full-time employees and a significant growth in contingent workers has been seen across almost all industries.

So what is a contingent worker? The contingent workforce is made up of freelancers, independent contractors, consultants and pretty much anyone who is employed by your company on a non-permanent basis. These are workers who have been hired to complete a specific project.

As many as 40 percent of the US workforce is considered contingent, according to The Bureau of Labor Statistics. This figure is expected to rise to 50 percent by 2020, with experts believing the ‘gig economy’ will only continue to grow over the coming years.

The benefits for an employer hiring a contingent workforce can be great, but companies must find a way to successfully manage this new aspect of their business. As your contingent workforce grows, the more difficult it becomes to manage. Contingent workers will be on different contracts, different pay rates and different pay schedules.

However, before a business even gets to that step, there are a few things they need to consider before putting their brand-new contingent workforce into place.

1 - Identify where a contingent workforce is needed

A contingent workforce will offer various benefits to your company, but this doesn’t mean you should transform your entire workforce on a non-permanent basis. The first step to hiring a contingent workforce is to look at your overall workforce and identify the positions and departments that could be better suited to the use of contingent workers.

Perhaps there is a department that needs the help of specific expertise to get over a temporary hurdle, maybe your business is seasonal and you need an extra pair of hands for a defined period of time, or you just want to send specific projects to freelancers to free up your employers for other tasks.

Planning beforehand is essential to your business, no matter which gap within your business you are looking to fill. This will ease your transition towards using a contingent workforce and will allow you to determine how this fits into your future growth plans.

2 - Know what your contingent workforce is capable of

Contingent workers are self-employed and therefore function as their own business. Knowing what these workers are capable of and their time constraints will help you to successfully manage different projects and different workers. It’s possible some of these workers, especially freelancers, will be working for multiple companies at the same time. They are essentially self-employed and there’s no real way of controlling where and how their work is done.

Knowing what both your internal and non-permanent workers are capable of will help you to save money and delegate tasks, and will prevent you from hiring excess contingent employees. As your business grows so will your contingent workforce, but understanding how to implement your first few non-permanent employees is the key to success.

3 - Establish a management process

Once you have identified your need for a contingent workforce and where they can slot into your business, there are significant benefits. From low cost, specialized skills and increased flexibility, your business has a lot to gain, but how can you effectively manage this wider range of employees? Business will need to create a clear management process, and optimizing that process can yield substantial opportunities.

A clear process will significantly enhance your management efforts and cut costs in the process. This plan will help you to organize all aspects of your talent pool, from onboarding and offboarding, distinguishing between permanent and contingent workers, as well as tracking performance and cost metrics.

4 - Automate your process

Technology has advanced in recent years, and taking advantage of automation will significantly help this management process. Organizing your contingent workers is complex and time confusing, and without the use of technology it is almost virtually impossible to avoid making mistakes. The extra work required could overwhelm a procurement or HR department.

Technology is the core of any successful contingent workforce management program. Automation can be used on anything from resume scanning, providing a database for company documents and tracking which employee is working on which project. It provides your business with what’s needed from the start to finish of a contingent worker’s engagement - from their acquisition, management and their payment. Keeping up to date with new software will help streamline your business.

It can seem daunting at first, but hiring a contingent workforce could be what your business needs, allowing your full-time employees to work more efficiently. Making the most of recent innovations in technology and management services will make managing your contingent workforce that much easier.

HCMWorks are experts in contingent workforce management and advisory. Contact us to discuss your unique contingent needs and hear more about our best-in-class solutions.