3 Benefits of Contingent Labour for Your Business

First, Let’s clear up a few things…

What’s the big deal with Contingent Labour?

And I pose this question representing Australia’s longest-standing provider of contingent labour management services. CXC have built a business around the corporate world taking on contingent labour.

So why ask this question? Isn’t it counter-intuitive? Actually, no.

But first, let me clearly define ‘contingent labour’ – this is talent brought into organisations on a contract, short-term or on-demand basis. A contingent worker can be any of the following categories of workers: freelance, independent contractor, statement-of-work, temporary workers, independent consultant. Basically, any worker not on the payroll as they’re not full-time employees.

The term ‘Contingent Labour’ has become potentially one of the more confusing in the talent and HR industry.

Yet it’s a category of labour that, particularly larger organisations increasingly rely upon to achieve business goals, and put simply, ‘get work done’.

And yet, we’re hearing from more and more people across a multitude of industries, raise concern, confusion and a multitude of questions about this category of worker.


Because the workforce is changing. If you didn’t realise this already, you need to keep reading. The composition of the workforce is becoming increasingly diverse: no longer are full-time employees expected to be the norm.

And generationally, worker needs are changing. For example, Gen Y and Z aren’t looking for the typical work life of the majority of Gen X’ers and Baby Boomers – i.e. one career, maybe a couple of employers. More so, they see ‘work’ as being an opportunity for multiple careers, simultaneous contracts, and unique experiences whilst maintaining what’s important to them in ‘life’ (less financial incentive, more balance).

And demographically, things are changing too. We’re living longer. Working longer. Learning more. Skills are the latest currency.

Underpinning all these changes, contingent labour is proving a boon for dynamic, adaptable organisations. And they’re quietly taking a competitive advantage.

Of the many advantages forward thinking organisations enjoy from contingent labour, there are three I think you should be aware of. Read on…


The whole ‘war for talent’ – which our HR friends will remember as a ubiquitous term in the noughties – was a real issue for organisations back then: the inability to fill FTE roles with talent possessing the right skills, ‘fit’ and cost profile. Today, the war for talent can be better stated as the ‘war for skills’.

You see, if your organisation is willing to be flexible and open to the opportunities of this changing workforce dynamic, where contingent labour plays a key role, you’ll be best placed to access the skills your business needs – and this next bit is important – when your business needs it.

With access to on-demand, sought-after skills, organisations have a real opportunity to bring in highly specialised, experienced talent, to deliver business objectives – talent that may otherwise be a) unavailable (because they’re employed FTE elsewhere) and/or b) be out of their price range.

Specialist contingent labour, in this context, provides a massive opportunity for organisations: not only to more efficiently achieve business goals, but to bring in quality, specialist people, on a project basis, that they otherwise couldn’t afford or wouldn’t consider.

In today’s workplace, THIS is how competitive advantage is acquired.


Which brings us to our next point. By engaging these workers on a project-by-project basis your business doesn’t experience wastage from having highly skilled, highly paid talent on your payroll. If you can work your talent pool strategically, your business will access these contingent workers, when and as you need them.

Additionally, contingent labour offer a less arduous hiring process, and a faster speed-to-work ratio – meaning you get greater bang for your hiring buck, and sooner. If the profile and technical brief of the labour you require is specific and accurate, your HR team and hiring managers can quickly tap into available contingent labour, who, by the very nature of their working style, can be available at short notice.

And although contingent labour largely operate on a higher hourly or daily pay scale to FTEs, your savings elsewhere are many. These include:

  • Reduced HR fixed costs (like recruitment, leave entitlements)
  • Lower employee headcount
  • No additional statutory obligations (like superannuation, insurances, payroll tax)
  • No ongoing remuneration requirements, when the business demand for those specialist skills may fluctuate
  • Less non-wage costs (such as onboarding, professional development)


You’re not alone if you’ve felt that your organisation is incapable of responding quickly and commercially to a shift in market demands, or an internal change requiring more (or less) labour. This is such a common pain point for many a hiring manager or HR professional.

By setting up a quality pool of contingent labour, your organisation can tap into a known source of specialist, expert talent, as the market and your business, demands.

Say for example, your business launches a new product or service, and the market response is positive. Or, in these somewhat unstable economic times, say your business suffers a blow from the market. Being able to upscale or downscale your workforce to meet these shifts in commercial or market conditions, without the long delay of FTE hiring or burden of a heavy payroll, places you in an enviable and commercially stable position.

Responding to organisational needs and market fluctuations with contingent labour protects you from over-spend, the lost productivity of lengthy hiring processes and keeps your balance sheet stable.

In summary

As you have likely gathered, each of the benefits of engaging contingent workers, don’t operate in isolation. The knock-on effects of one, play out for the others with the potential to place you in a position of competitive advantage.

One more additional thing to consider: if your business is looking to engage contingent labour, think about your existing HR analytics and how you can use these as grassroots measures for your contingent talent pool, from the outset. Data such as pay scale, time-to-productivity, sourcing fees, ROI or revenue per hire. Taking a ‘data’ mindset will give you incredible insights to better engage, manage, and achieve ultimate ROI from your investment in contingent labour, both in the short-term and into the future.

Let me know what you think of our assessment of contingent labour benefits. Either in the form below, or here.