The benefits of a contingent workforce during a pandemic

Try, if you can, to take your mind back to life before any form of ‘lockdown’. Organisations globally were taking on increasing numbers of contingent workers. Their broad-based value meant demand for contingent workers was consistently gaining momentum, and across most industries.

And now, during this ongoing pandemic, we’re seeing more organisations engaging contingent workers. For some, this is a new strategy. For many, it’s a continued workforce approach, which started pre-COVID. For most, engaging a contingent workforce during a pandemic is becoming a means to better meet business objectives during these critically uncertain times.

That’s not to say a shift in your workforce strategy is any easier or less complex during this time. In fact, it’s likely harder to move your strategic approach to talent given the tenuous nature of things right now.

I have a question for you to ponder: is it really possible to attain sustainable benefit to your organisation during this global pandemic, through a shift in workforce strategy?

A recent study from SIA stated that over 80% of executives reported an increase in usage of contingent labour and that this rise was ongoing during the COVID pandemic.

So… where’s the value?

Why are organisations continuing this shift to more contingent labour in their talent mix?

What’s in it for them?

Today, I’ve provided the major benefits to your organisation from having a contingent workforce during a pandemic.

Perhaps you’re about to embark upon a strategy of multiple worker types in your business.

Perhaps you’re already working with contingent labour, but you’re not realising the full benefit from their engagement.

Perhaps your business needs a refresh on your workforce strategy approach.

Either way, these benefits are here to be taken by your business during what is a difficult, and uncertain time for most of us.

Keep in mind, these benefits stand true both during regular life (no COVID) and now. The opportunity right now though, is that having a contingent workforce during a pandemic could actually be beneficially game-changing for your organisation. Here’s why.

1. Cost Savings

One of the greatest benefits of a contingent workforce in your talent mix is the opportunity to reap significant cost savings.

The obvious savings include:

  • No statutory benefits paid to contingent workers (like superannuation, leave entitlements, overtime)
  • Payroll and other taxes that apply to full-time workers, don’t apply to contingent labour, so it’s potentially a great time to rework your cost base when it comes to labour
  • Engaging contingent labour can reduce operating talent costs. This, in turn, could lead to crucial cost savings as your business starts to recover from the financial losses of the pandemic

As we stated recently, it’s critical to remember this, as our economies start to recover….

It’s critical to evaluate the ‘true productivity’ of your contingent workers to understand the material contingent workforce cost savings. This is the output of goods and services produced per hour by these workers, divided by the input, which is the cost of employment per hours worked.

2. Flexibility of a contingent workforce during a pandemic

Let’s face it, the ability for organisations to forecast and prepare their supply chain for customer demand is almost zero at the moment. How then can they staff their operations accurately?

With contingent workers, that’s how.

The immediate availability and innate flexibility of these workers mean you’re able to scale up and down based on customer demand and, for many organisations, the lifting of government restrictions.

And with the fixed cost structure and limited tenure associated with these workers, you’re able to place a finite expenditure on re-establishing your business once the pandemic subsides.

The other huge benefit from the flexible nature of contingent workers is your ability to introduce specialist skills when and as your business needs it. And, for a timeframe suited specifically to your organisation, as the long road to recovery commences. If your business has specific projects underway, or can restart project activity, the contingent workforce will provide the much-needed flex during your commercial recovery.

3. Planning for the future with a contingent workforce

Think about the cost to your business of a potentially bad hire. In the US, the agreed average cost of poor hiring can reach up to 30% of the worker’s first year of earnings.

Under normal circumstances – that is, no COVID – this is a tough cost to bear, for any organisation.

But during a pandemic?

This type of cost can be hugely detrimental, if not fatal in the current tenuous commercial environment.

This is where contingent workers can offer multiple benefits to your organisation.

With multiple contingent workers in your organisation, you can take an accurate pulse on those workers who are actively engaged in the business and those who are not. From here, it’s a simple process of nurturing their involvement with a view to a full-time role.

You can maintain a higher percentage of contingent workers during a pandemic, with a view to sustaining this segment of your workforce, after the COVID dust has settled. In this way, you’re able to enjoy an already established contingent workforce, which you can scale up as your business regains momentum.

4. Establish a meritocracy across your workforce

As many of you are still working from home either full-time or part-time, your business has no doubt undertaken to better engage and manage people from a distance. And that’s all categories of people both contingent and permanent labour.

This will better suit some workers, more than others.

The value contingent workers offer your business in this scenario, is their familiarity with distance working, or working from home. Oftentimes, prior to the global pandemic, this has been the very nature of working with contingent labour. Hence, engaging a contingent workforce during a pandemic enables you to really establish a level playing field when it comes to worker merit and achieving KPI’s.

Are your employees up to the standard of the contingent workers?

Are they as flexible, adaptable, and capable of delivering on your business needs as your contingent workers?

The insights you can glean from assessing your entire workforce under these circumstances will be telling. You’ll be in a better position to assist employees if and when they need it. And, you will be well placed to see the fit and output from your contingent labour.

These are not easy times for our economy here in Australia. We’re seeing increasing worker layoffs, industry downturns and a probable recession. However, if you’re able to rework your existing structure to reduce your cost base, and attain sought-after flexibility during uncertainty, contingent workers may well be a valuable solution, right now.


As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you would like to find out more about how we can help please contact us here.