In recent years, many organizations have tapped into the contingent workforce, but the future of such work arrangements is uncertain. Organizations want to know, “How important will the contingent workforce be over the long-term?” and, “If it is here to stay, how should we efficiently and effectively source contingent workers?”
To gain a better understanding about how organizations acquire and manage the contingent workforce, a survey was conducted to investigate a range of issues including:
- how widespread the contingent workforce is today
- why organizations are using contingent employees
- whether organizations are managing their contingent workforces well
- the common sources of contingent workers
- the practices that seem most closely associated with success
Major Finding One: The contingent workforce is widespread, with the vast majority of organizations using contingent workers for some portion of their workforce.
In 47% of organizations, contingent workers make up just 1% to 19% workforces, but some firms are “power users” of such employees, with 22% of firms saying contingent workers make up more than 50% of their workforces.
- Just 9% of organizations don’t use contingent workers at all.
- About half of HR professionals say the percentage of contingent workers in their organizations has grown over the last three years, while only 11% say it has shrunk; the rest suggest it has stayed the same.
- Roughly half expect the size of their contingent workforce to increase over the next three years.
Major Finding Two: Organizations recruit contingent workers for a number of reasons:
- reduce cost (42%)
- boost skill levels when needed (37%)
- maintain a nimble business model (35%)
- increase agility (35%)
- vet potential full-time employees (27%)
- increase speed of hiring (23%)
Major Finding Three: More than two-fifths struggle to acquire and manage contingent workers well, though they struggle with some types more than others. Among organizations that acquire and manage such employees:
- Half say they are good or excellent at managing consultants, freelancers, and independent contractors.
- Only 43% say they are good or excellent at managing temporary workers from staffing agencies.
Major Finding Four: HR is most likely to be involved in hiring and/or contracting with contingent workers, but line of business managers are close behind.
- Thirty-two percent say their HR department (including the talent acquisition function) is involved in the hiring and/or contracting process to a very high degree.
- Twenty-four percent say their lines of business are involved to that same degree.
- By comparison, only 5% say their procurement departments are involved to a very high degree.
Major Finding Five: Staffing and temp agencies are most likely to be sourced for acquiring contingent workers.
- 45% use staffing firms
- 39% use temp agencies
- 34% use recruitment process outsourcing agencies
- 25% use online talent/freelancing platforms
Major Finding Six: Cost and quality are the most important criteria organizations consider when choosing a source that provides access to contingent workers.
- About three-fifths select a contingent source based on rates and fees (59%).
- Nearly as many select based on quality of personnel (57%).
- The third most widely cited selection criterion is industry specialization (45%), followed by ease of use (40%).
Major Finding Seven: Organizations that are good or excellent at acquiring and managing contingent workers are also more likely than others to take specific actions. In particular, they are more likely to:
- use contingent workers to garner skills or maintain a nimble business model
- involve HR to a higher degree in the hiring of contingent workers
- use online talent/freelancer platforms
- get useful data and analytics from their top sourcing providers
- think technologies for assessing contingent workers will grow in importance in the future
CXC are proud to be part HR.com’s advisory board and to share the information provided from HR.com’s Research Institute from the State of the Free Agent Nation and the Contingent Workforce 2020 Survey. Visit HR.com for more reports and infograhpics.
Contact one of our specialist at CXC Global to discuss your contingent workforce needs. We’ve been in business for 28+ years with solutions in over 70 countries and have helped businesses in multiple industries to implement compliant contingent workforce solutions, including full onboarding, vetting, background checks, right to work, global payroll, centralized invoicing and ongoing management. Our proprietary compliance platform CXCComply enables a smooth and faster time to fill solution for hiring managers.