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GLOSSARY

Contingent
Workforce Glossary

One solution to source, engage and manage all of your contractors & suppliers.

Contingent Worker

A contingent worker is a professional who works on a temporary or contractual basis without being a permanent employee of a company. Typically, they engage in specific projects, tasks, or time periods, either independently or through staffing agencies.

What is a contingent worker?

A contingent worker is an individual who provides services to a company on a non-permanent basis, often under a contractual or freelance arrangement. Unlike full-time employees, companies hire contingent workers for specific tasks, projects, or periods.

With the rise of the gig economy and technological advancements, the use of contingent workers has grown significantly across various industries, including IT, healthcare, marketing, and finance. Organisations appreciate the flexibility, expertise, and cost-effectiveness that contingent workers bring to their operations.

What are the differences between contingent workers and traditional employees?

While both contingent workers and traditional employees contribute to an organisation’s success, they differ in several ways, including:

  • Employment status: Traditional employees have a long-term commitment to the company, while contingent workers are hired for specific assignments.
  • Benefits and compensation: Full-time employees typically receive benefits like health insurance, paid leave, and retirement plans, whereas contingent workers do not usually qualify for these benefits.
  • Work arrangement: Traditional employees work under an employer’s direct supervision, whereas contingent workers have more autonomy in how they complete their tasks.
  • Legal classification: Contingent workers are classified differently in labour laws, often as independent contractors, freelancers, or temporary staff, which impacts taxation and compliance requirements.

The importance of correct worker classification.

Understanding the difference between contingent workers and traditional employees is crucial for businesses to avoid worker misclassification. Misclassifying employees as contingent workers can lead to legal, financial, and reputational risks.

For example, in the U.K., the IR35 tax legislation governs off-payroll working rules, ensuring that independent contractors pay the correct tax contributions. On the other hand, the Fair Work Ombudsman in Australia defines independent contractors separately from employees, and misclassification can result in penalties under the Fair Work Act.

Businesses found guilty of misclassification may suffer reputational harm, leading to loss of trust among employees and clients.

Types of contingent workers

Contingent workers come in different forms based on their work arrangements and roles. The main types include:

Freelancers
Freelancers are self-employed individuals who offer services to multiple clients without a long-term contract. They set their rates, choose their projects, and often work remotely. Common freelancer professions include graphic designers, writers, developers, and marketers.

Independent contractors
Independent contractors are professionals who enter contractual agreements with companies to provide specific services. Unlike freelancers, they might work exclusively for one company at a time but are still considered self-employed. Examples include IT consultants, legal advisors, and accountants.

Temporary workers
Temporary workers (temps) are hired for a short duration, typically through staffing agencies, to fill in for absent employees, handle seasonal workloads, or support special projects. They work under employer supervision but do not receive the same benefits as full-time employees. Common temp roles include administrative assistants, customer service representatives, and warehouse staff.

Consultants
Consultants are experts in a particular field who offer advice and strategic guidance to businesses. They work on a project basis and bring specialised knowledge to help organisations solve problems, improve processes, or implement new systems. Consultants are prevalent in industries like management, finance, and IT.

Benefits of hiring contingent workers

Many businesses incorporate contingent workers into their workforce strategy because of the following advantages:

Flexibility in scaling your workforce

Contingent workers allow companies to scale their workforce up or down based on project demands. This flexibility is particularly useful for businesses with fluctuating workloads or seasonal peaks.

Whether your company experiences a temporary increase in demand, requires additional staff for a short-term project, or needs to fill gaps left by full-time employees, contingent workers provide an efficient solution. Companies can hire talent as needed without long-term financial commitments, ensuring operational efficiency and cost-effectiveness.

Access to specialised skills

Hiring contingent workers enables organisations to access niche expertise that may not be available in-house. This is beneficial for projects requiring technical knowledge, creative skills, or industry-specific experience.

Many contingent workers are specialists in their fields, bringing years of experience and a fresh perspective to projects. Businesses that need expertise in areas such as digital marketing, software development, legal consulting, or financial analysis can benefit from hiring these professionals without the need for extensive training or onboarding.

Cost savings

Since contingent workers are not full-time employees, companies can save on costs associated with benefits, training, and long-term salaries. This makes hiring contingent workers a cost-effective solution for budget-conscious businesses. Without the financial burden of health benefits, retirement plans, or paid leave, organisations can allocate their budget toward growth initiatives and operational improvements. Additionally, hiring contingent workers reduces expenses related to recruitment, training, and administrative overhead, making it a viable strategy for businesses of all sizes.

Adaptability to market changes

In a fast-changing business environment, contingent workers help organisations quickly respond to market shifts, new opportunities, or unforeseen challenges without the commitment of permanent hires.

Companies facing industry disruptions, economic downturns, or shifts in consumer demand can leverage contingent workers to remain agile. This adaptability is particularly important in industries such as technology, healthcare, and e-commerce, where innovation and responsiveness are key to staying competitive. Contingent workers provide a dynamic workforce solution, allowing businesses to pivot as needed without incurring unnecessary risks.

Challenges engaging with contingent workers

While there are numerous benefits to hiring contingent workers, businesses must also navigate certain challenges, such as:

Management and integration difficulties

Managing contingent workers alongside full-time employees can be challenging. Companies should implement structured onboarding processes, provide access to collaboration tools, and ensure regular check-ins to promote teamwork and inclusion.

Legal and compliance issues

Misclassifying workers can lead to legal issues, fines, and penalties. Companies should consult legal experts, stay updated on labour laws, and properly classify workers based on their employment status to mitigate risks.

Due to the complexities involved in managing a contingent workforce, more and more companies now work with workforce solution providers, such as CXC, to streamline the process. These providers assist in ensuring compliance, handling onboarding, managing payroll, and monitoring performance. Leveraging these services helps organisations reduce administrative burdens and focus on their core operations while maintaining an efficient and legally compliant contingent workforce.

Best practices for engaging contingent workers

To maximise the benefits and mitigate the challenges of hiring contingent workers, companies should follow these best practices:

Clearly define scope and expectations

When hiring contingent workers, businesses should provide detailed contracts outlining project scope, deadlines, deliverables, and payment terms to avoid misunderstandings.

Clear agreements help both parties align their expectations, ensuring that contingent workers understand their responsibilities and performance metrics from the start. Regular updates and check-ins further help to keep projects on track and address any issues that may arise during the contract period.

Ensure proper worker classification

Companies must correctly classify contingent workers as independent contractors, freelancers, or temporary staff to comply with legal and tax regulations. Misclassification can result in legal disputes and financial penalties.

To ensure compliance, businesses should consult legal and HR experts, such as CXC, to establish clear worker categories and maintain accurate documentation.

Develop an effective onboarding process

Even though contingent workers are temporary, onboarding them properly can enhance their productivity. Providing access to necessary tools, company guidelines, and project expectations ensures a smoother workflow.

Companies should also integrate contingent workers into their communication channels and workplace culture to encourage collaboration with full-time staff. A structured onboarding process that includes orientation, knowledge-sharing, and resource access can significantly improve engagement and work efficiency.

Establish strong communication channels

To maintain alignment and efficiency, businesses should set up clear communication channels for contingent workers, such as scheduled check-ins, project management tools, and dedicated points of contact.

Regular communication helps contingent workers stay informed and feel connected to the broader organisation, reducing the risk of misalignment and inefficiencies. Leveraging digital collaboration platforms like Slack, Trello, or Asana can streamline workflows and ensure that contingent workers remain in sync with company goals.

Easily hire and manage contingent workers with CXC

Contingent workers are essential to modern companies, offering flexibility, specialised skills, and cost savings to fuel growth. However, managing them can come with challenges, from compliance to seamless integration, which can be overwhelming for your HR teams. Fortunately, you don’t have to manage it alone.

With CXC as your partner, we take care of every aspect of engaging with contingent workers, from sourcing and onboarding to offboarding. This allows you to focus on what matters most: growing your business. Speak to our team today.

How we can help?


Finding and hiring talent can be challenging, costly, and time-consuming. However, with CXC as your flexible staffing partner, this doesn’t have to be the case.

With more than 30 years of experience in the contingent workforce space, our team of experts is here to guide you every step of the recruitment process. Whether you need temporary staffing or remote workers, we have tailored workforce solutions that can fit your specific needs.

This way, you don’t have to worry about compliance and administrative burden, and you can focus on what matters most: growing your business.

CXC Global