Hiring Contingent Workers – What You Should Consider
According to the Macquarie Dictionary, ‘contingent’ refers to one thing that is dependent for its existence on another thing that is not yet certain. That it’s conditional. When we consider the concept in terms of employment, it is clear that a contingent workforce consists of employees who rely on the existence of a task to maintain their employment. The term is growing in popularity in Australia and around the world, and refers to temporary employees such as temporary workers, contractors or freelancers who undertake short-term contracts.
When taking into consideration recent global events and the ongoing economic disruptions in Australia and around the world, employers may jump at the idea of hiring an employee for a fixed, short-term period. But as with anything, there are advantages and disadvantages to be considered. The following key points will allow any business considering a contingent workforce to commence their research into the model.
- Financial reasons – a clear-cut argument for contingent workers is only hiring those for whom work is available and funds are secured. Offering contracts or agreements that relate to a specific job, project or timeline guarantees your business will be able to easily shed employees once the work is be completed. This allows businesses to plan financially and strategically.
- Skills and experience – the ability to hire a contingent worker with particular skills, knowledge and experience to complete a specific job or project enables your business to be flexible and adaptable to market and industry needs. In some instances, you may have a ‘repeat’ contingent worker, who is employed again and again to complete a particular skilled task on a semi-regular basis. Where funds and timing permit you may take even further advantage by requesting a contingent worker to assist in upskilling your existing workforce.
- Work culture – despite a pleasant pay packet, contingent workers are often (due to the nature of their work) separated from other employees. This can result in a lack of engagement or motivation, and poor performance. Contingent workers may feel a cultural division exists between them and the ‘employees’, which can lead to a lack of loyalty to the company and the possibility of a project left half-finished.
- Employment relations risks – industrial and employment relations can be a murky part of human resource management. Legislation, awards, entitlements, contracts and policies; the Australian Government provides advice and information to employers regarding the various facets of employment law, but it can still be challenging for businesses to remain up to date on the current status. As contingent workforces become more popular, Government is likely to make changes to protect this workforce. Inaction in the wake of government policy and legislation changes surrounding could result in costly fines for your business.
- Financial reasons – although a clear advantage, contingent workers may also present a financial disadvantage. Contingent workers who have skills that are critical for your business success, can be a costly addition to a project or task. There is also the risk of similarly skilled employees becoming disgruntled at differences in pay scales.
It is evident that the contingent workforce is here to stay. As a business owner and operator, there are plenty of opportunities for you to engage casual employees or short-term contractors with the right skills and experience to meet your business needs; however, a clear and concise analysis of your business needs will help to ensure the advantages outweigh the disadvantages.