What is a Contingent Worker?
A contingent worker is someone who works for a company but isn't employed long-term. Because they are not hired on a permanent basis, contingent workers are not considered employees of a company. Contingent workers provide their services on a short-term basis, such as for a project or a one-time task. Once the project is completed, the employer is no longer obligated to provide them with ongoing work. When another task or project arises, contingent workers can be called back. Contingent workers can provide their services on-site or remotely, depending on the arrangement with the company.
Examples of contingent workers include:
- Independent Contractors
- Freelancers
- Consultants
- Temporary employees hired by a staffing agency or another third party and assigned to work for the company
How does a Contingent worker differ from an employee of a company?
The company does not hire contingent workers on a long-term basis. Their services are only required on an as-needed or per-project basis. Contingent workers do not receive benefits from the company because they are not employees. Their wages are paid in full, with no deductions, because contingent workers, not the company, are responsible for processing and paying their taxes.
Because of their job classification, contingent workers have more leeway in how they complete their tasks and use their tools, resources, and equipment. Because they are evaluated solely on the results that they deliver, the company has no direct control over how they complete the task.
Benefits of hiring Contingent Workers
Hiring contingent workers has a number of potential strategic and financial benefits. Among them are:
1. Increase flexibility
Instead of committing to adding permanent employees, organisations can adjust the size of their workforce as needs change. When a contingent worker has completed their work, employers have the option of working with them again.
2. Gain access to specialised skills
Workers can be brought in for one-time projects that require skills that the regular workforce does not have, such as designing the company's website.
3. Save on compensation
Companies are only required to pay contingent workers the agreed-upon amount for their services. They are not required to pay overtime or provide employee benefits such as healthcare coverage or paid time off.
4. Reduce training costs
Contingent workers are typically hired for advanced knowledge and skills that they already have, reducing or eliminating time to productivity.
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