Contingent and Temporary Workers
A final contemporary HR issue of note involves the use of contingent or temporary
workers. Indeed, recent years have seen an explosion in the use of such workers by orga-
nizations. The FBI, for example, routinely employs a cadre of retired agents in various
temporary jobs.
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Trends in Contingent and Temporary Employment
In recent years, the number
of contingent workers in the workforce has increased dramatically. A contingent worker
is a person who works for an organization on something other than a permanent or full-
time basis. Categories of contingent workers include independent contractors, on-call
workers, temporary employees (usually hired through outside agencies), and contract
and leased employees. Another category is part-time workers. The financial services
giant Citigroup, for example, makes extensive use of part-time sales agents to pursue
new clients. Roughly 1 in every 50 employed Americans held a temporary or contingent
position in 2011.
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Managing Contingent and Temporary Workers
Given the widespread use of
contingent and temporary workers, HR managers must understand how to use such
employees most effectively. In other words, they need to understand how to manage
contingent and temporary workers. One key is careful planning. Even though one of
the presumed benefits of using contingent workers is flexibility, it is still important to
integrate such workers in a coordinated fashion. Rather than having to call in workers
sporadically and with no prior notice, organizations try to bring in specified numbers
of workers for well-defined periods of time. The ability to do so comes from careful
planning.
A second key is understanding contingent workers and acknowledging both their
advantages and their disadvantages. In other words, the organization must recognize
what it can and cannot achieve from the use of contingent and temporary workers.
Expecting too much from such workers, for example, is a mistake that managers
should avoid. Third, managers must carefully assess the real cost of using contingent
workers. We noted earlier, for example, that many firms adopt this course of
action to save labor costs. The organization should be able to document precisely its
labor-cost savings. How much would it be paying people in wages and benefits if
they were on permanent staff? How does this cost compare with the amount spent
on contingent workers? This difference, however, could be misleading. We also
noted, for instance, that contingent workers might be less effective performers than
permanent and full-time employees. Comparing employee for employee on a direct-
cost basis, therefore, is not necessarily valid. Organizations must learn to adjust the
direct differences in labor costs to account for differences in productivity and
performance.
Finally, managers must fully understand their own strategies and decide in
advance how they intend to manage temporary workers, specifically focusing on
how to integrate them into the organization. On a very simplistic level, for example,
an organization with a large contingent workforce must make some decisions
about the treatment of contingent workers relative to the treatment of permanent,
full-time workers. Should contingent workers be invited to the company holiday
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