Growth in Contingent Workforce
In the past, temporary workers were used for vacation relief, maternity leave, or workload peaks. Today “contingent workerS” (temporary workers,independent contractors, leased employees, and part-timers) represent more than 20% of the workforce. Many employers operate with a core group of regular employees with critical skills and then expand and contract the workforce through the use of contingent workers,
This practice requires determining staffing needs and deciding in advance which employees or positions should form the “core” and which should be more fluid. At one large firm, about 10% of the workforce is contingent now. The company sees using contingent employees as a way to stabilize the workforce. Instead of hiring regular workers when work loads increase and then terminating them when the work load decreases, the company relies more on temporary workers and independent contractors. Productivity is measured as output per hour. Thus, if employees are paid only when they are working (as contingents are), overall productivity often increases.’?
The use of contingent workers has grown for many different reasons. During the 1970s and 1980s, courts made it more difficult for employers to fire regular workers, so employers hired more temps. Ironically, attempts to protect workers led to jobs that offered less security and often lower pay. II Another reason for Use of contingent workers is’ the possible reduced legal liability for employers. As more and more employment-related lawsuits are filed, some employers have become more wary about adding regular employees: Instead, by using contract workers supplied by others, employers face fewer employment legal issues regarding selection, discrimination, benefits, discipline, and termination.