On-Demand

On-Demand

What Is Contingent Employment?

by

Mustafa Ali

|

July 28, 2022

In today’s on-demand economy, the terms contingent worker, agile workforce, freelancer, or contractor are commonly heard in a workplace or seen in a job posting. This terminology refers to temporary employees within the corporate world. Just like a subcontractor may be hired to complete maintenance or repairs, these temporary workforces are commonly hired to complete a specific project, which is also known as contingent work.

Businesses can hire contingent workforces at Field Engineer. We are a uniquely designed platform where organizations can find skilled freelance labor who can work on an hourly basis. With over 75,000 freelance engineers from over 200 countries across the globe, businesses have numerous options to hire highly skilled and certified technicians. Field Engineer also enables you to search for and hire remote professionals, which proves to be cost-effective for both the parties.

Contingent Worker Definition

According to the U.S. Department of Labor, contingent workers are independent contractors in a global freelance marketplace. These independent contractors, consultants, and other out-sourced, non-permanent workers are hired on a project basis and are not full-time, regular employees of a company.

Since contingent workers are not technically employees, they sign a contract agreement with an employer to carry out the specified work and then leave once the job is complete. Most contingent workers agree to work for a limited period while being compensated with an hourly wage, piecework fee, commission, or a lump sum stipulated in the contract, which can be subject to other factors or policies governed by the employer.

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The main advantage of contingent employment is flexibility. As a contingent worker, you can set your own hours and are often trusted to do your work without close supervision from your employer. Contingent employment offers flexibility to employers as well, as it makes it easier for them to adjust their workforce to account for economic or seasonal fluctuations in the marketplace.

Most contingent workers are found in IT, administration, accounting and finance, and customer service although most business areas see the need to hire contract workers. A marketing department may hire a freelance writer to help during a new product launch. Likewise, web designers may be hired on a contingent basis to redesign a website or employee intranet.

Advantages for Businesses

There are many reasons why a company would prefer contingent workers. Since contingent workers are not permanent, the workforce can rise and fall according to the workload. Hiring a contingent worker is also a tax deduction as it is considered an expense, especially if a staffing firm manages the workers (contingent workers are often hired through staffing agencies). In addition, employers do not have to pay payroll taxes, unemployment taxes, or benefits for these workers, which can save the business money.

Advantages for Workers

An individual can often achieve a better work-life balance as a contingent worker. Many positions pay well and allow for remote work and flexible hours. Additionally, because the nature of the work is temporary, the person can move from job to job without having a negative impact on their resume. It can also give someone the opportunity to work in a variety of industries and gain valuable skills that can turn into a permanent position in the future.

Employment Considerations

It is important for a business and its human resources department to correctly classify the contingent worker, even if the worker is not full time. According to guidelines by the Department of Labor, an independent contractor is different than a temporary employee. While the business does not have to offer benefits to a temporary worker, they do have to follow other employment laws that pertain to permanent employees, such as overtime pay and minimum wage.

On the other hand, an independent contractor can be paid with one lump sum at the end of the project or in equal payments and would not receive overtime pay. A business can’t be held to the same requirements as they are for full-time employees because the independent contractor is legally self-employed. The difference in the two distinctions lies in how the worker is treated. A temporary employee may have set hours and duties and answer to a supervisor, working in a similar fashion to an employee. Whereas an independent contractor may set his/her own hours and may not have a direct supervisor overseeing their work.

Should I Hire a Contingent Employee?

The benefits and disadvantages of this type of employment need to be examined carefully. What works for one business may not work as well for another. If you need to ramp up your workforce for a project, temporary help may be right for you. If you have regular rises and falls in workforce demand, contingent workers can be an advantage for your business.

Discover the benefits and ease of contingent employees yourself on Field Engineer, a user-friendly platform for engineers as well as businesses. In just a few clicks, you will become a part of a global network of over 75,000 on-demand workers. Sign up today for free!

Didn’t see what you were looking for? Check out how freelancers are the future according to research, or see the complete skills directory  to find more engineers.

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