Why are workers contingent?

What is a contingent worker? This is a common question professionals ask when they are considering their employment options. Contingent workers are a group of people who do not have a contract that explicitly defines any long-term employment with a company. Their work is exclusively based on short-term engagements.

Employees who do not want to work in a certain company for a long period of time also fall under the category of contingent workers. Such employees may defined as freelancers, consultants or independent contractors. They can either work in the company’s offices or remotely. They are highly skilled and experts in their areas of specialization.

Differences Between Contingent Workers and Employees

Contingent workers are not considered employees of a company. They work as freelancers under a contract or on a temporary basis. Unlike permanent employees, their retention depends on the continued existence of the job at hand.

Contingent workers do not receive salaries. Instead, they receive payments or commissions for the work done. They are not liable for benefits like contracted employees and are responsible for their own taxes. Contingent workers cannot be told how to complete a project, as they work for themselves. The company’s main focus when dealing with them is on the results of the project, not how it is being done.

Importance of Contingent Workers to Companies

Companies who want to improve their overall output may hire contingent workers to expand their labor force. Tapping into the contingent workforce can also help companies save a lot of money on expenses associated with direct exits of contracted workers, training new employees and lost productivity. Companies also save by not hiring employees for skills that may not be useful in the next six to 12 months.