Define Contingent Workforce Trends

Last year at HCMWorks we wrote an article about a study by The Economist that found the demand for contingent workers would skyrocket over the next five years, with more than 61 percent of top bosses expecting the use of contract labour to increase.

The report surveyed executive decision-makers at 210 US and UK companies with at least 2,000 employees, finding that contingent workers account for more than a fifth of the workforce at over half (58 percent) of those businesses. A figure set to grow over the coming years.

Similarly, an Intuit 2020 report, notes that roughly 25-30 percent of the US workforce is currently contingent, with more than 80 percent of large corporations planning on “substantially increasing” their use of a flexible workforce in the coming years.

By 2020, it is expected that the contingent workforce will exceed 40 percent of the entire US workforce.

No matter what industry your large organization operates in, there’s no doubt that contingent workers will make up a significant portion of your workforce throughout 2020 and the coming years.

So, what contingent workforce trends could impact your company as we move through 2020? We’ve listed the top four here:

1 - Increased dependency on vendor relationships

Today’s companies are more dependent on vendor relationships than ever before. That’s because large organizations rely on vendors for all aspects of their business, from procurement, service providers, talent acquisition and much more.

Your company might be dealing with tens, hundreds or even thousands of vendors to provide products and services to your organization. To ensure your company stays both competitive and profitable, it’s essential that these vendors are compliant with your terms of agreement and that they meet your expectations.

Do you want to find out how your company can create a successful vendor compliance program? Read our blog titled ‘5 Steps to Create an Effective Vendor Compliance Program’.

2 - The need to position your company as an ‘employer of choice’

According to a Manpower survey, nearly half of global employers (45 percent) are experiencing difficulty filling open positions. In fact, in the US there are currently more open positions than skilled workers to fill them. This means workers generally have the luxury of being able to choose the company that they want to work for.

To access these workers and ensure your company is able to acquire the top talent in your industry, it’s important that throughout 2020 your organization is able to position itself as an ‘employer of choice’.

3 - The importance of creating a flexible talent pool

The increasingly challenging nature of meeting workforce objectives means it’s even more critical that your organization introduces new innovative recruitment strategies. Creating a talent pool can help here.

The creation of a talent pool, which is a database of potential job candidates that have already shown interest in working for your organization, will help your company reduce talent acquisition costs, find highly-skilled candidates that are interested in your firm and speed up the recruitment process.

4 - How changing laws have highlighted the need for a world-class contingent workforce management strategy and the use of an MSP

Last year, California introduced a new law (Assembly Bill 5) which required most companies to reclassify contract, freelance and contingent workers as full-time employees eligible for benefits, a guaranteed state minimum wage and further protection under the state’s employment law.

This law, while it doesn’t apply to many other states or countries around the world, does shine a light on just how important it is for your company to implement a successful contingent workforce management strategy.

That’s why in 2020, if you have not done so already, your organization should consider turning to the help of a managed services provider (MSP) with specialized expertise in the contingent workforce.

An MSP will revolutionize your company’s entire contingent workforce management strategy, bringing you more visibility and control, better talent acquisition, faster hiring times, significantly lower spend and a number of other benefits.

Do you have any further questions about how new trends in the contingent workforce could impact your organization in 2020? Get in touch with our team of contingent workforce management experts today. We would love to answer any questions your company has.

For more: Contingent Workforce Trends

contingent job offer

A contingency is a caveat or exception to the agreed upon terms of a contract or offer. In employment, a contingent job offer means the employer has presented you with an offer, verbally or in writing, but the company has covered itself in the event it discovers information that impedes your ability to do the job. Many job offers are contingent on a few common factors.

Purpose of contingent job offer

The primary purpose of a contingent job offer is to serve the interests of the employer. Once a hiring manager identifies the best prospect for a position, he wants to communicate the intent to hire to protect against losing the candidate to another employer. However, the hiring manager is often restricted in his ability to make an immediate offer because of standard human resource procedures. The contingent offer allows for prompt communication to the new hire, but also gives the company an out if a background check turns up problems.

Background Check

One of the most common contingent job offer  contingencies centers on the background check. Many employers hire third-party agents to conduct an extensive check of your previous employment, credit, criminal history and driving record. This process can take two to three weeks, which is why the contingent offer is normally made before the check is completed. If the employer uncovers criminal problems or other character problems that a person didn't disclose or that pose a problem, the offer may be rescinded.

ealth Screening and Drug Tests

Some employers require health screenings and drug testing on new employees. Drug tests are common in a variety of work environments to ensure the company doesn't hire someone actively using drugs. This testing normally takes a few days to schedule and complete. Health screenings are less common, but are required in certain professions. Airline pilots, for instance, must undergo health screenings to ensure they are in good health because of the safety risks to passengers and crew.

References and Employment Verification

Many employers contact a final candidate's references before extending a job offer. However, if it takes longer than expected, the hiring manager may want to reach out to the candidate with a contingent offer. Along with checking references a candidate provides, employers may also need to contact current or recent employers to verify work history and experiences. While employment verification is sometimes included in the background check, the employer wants to verify that you performed the duties and gained the skills you indicated.

Employer Risks

In a June 2012 article, background and reference check professional Paul Barada Sr. pointed out that contingent job offers are somewhat risky for employers. When a company makes an offer and rescinds it after checking references and backgrounds, the employee can put two and two together to realize what happened. Employees have the legal right, according to Barada, to review materials used in the decision. Such a review could make the company vulnerable to civil lawsuits if the employee discovers any damaging information that he can prove is false.

contingent employment definition

Contingent Workers

Contingent workers are typically defined as people who are not employees of a company. Instead, these workers are freelancers who might work under a contract, on a temporary basis or provide consulting services as needed. Many companies consider salespeople as contingent employees. Instead of receiving a salary, a contingent worker receives payment or commissions for completed work. Contingent workers cannot be told how to complete a project, as they work for themselves. The company's focus with contingent workers is not how the work gets done; the focus is on the results.

Contractual Employees

All employees who are hired in states with at-will employment guidelines are contractual employees whether there is a written agreement or not. The IRS defines these employees as common-law employees. At-will employment allows an employer or employee to terminate the work relationship at any time without cause. As long as employees meet the rules of employment, and work continues to be available, their "contract" for work continues. Violations of the contract, such as disciplinary actions or company violations may result in the ending of the contract. Contractual employees might work on a permanent or temporary basis. Contractual employees have taxes withheld from their paychecks and might be eligible for benefits dependent upon company policy and employment laws.

Advantages

The advantages of a contingent workforce compared to contractual employees include that the company does not have to collect and pay quarterly taxes from paychecks. Instead, only an IRS 1099 tax document is created at the end of the year for payments to contingent workers when the year's payments were $600 or more. In contrast, an advantage of a contractual workforce is that it ensures that staff is available during specific hours to handle business needs.

Disadvantages

While hiring contingent workers reduces the need for staffing in certain areas, an employer lacks control over the contingent worker. Because a contingent worker manages himself, a company has only monetary control over the worker. The company cannot set work hours or treat contingent workers as employees. Companies that violate the IRS rules with respect to these independent contractors will be required to change the worker's status and pay fines and penalties, along with all back taxes on the payments made to the worker. The disadvantage of an employee workforce is that the employer incurs added costs, including federal unemployment taxes, employer contributions to Social Security and Medicare taxes, office rent and maintenance and office supplies and equipment for the employees to use.

labor pool definition

Labor is the amount of physical, mental, and social effort used to produce goods and services in an economy. It supplies the expertise, manpower, and service needed to turn raw materials into finished products and services. In return, laborers receive a wage to buy the goods and services they don't produce themselves.

Labor is the amount of physical, mental, and social effort used to produce goods and services in an economy. It supplies the expertise, manpower, and service needed to turn raw materials into finished products and services.

In return, laborers receive a wage to buy the goods and services they don't produce themselves. Those without desired skills or abilities often don't even get paid a living wage. Many countries have a minimum wage to make sure their workers earn enough to cover the costs of living.

Labor is one of the four factors of production that drive supply. The other three are:

1. Land. This is short for the natural resources or raw materials in an economy. 
2. Capital. This is an abbreviation of the capital goods, such as machinery, equipment, and chemicals that are used in production.
3. Entrepreneurship. This is the drive to profit from innovation.

In a market economy, companies use these components of supply to meet consumer demand.

The economy runs most efficiently when all members are working at a job that uses their best skills. It also helps when they are paid according to the value of the work produced. The ongoing drive to find the best match between skills, jobs, and pay keeps the supply of labor very dynamic. For this reason, there's always some level of natural unemployment. For example, frictional unemployment allows workers the freedom to quit a job in search of a better one.

labor pool definition

How Labor Is Measured

Labor is measured by the labor force or labor pool. To be considered part of the labor force, you must be available, willing to work, and have looked for work recently. The size of the labor force depends not only on the number of adults but also how likely they feel they can get a job. It is the number of people in a country who are employed plus the unemployed.

Not everyone who is jobless is automatically counted as unemployed. Many are jobless by choice and aren't looking for work. Examples include stay-at-home moms, retired seniors, and students. Others have given up looking for work. These are discouraged workers. 

The real unemployment rate measures everyone who would like a full-time job. It includes the discouraged workers. It also includes those who are working part-time only because they can't get a full-time job. It's called the real unemployment rate because it gives a broader measure unemployment.

The labor force is used to help determine the unemployment rate. The unemployment rate formula is the number of unemployed divided by the labor force. It tells you how many people in the labor force are jobless but are actively looking for work.

The labor pool shrinks during and after a recession. Even though many would like a job, they aren't looking for work. They aren't counted in the labor force.

The labor force participation rate is the labor force divided by the civilian non-institutionalized population. It tells you how many people are available and looking for work.

The amount of goods and services that the labor force creates is called productivity. If a certain amount of labor and a fixed amount of capital creates a lot, that's high productivity. The higher the productivity, the greater the profit. High productivity gives the worker, company, industry, or country a competitive advantage.

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.

labor pool definition

Definition: Labour force participation rate is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment. People who are still undergoing studies, housewives and persons above the age of 64 are not reckoned in the labour force.

Description: The labour force participation rate is the measure to evaluate working-age population in an economy. The participation rate refers to the total number of people or individuals who are currently employed or in search of a job. People who are not looking for a job such as full-time students, homemakers, individuals above the age of 64 etc. will not be a part of the data set. This is an important metric when the economy is not growing or is in the phase of recession. It is that time when people look at the unemployment data.

At the time of recession, it is generally seen that the labour force participation rate goes down. This is because, at the time of recession, the economic activity is very low which results in fewer jobs across the country. When there are fewer jobs, people are discouraged to focus on employment which eventually leads to lower participation rate. The participation rate is also important in understanding the unemployment rate in the economy. Analysing consistently the unemployment rate in the economy is very important.

People who are not interested in working or getting some sort of employment are not included in the participation rate, but to understand the unemployment data better, participation rate is considered carefully. An ageing population may have a negative impact on any economy. That is when the labour participation rate comes into the picture. If the rate is on the higher side, it is a good sign. But if it is on the lower side, it can also act as a warning sign for any economy. For that reason, participation rate as well as unemployment data should be looked into simultaneously to understand the overall employment status in the economy.

What is WiFi How does it work?

Ah, good ‘ole WiFi. From helping us to keep our phone bill low (except March, goddammit) to allowing our laptops/tablets/etc. to connect to the internet, WiFi has been a ubiquitous companion that we’ve all come to know and love.

WiFi is also useful for some IoT applications (wait, what is IoT?), such as building and home automation or in-house energy management. For many other IoT applications, WiFi is absolutely useless.

Given the importance of WiFi to our everyday lives and to certain IoT applications, here are 8 interesting things about WiFi that you didn’t know!

1) WiFi Started in Hawaii

Or at least, the early precursor to WiFi did. ALOHAnet was a pioneering computer networking system, developed at the University of Hawaii, that provided the first public demonstration of a wireless packet data network.

That was in 1971. It wasn’t until 20 years later that NCR Corporation and AT&T Corporation invented WaveLAN, considered the true precursor to WiFi. Then, in 1997, the first version of the IEEE 802.11 wireless protocol was released.

“But wait”, you say, “what’s the IEEE 802.11 wireless protocol?”

2) WiFi = IEEE 802.11

When any two machines communicate to each other, they need certain standards and protocols defined to enable them to communicate. IEEE 802.11 refers to the set of standards that define communication for wireless local area networks (with IEEE standing for Institute of Electrical and Electronics Engineers).