What Is A Contingent Worker? (Definition And Types)

Contingent employees are individuals who work for an organisation on a temporary basis for various projects and their roles may include that of consultants, independent contractors and other contractual employees. Hiring contingent employees can help businesses reduce expenses or utilise specific skill sets for individual projects. If you are interested in this role, you may benefit from knowing what the job entails.

In this article, we explain what contingent workers are and how they differ from other types of employees, review why companies hire these types of professionals, explore the benefits and drawbacks of being a contingent worker, see the types of contingent employees and list tips for succeeding in contingency roles.

What Is A Contingent Worker?

A contingent worker, or a consultant, is an individual who contracts out their services to an organisation. As they only work when necessary and for a specific period, companies may not regard them as regular salaried employees. Enterprises typically employ contingent employees to complete a particular project or to help with a phase of a project.

While beginning a contract with a company, contingent employees usually sign a statement that governs their performance and outlines parameters for deliverables. These employees stop working for an organisation once they finish a project. If a contingent employee's performance impresses an organisation, the organisation might hire that individual again on future projects, or consider them for a full-time salaried position.

Related: Salary Vs. Wage: What's The Difference Between The Two?

How Are They Different From A Regular Salaried Employee?

While an employee consistently completes tasks and continues working as a salaried personnel, employers hire contingent employees for specific projects or to help with phases of individual projects. Temporarily performing tasks for organisations, contingent employees often adhere to a set work schedule. Companies hire them for a particular set of skills, or for specialised knowledge of a domain or sector. Unlike employees, they do not receive extensive on-the-job training.

Contingent staff may only receive payment for specific projects for which employers hire them, unlike salaried or hourly wage employees. Normally, the two parties agree on a predetermined payment for a deliverable or a set of work hours in advance. Another distinction is the absence of benefits like health insurance and retirement plans for contingent employees. They are also typically in charge of paying their own income taxes rather than through automatic deductions from a monthly or weekly salary.

Why Do Companies Hire Contingent Employees?

Here are some scenarios where companies might hire a contingent employee:

• Upgrading a website: For the purpose of creating a new e-commerce website, an organisation without a graphic design division may hire a freelance website designer.

• Technology training: When introducing a new computer programme to its personnel, a company may employ a computer training specialist.

• Event planning: Organising a large company's annual events may require the services of an event planner.

• Creating corporate documents: A business owner may commission a freelance writer and a human resources specialist to work on onboarding materials like a new employee handbook.

Related: What Is The Onboarding Process In HR? (With Benefits)

Advantages Of Contingent Work

These are some advantages of contingent work:

For employers

Employers can benefit from hiring contingent employees if they are aware of a temporary requirement for a particular project. They are not required to cover additional expenses for a contingent employee's benefits or offer paid time off or sick leaves. These employees typically do not require training from other employees, saving the company a significant amount of time and money.

For contingent employees

Professionals have more flexible schedules when they work freelance or on a contract basis. They can select their work hours and the specific type of work they desire to perform. Sometimes, they might also be able to complete their work from home, at any time of the day, as long as they strive to meet predetermined deadlines. Contingent work enables professionals to work on a wider range of projects in a variety of domains. This is excellent for those who enjoy doing different tasks every day.

Disadvantages Of Contingent Work

Though contingent work can be beneficial, it may come with some disadvantages, such as:

For employers

Employers have little to no control over workflows that contingent teams address, which may be a drawback of hiring contingent employees. Internal teams may not be able to get in touch with contingent employees on a routine basis to give them instructions. If a company requires a contingent employee, it may face challenges in finding a qualified contingent employee at short notice. When a crisis occurs, full-time staff are typically readily available, but finding a qualified contingent employee requires time and effort. Employers who hire contingent employees are required to plan accordingly for projects.

For contingent employees

It can be challenging to afford services, such as health care and dental insurance, if you are unable to secure a well-paying contract or regular freelance work. As temporary employees do not receive benefits, many people choose full-time employment solely for the additional benefits of the job. Contingent work also offers less job stability. Finding the next project can take up a lot of a contingent employee's time.

Types Of Contingent Employees

These are some types of contingent employees:

Contract workers

A contract worker is an individual that a company hires for a predetermined period of time to carry out a particular responsibility or task. These individuals might, for instance, fill job openings, provide temporary assistance or address a specific skill requirement. These professionals often provide specialised services, including web development or graphic design, for a particular project. A contract employee's compensation is similarly determined beforehand and employers may pay them prior to, during or after completion of the job.

Related: 8 Major Benefits Of Contract Work (With Definition And Tips)

Independent contractors

A company hires an independent contractor to perform specific tasks or provide services for a limited amount of time. Independent contractors may work permanently for companies, on a specific project or on an as-needed basis. These employees are in charge of paying their own taxes and are not qualified for any benefits from employers for whom they work. Subcontractors, freelancers and contractors are all terms that can describe independent contractors.

Related: What Is The Gig Economy? Definition And Career Advice

Interns

An intern is an individual who works for an organisation on an unpaid, paid or partially paid contract in return for the experience they receive in the workplace. Internships are a common way for college and high school students to be prepared for workplaces following graduation. Typically, internships last a few months, after which employers may ask some interns to join the company as full-time entry-level employees.

Related: 34 Common Intern Interview Questions (With Example Answers)

Consultants

A consultant is a self-employed individual who provides qualified counsel in their field of specialisation. For instance, a consultant might be an expert in advertising, law or education and offer advice to businesses in that field in an effort to assist product, service or business development. Depending on a firm's consulting needs, it may frequently employ consultants who offer their skills on a temporary yet repetitive basis.

Related: How Much Does A Consultant Make? (With Duties And Skills)

Tips For Becoming A Successful Contingent Employee

Most companies require qualified contingent employees they can rely on for specific projects or for assisting with phases of individual projects. If you are someone who enjoys working independently and excels at managing your own work, consider contingent work. Here are some tips to perform successfully as a contingent employee:

• Provide work samples. While applying for contingent work, many companies, particularly companies hiring creatives, require work samples. For example, writers and designers create portfolios of their work in addition to their resumes, as this may help employers decide if an applicant's work style is right for their project.

• Establish trust. To be a successful contingent employee, it is vital to demonstrate to companies that you are highly skilled and capable of achieving project outcomes. Contingent employees may give company officials updates on the status of their work throughout the duration of a project.

• Maintain communication. Companies appreciate it when contingent employees respond to their phone calls and messages promptly. This helps reduce gaps in communication, which can disrupt internal workflows.

• Learn to be independent. Employers may want to hire someone who can work independently while meeting deadlines. Many contingent employees work remotely, so you may be required to learn how to effectively manage your own time and stay on task to provide deliverables within predetermined deadlines.

• Be humble. Even if you are more knowledgeable in a particular area than the staff at a company, it is important that you always treat them with respect and facilitate a collaborative engagement.

• Fully understand the project. Before starting work on a project, make sure you fully understand what the employer expects of you. This way you can contribute outcomes that are useful for both a company and its staff.

• Meet deadlines. Make sure you are getting your work done on time. Many internal processes in an enterprise may depend on the timely delivery of contractual services and their outcomes.