Contingent workers are no longer the exception—they’re part of the norm.
According to Rebecca Cenni-Leventhal, founder and CEO of Atrium, a workforce management and staffing firm based in New York City, an extended workforce opens a world of potential for finance leaders. She shares the benefits of bringing these flexible workers on board, and also the considerations leaders should have in mind in order to leverage this resource for success.
It is estimated by some that more than 35 percent of the workforce is now composed of contingent workers. Can you talk about how using contingent workers and independent contractors differs from hiring full-time employees or even traditional temp workers at a company?
Flexibility is the name of the game. It’s no wonder contingent workers and independent contractors are in high demand. These temporary workers offer specialized skill sets, allowing companies to quickly adapt, expand their capabilities and control costs without increasing headcount.
In my experience, when companies encounter an uncertain future, they can benefit greatly by leveraging an extended workforce. You have to be nimble to overcome unforeseen obstacles. Therefore, establishing an extended workforce strategy should be viewed as a critical component of your overall workforce planning, on par with hiring full-time employees.
But with this comes a layer of complexity. I always remind clients that working with the contingent population requires a different approach to compliance than hiring full-time staff. Regulatory and legal issues need to be considered, so it’s important to stay informed and seek expert advice when necessary.
What should a CFO consider before making a move to hiring contingent workers or independent contractors? Does it work for all organizations?
It’s estimated that nearly 86 percent of companies already leverage a contingent workforce. It’s not a trend—it’s the future of work. It’s a workforce model I have seen work for organizations of all sizes and industries. Plus, as younger generations continue to embrace gig economy jobs, it’s only going to become more prevalent.
As CFOs look to take advantage of the agility contingent workers bring, they should take a close look at their organization’s potential contingent roles and what structure and processes are in place to support the proper onboarding and management of these types of workers. Having a holistic view of what is needed to engage temporary workers from the start can make a big difference in getting your contingent workforce up and running and setting them up for success.
Another consideration is whether your company has the necessary tools to manage the risks that come with having an extended workforce, including co-employment, misclassification and compliance with supplier contracts. If you’re facing such challenges, working with a partner who can help you navigate them and streamline your extended workforce engagement will make a significant impact on compliance.
Given these differences, what are the major benefits—financial and otherwise—that CFOs can expect by using contingent workers and independent contractors? Are there any disadvantages?
Again, flexibility is a major benefit to the use of contingent workers. They’re great for sourcing those hard-to-find skills and aligning with market opportunities. Plus, they can supplement or support internal resources, making a company much more responsive. The flexibility I have mentioned is also a benefit for talent in the extended workforce and has played a large part in its explosive growth over the last decade.
Using contingent talent strategically offers many benefits, such as quality control, reduced time-to-fill and cost savings driven by continuous optimization. However, it can also bring about certain challenges that require careful management, including uncontrolled and unmanaged growth. These challenges can lead to a lack of visibility, inconsistent standards and processes, rising costs, compliance issues, misclassification and security concerns.
Partnering with an experienced workforce management firm can help efficiently overcome these challenges in managing this population, providing peace of mind. They can help ensure that all your contingent workers are properly assessed and classified, reducing the risk of misclassification and legal issues, and provide visibility into program spend, leading to optimization and cost savings.
Plus, they can help you navigate the complex world of tax and labor laws, saving you time and resources. This allows you to focus on your core financial operations while still having confidence that your contingent workforce is compliant and cost-effective.
Can you share your insights and advice for CFOs on what they should do in preparation for hiring a contingent workforce?
Managing a contingent workforce effectively requires a strategic approach. Sometimes, managers try to do things their way when hiring contingent workers, using their preferred and varied talent supply partners. But as the use of contingent talent increases, managing them becomes more complex, which can lead to limited visibility and increased risk.
Gaining buy-in from stakeholders, developing formalized processes and choosing the right talent technology are all important steps you should take right from the beginning to create a seamless experience for managers and talent. Vendor management systems and dedicated oversight resources play a large role in effectively leveraging the extended workforce, so connecting with someone with the experience to help you choose and operationalize the right tech to avoid the risks I listed above can be an enormous leg-up.
I have talked a lot about the business case for a contingent workforce, but I would be remiss if I didn’t emphasize this final point—always remember the people behind the contingent workforce. Focusing on the contingent worker experience allows you to establish meaningful relationships and attract higher-quality candidates, leading to greater engagement, productivity and ultimately, cost savings. A people-first approach helps create experiences that engage and motivate contingent workers while also developing their loyalty toward your brand.
