Contingent workforce managers should be fully aware of their contingent workforce, regardless of whether direct line-management responsibilities are delegated.
FREMONT, CA: A contingent workforce enables businesses to respond effectively to fluctuations in demand across industries or marketplaces. When the volume of work increases, they can utilize the contingent staff. Access to contingent labor in priority nations enables international corporations to quickly shift their focus across regions based on their business requirements. Terminating employment when there is insufficient business or when individuals lack the necessary skills and experience is costly for the employer and distressing for long-term employees.
Less screening and hiring oversight
HR management helps to conduct less due diligence when directly recruiting contingent labor than while hiring permanent workers. It increases the risk of exposing the company to workers who are not subjected to the same level of security screening as permanent employees. When the managers hire contingent workers through an expert intermediary, for instance, a recruiting agency, the hiring firm typically lacks direct management of the screening process and relies on the agency's expertise.
Blurred accountability
When dealing with a contingent workforce, responsibility and accountability for delivery and success can quickly become muddled between the hiring corporation, third-party service providers, and independent contractors/consultants. Failures may result in severe company and reputation harm or legal issues. Companies may need to consider responsibility boundaries in greater detail and manage risks associated with consumer data, commercial confidentiality, and other areas.
Personnel misclassification
Businesses that operate in many countries with different legal systems face increased dangers. As the contingent workforce develops, so does the potential of misclassifying employees and all the associated legal and tax problems. When entering new markets, specialists must get early assistance from specialists.
Lower staff engagement
Contingent workers are less likely to feel that they are corporate team members and are less personally dedicated to attaining company objectives than their colleagues with permanent or long-term contracts. It is a difficulty for managers attempting to direct and encourage all employees.
Fragmented management
Managers may struggle with the successful deployment and supervision of contingent workforce compared to permanent personnel, particularly when business plans, HR strategies, and operational strategies lack clear direction on how to incorporate contingent labor.
Reduced institutional continuity and memory
The turnover rate of contingent workers is expected to be higher than that of permanent employees and will diminish institutional memory. If contingent workers interact directly with clients, turnover may also impact stakeholder involvement and the organization's reputation.
