For small business owners, few things will be as significant as the growth of the “contingent” workforce.
What is the contingent workforce? It’s the workforce made up of contractors, part-time workers, freelancers, independent professionals, and consultants.
Although these types of workers have been used for many years by some businesses, contingency work is booming today due to new technology and continuing economic woes. As a savvy small business owner, you need to know how to take advantage of this talent pool, where to find them, and how to manage them.
Contingent workers can save you money and time, and elevate your team with specialized skills and deep knowledge.
They are not on the payroll and provide temporary employment or special skills to reduce costs, or to staff projects. Some may work remotely from home or from distant locations.
A few examples:
- Rather than employ a full-time marketing manager, you hire a part-time remote social media specialist, a local contract writer to draft your customer emails and polish up the copy on your website, and a work-at-home graphic designer to design your coupons. And you hire them all through UpWork or even Craigslist.
- Rather than hire a full-time assistant, you hire a part-time virtual assistant through Zirtual.
- Instead of hiring a full- time IT guy, you hire a tech guru for 5 hours a week.
Contingency workers represent 15.8 percent of the workforce and that number is on the rise. As a small business owner, you can start benefiting from the growth of the contingent workforce now (if you haven’t already).
Contingent Workers: Risk vs. Reward
Have you ever thought, “I really need to hire help to take the load off of myself, but I don’t know if I can afford to hire a full-timer” or “I really need to get this project done, but no one on staff has the right skills for it”?
In these situations, it may make sense for you to hire a contingent worker. They come to your business to work on a specific project or fill a very specific need for either a short- or long-term temporary time-frame.
This is also a much more flexible working arrangement than a full-time employee:
- You don’t need to pay benefits, taxes, insurance or in many cases, even manage their payroll. If you hire a contingent worker through a service like UpWork or TaskRabbit, those services handle the payroll for you.
- They have a skill or expertise that would be too costly to hire for in a full-time employee.
- They can be brought in quickly and generally have the experience needed to get up to speed in a short amount of time.
- They can also be let go quickly without the headache of following a procedure to lay them off.
At the same time, there are risks and downsides to employing contingent workers:
Temporary and part-time workers are less likely to be loyal to you and your business, which means that when sharing information with them, they are potential security risks. Depending on the type of projects these contingent workers are involved in, check with a legal professional to make sure you have the proper disclosures and agreements signed, such as Non-Disclosure Agreements.
Contingent workers also have no expectations of career moves like a promotion. This means that motivating these workers requires special thought and needs to be appropriate to the situation.
How Can I Use Contingent Workers?
Small business owners can draw from a wide range of contingent work arrangements and skills sets. Almost any job category is available on this basis, but popular services for small businesses include:
- General virtual assistants to offload administrative tasks
- Writers and designers for content and social media marketing
- Social media managers
- Website developers and designers
- Software developers for building new apps
- Technology specialists for setting up equipment
- Sales and marketing assistants for quick ramp up of new initiatives
- Accountants, cash flow managers and even CFOs
- Staff additions to take on temporary projects or to keep up with the workload
In addition, a contingent worker can fill in for staff shortages due to retirement, leave, or illness; they can also help you to quickly staff up new operations and get new business started in a hurry.
Contingent workers can help you staff up during busy times or for seasonal work as well.
How Do I Hire Contingent Workers?
Locating and hiring temporary and contract workers is similar to locating full-time talent. Some of the places where you can find part-time, contract, and virtual help are:
- Social media, particularly business-oriented sites such as LinkedIn
- Classified recruitment advertisements in local newspapers or online at sites such as Craigslist
- Online task sites such as Mechanical Turk, or TaskRabbit for small jobs, and Contently or Upwork for larger or longer term projects
- Staffing agencies such as Kelly Services
- Professional organizations suited to your business
- Your own informal contact networks
When posting a job or placing an ad, .it is important to start with a good job description. You want to be as clear as possible on exactly what you’re looking for in a contingent worker.
What project do you need managed? What skill are you lacking in your current team? If you can’t clearly articulate what you’re looking for, your ad will not attract the talent you’re seeking.
Be as clear as possible about the problem you’re trying to solve in hiring a contingent worker. This will make the hiring process much easier on you and your potential hire.
Throughout the hiring process, you need to understand the legal issues in hiring contract and temporary employees. Namely, if contingent workers do not meet the “independent contractor” status, they become employees by the rules of the IRS and other agencies. This will make them eligible for employee benefits, and subject to payroll taxes.
For all temporary workers, it is important to have end-of-contract provisions in place, so that both parties can agree to terms regarding intellectual property, trade secrets, and other details before the work begins. Non-compete and non-disclosure clauses should be reviewed. Although offering a full-time position at the end of a successful contract is often considered, it should be noted that some freelancers and contract workers may not be interested in transitioning to full-time jobs.
How Can I Fit Contingent Workers into My Team?
When you employ contingent workers, it is important to provide an initial orientation on the basics of how you want the job done. This should follow the same pattern as on-boarding a full-time employee.
Orient the contractor to:
- Your company’s brand, mission statement and value proposition
- The systems and tools you need them to use
- Your business goals
- Specific projects they will be working on, either individually or as part of a team
- How success will be measured
Ensure that your contingent workers feel like they are part of the “family” and the best way to do this is to completely integrate them with the rest of your team. Things that you can do to ensure workplace harmony include:
- Create a sense of inclusion. Make sure contractors and part-time workers are included in informal company events
- If they are working remotely, invest in and use tech tools to make teamwork easier for remote workers
- Establish clear responsibilities and progress reporting
- Always maintain good communications, meeting regularly with temporary workers to discuss their progress and needs
- Make sure contract and part-time workers have their own workspace (unless virtual). Don’t just dump them at a conference table.
- Ensure that virtual and remote workers have the technology that they need, and sufficient and regular communications.
Remember that even if it’s not now, in the future your entire team may be made up of contingent workers so it’s important to learn how to manage them.
Flexible hiring practices can make a tremendous difference to your bottom line. The impact can be immediate, but it does demand an understanding of the issues involved—particularly, the distinction between a private contractor and an employee.
For small businesses, resilience and agility are critical. Use of a contingent worker is one way of obtaining that flexibility. If handled carefully and supported by well-understood policies, a contingent worker can be an important asset to your business.