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Knowing the type of Contingent Worker You Need

The term “contingent workforce” at one time referred to a relatively small group of workers employed in temporary positions either through a staffing firm or directly with the employer. In the last decade, the size and scope of the contingent workforce in the United States has expanded dramatically; in October, the temporary employment penetration rate was 1.9% up from 1.3% in 2009*. The contingent workforce now includes many new forms of non-traditional employment, such as leased labor, temporary labor, contractors, etc.

*NOTE: The temporary help penetration rate is the number of temporary agency workers as a percentage of all workers.

The different terms can be very confusing, especially given the fact that many people use the terms interchangeably, when, in fact, they represent completely different (yet subtle) classifications of workers.

Recently, the American Staffing Association conducted a comprehensive survey of contingent workers, where they surveyed over 13,000 current or former contingent workers from 186 companies.

In an interesting side note, the survey discovered that even the employees, when asked to self-identify, varied in their use of the terms “contract worker” and “temporary worker”. In fact the terms were used interchangeably, with many of those polled preferring the term “contract” (43%) to “temporary” (57%).

The point here is that the distinction between the various types of temporary workers and contract workers is often blurred by employers, analysts and employees themselves, and no official definition exists.

However, some acceptable ways of standardizing the terms are as follows:

  1. Independent Contractors – These workers are self-employed and provide specialized skills on a contract basis with little to no supervision by the hiring company.
  2. Temporary Workers –
    • Temporary Employees or Agency Temporaries – These workers are provided by a human capital management (i.e. staffing) firm to a specific company for a limited period of time on a fill-in basis or for a finite project. The work is usually directed by the client. The main differentiator of a temporary worker is the short-term nature of his/her position.
    • Direct Hire Temporaries – These workers are employees of the companies where they work. They are hired for a limited period of time (usually for seasonal work or for a special project).
  3. Leased Employees – These workers are also provided by a staffing firm to a specific company to fill positions on a long term basis. These employees generally are not “permanent,” but their employment is for a longer term than typical temporaries.
  4. On-Call Workers – These workers employed by a company but are only call in to work on as as-needed basis (think substitute teachers).
  5. Professional Employer Organization (“PEO”) – In this employment situation, all or most of an employer’s workers are hired by the employer but then co-employed by the PEO, which assumes the employer’s responsibility for employment taxes, benefit plans, and other human resources related obligations.
  6. Human Resources Outsourcing (“HRO”) – In this employment situation, human resources functions are assigned to an outside agency. The HRO agency does not assume the role of an employer in this model.

Regardless of what type of worker you are looking for or what term you are using, Snelling can help. We have been in the business of placing the right candidate in the right job … whether it’s contract, temporary, temporary-to-hire or direct hire. We are here to help you explore all your options. Contact your local office where one of our talented consultants can work with you to maximize your workforce planning returns.