If you’re involved in staffing for your organization, the key statistics highlighted in a recently-released infographic from the workforce collaboration company Mavenlink, shouldn’t surprise you much. From 1995 through 2012, the total workforce of contingent workers grew by an estimated 4.3 million workers and a recent Economist Intelligence Unit report found 61% of senior executives expect the trend to continue with a growing proportion of functions to be outsourced to contingent workers.
Companies turn to contingent workers for a number of reasons but probably the biggest drivers are rising labor costs and the need for a highly adaptive and scalable workforce, especially in light of recent economic uncertainties.
Contingent or independent workers can offer many advantages but they also present concerns as many organizations lack the skills and knowledge to effectively manage the risks of this workforce segment. The well-known consulting firm, Deloitte published an article on the contingent workforce that outlined the factors driving the trend (there are several great reasons behind this staffing strategy) but also highlighted the risks that can essentially wipe out the potential benefits.
Here are some of the biggest issues highlighted in the Deloitte article:
- Legal and regulatory challenges involved with misclassifying employees vs. contingent workers.
- Lack of cost transparency, which can limit a company’s ability to analyze true workforce spend.
- Competitive risks from the loss of trade secrets and intellectual property.
One extremely interesting statement made in the Deloitte article is this: “When these workers support business-critical functions and interact with customers, the lines between employees and the contingent workforce blurs.”
This statement segues into what we consider to be a huge and often-overlooked concern in managing a contingent workforce: When the line between employees and contingent workers is unclear — as is often the case when contractors interact with a company’s customers — you can bet you’ll be blamed if something goes wrong. In other words, don’t think you’re escaping risks or that you’ll be able to pass the buck if an independent contractor working for you does something untoward.
Employment Screening Should Extend Across Your Entire Workforce, Contingent or Not
It’s a simple matter of smart risk mitigation to make certain this group is being screened to the same extent you would screen an employee in the same role. Learn more about how to screen contingent workers by reading this related article:
Here’s the Mavenlink infographic: