Risk, Rewards And The Rise Of The Contingent Workforce

Why businesses need to modernize their operations

Against the backdrop of an unprecedented labor shortage and other economic challenges, businesses across industries have reconsidered their talent strategies. Organizations are now looking well beyond their own employee pool and are embracing an extended workforce, also referred to as a contingent workforce, made up of seasonal and part-time employees, temporary workers, and contractors.
 

Reliance on non-traditional labor is a tried and tested strategy to build a more flexible and resilient workforce, but one presenting its own challenges.

A recent survey commissioned by Sterling found that a third (33%) of HR professionals believe that hiring contingent workers is more complicated than hiring traditional labor. Whether it is the onboarding process, background check, or maintaining trust and safety standards, onboarding gig and contingent workers has proven to be a pain point for all parties involved.

Now HR teams are dealing with a new workforce, one that is re-evaluating how, where, and why they want to work. For business leaders thinking about augmenting their workforce with contingent workers, and competing against other brands doing the same, they must first modernize their operations by considering the following issues.

Rethinking Workforce Strategies

Ever since the pandemic, businesses of all sizes have adopted hybrid workforces, where leveraging contract workers and consultants has become standard practice. While not full-time employees, these workers often occupy a position of trust, having daily customer interactions or access to restricted areas and sensitive information.

Regardless of their role, contingent workers still represent their employer's brand and as a result, have a direct impact on company culture. To engage trustworthy talent, companies must have the right onboarding process in place to keep trust and safety at the forefront of their hiring practices.

Flexibility and resiliency are often the two greatest motivations for tapping external labor. Resilient organizations can weather sudden industry changes and consumer demands. As the Covid-19 pandemic demonstrated, it is essential to employ workers capable of helping brands maintain business continuity.

For example, a short-term workforce is essential to operate during periods of seasonal demand or worker shortages. In order to manage future unforeseen disruptions, companies need a solid workforce strategy in place allowing them to activate contingent workers at a moment’s notice.

A hiring and onboarding process that simultaneously simplifies the employer’s screening process and delivers a great candidate experience can help companies utilize and scale back labor as they need.

Identifying Onboarding Challenges

A common concern among HR staff onboarding gig and contingent workers is losing quality candidates during the onboarding process — and for good reason. According to a Sterling survey that polled contingent and gig workers, who recently went through a hiring experience, 85% indicated that they either considered dropping out at some point in the process or actually did drop out of the hiring process.

The reasons why are not surprising: four out of 10 (40%) in the survey pointed to a complicated hiring process as the reason for their withdrawal; a third (33%) had an issue with the background screening process; while a quarter (26%) said there were too many touchpoints in the process.

Overall, candidates desire proactive communication from their potential employers, as it signals mutual respect. To maximize the advantages of contingent workers, businesses can focus on prioritizing the candidate experience across the hiring process, making sure that it is seamless as possible with the right technology and workflows in place.

The Future of Hiring Is Right Now

Screening contingent and gig workers can be more challenging than traditional processes because it usually has to be done at scale. This outsized effort can delay the process and make it more difficult for candidates to complete.

Fortunately, shoring up these gaps does not necessarily have to be a heavy lift. In many cases, businesses are already deploying workforce platforms that can manage contingent and gig workers. If so, it is imperative for companies to integrate with a background screening partner that can enrich their platform’s candidate data.

Experienced background screening partners allow companies to set up customized workflows to reduce turnaround times. Even better, these workflows can be automated to help free up workers for more urgent tasks. API integrations can add an additional layer of automation to advance candidates’ record information and communication between databases, further minimizing the need for manual review.

On-demand work and extended workforce strategies have created new opportunities for workers and organizations to embrace flexibility and meet customer demand. With the proper workforce safety and background screening processes in place, this new way of working can empower businesses to scale their operations at any time and in any region.

Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising from this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.

Author Bio

Joy Henry is the Head of Sterling’s Technology and Business Services group, where she is responsible for the P&L of the Financial Services, Retail, Gig, Staffing, Diligence, Technology, Media, Entertainment, and Hospitality practice areas of the business. Joy joined Sterling in 2013 and previously held the position of General Manager of the Financial and Business Services Practice Area. Prior to Sterling, Joy spent over a decade at Dow Jones/News Corp serving in various roles across the organization.