Monday, April 2, 2012

The Evolution of the Contingent Worker

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During my regularly scheduled industry analysis a couple weeks ago I happened upon a blog by Subadhra Sriram of Staffing Industry Analysts regarding the evolution of the contingent worker over the past five years. Five years ago, people wondered exactly what a contingent worker was. At that time, a supplemental workforce was composed of mostly temporary workers.  The problem being temporary workers didn’t like being called temps and rules and regulations regarding their implementation on projects have changed. A contingent workforce no longer has that stigma.

The line between contingent and full-time workers is blurring
This got me thinking that in today’s company, workforce or lifestyle is there any real difference between regular full-time workers and contingent workers?  From an accounting standpoint there most certainly is a difference. When one takes a step back to look at the broader picture, there are a few right answers to this question.

From a company perspective, there’s no question about the difference. Companies can pay for the services of a contingent worker while avoiding the associated overhead of taxes, benefits, and long term responsibility for their development. Pay a firm for their workers until the project is complete or the planned ramp up in production has ended. Another benefit to companies is something I like to call “at-will times two.”

If you don’t like the way your project is headed, you can get a whole new team to work on it without all of paperwork and negotiation that comes with letting full-time company workers go. If you’re a company looking for just-in-time delivery on a project, what could be better?

From the worker perspective, the answer to the any difference question would likely be “no.” Workers see and read about companies where shareholders all too often only care about the bottom line and how letting go of 700 employees here and 1,500 there makes the company much more attractive to investors.

Our at-will employment society has non-competes as the norm and the concept of job security means that there are physical guards in the building to prevent a worker from harming others when terminated.  It doesn’t matter if you are 1099, temporary, contingent or full time; you have right around the same chance of getting fired.

Is this an extreme example?

Sure it is. 

Are all companies like this now?

The simple answer is again to the contrary. There are companies who value engaged contingent workers and full-time employees alike. They work side-by-side with one another and do their jobs with enthusiasm. Employers often treat them as equals unlike the temporary workers of years past.
The more complex answer is, “Not yet.” Just as with most things with financial benefit to companies (pensions anyone), the cutting and attitude changes start on the fringes and work their way to the norm.  It won’t be long before there is no difference, other than how you file your taxes, in the different kinds of workers companies employ.

That’s not to say there isn’t a need for a strong leadership core in your company or that one of your contingent workers might indeed be that next company all-star. It’s almost a try before you buy scenario; yet another benefit to the use of a contingent workforce.

Don’t get me wrong. I am in the very business of helping companies develop their contingent project teams.  The same could be said for contingent workers themselves. They get to test drive a company before committing to a full-time job if the possibility presents itself. They’re not locked into the expected loyalties associated with full-time work. They can leave at the project’s end without the job hopper stigma a full-time worker faces when the fit isn’t right.  For some workers, the contingent lifestyle and frequent projects changes put them in the catbird seat. 

In IT, a contingent workforce is commonplace. These professionals often complete a project and already have their next assignment waiting for them when they finish. Those working on the latest and greatest projects do very well. These professionals aren’t being paid the temporary wages of yesteryear either; they are in high demand because of their skill sets and flexibility. Projects can range from a few months to a few years, but hardly the 20 or 30 years of the traditional full-time worker. In fact, the recession and the marketplace seem to have eroded the very thought of getting your 25-year gold lapel pin and plaque at the annual company dinner.

Portable health insurance, long term unemployment payments, the ease that the internet provides in setting up a new business selling widgets or services, and the mindset of today’s worker where the days of being a company guy or gal are for the most part long gone; they all add up to contingent workers actually becoming the norm. Traditional full-time workers are seemingly being relegated to a distant memory.

Remember when a pilot would come out of the cockpit and give wings to the kids on the plane? Remember when a gas station attendant would actually check your oil and clean your windows AND smile (or when there was an attendant for that matter)? Remember when the worker cared about the company they worked for?

While there are pros and cons for both companies and contingent workers; it seems that worker empathy for the mission, value and culture of the company may be headed in the same direction the more the lines between full-time and contingent work are blurred.