Contingent and on-demand workforce – what’s the difference?

What is contingent workforce?

Contingent workforce is a term for the workers who are not permanently employed. They are rather hired by a company on a temporary or project-based basis. 

They are typically hired short-term to fill specific roles or complete specific projects. Because of this they cannot rely on a certain number of hours or a long-term position with the company. Because they are typically managed and paid by the company, they may be eligible for certain benefits and unemployment insurance.

However, they are never considered to be permanent employees of the company. And they do not receive the same benefits and protections as full-time employees.

Illustration of three staff members from a service industry

There are many ways to deliver contingent work, for example:

  • Freelancers.

    These are independent workers hired to complete custom tasks or projects for the company. They usually work on a short-term or project-based basis.

    Freelancers may work in a variety of fields, including writing, graphic design, and programming. Usually they get paid based on the hours they spend on a given task.
  • Independent contractors.

    These are workers who are hired to provide their professional services to a company. They, too, work on a temporary or project-based basis. Electricians, corporate trainers and photographers are good examples of an independent contractor. Usually independent contractors get paid based on the scope of the service they provide.

Both freelancers and independent contractors are typically self-employed. This means they send out an invoice from their company once the work is complete.

  • Temporary workers

    These are workers hired to fill in for full-time employees who are on leave. Sometimes they come in to handle temporary increases in workload. Temporary workers are often (but not always) hired through staffing agencies.
  • Seasonal workers

    These are temporary workers hired to meet an increased demand for a company’s products or services. The reason could be could be peak holiday season, a large commission from a client, or an unexpected global event. All of these can put a company’s products or services high in demand.

Temporary and seasonal workers are usually hired and paid directly by the company. 

How do companies manage contingent workers?

Companies typically hire and manage contingent workforce using a combination of internal processes and specialised software tools.

The specific policies and procedures in place for managing contingent workers may cover things like

  • how to hire and release workers
  • how to pay and manage their work
  • how to provide them with the necessary tools and resources to do their jobs.

In addition to these internal policies, companies may also use specialised software tools to manage their contingent workforce. These tools can help companies to track and manage workers’ hours, assignments, and pay, as well as to communicate with them and monitor their performance.

Some examples of contingent workforce management software tools that companies may use include:

  • Time tracking and project management system, which can help companies to monitor and manage workers’ schedules, hours and assignments.
  • Payroll and invoicing software, which can help companies to process and pay workers’ wages and expenses.
  • Communication and collaboration tools, which can help companies to stay in touch with workers and share information and resources.
  • Performance management software, which can help companies to evaluate and monitor workers’ performance, and to provide them with feedback and support.

What is on-demand workforce?

On-demand workforce is a specific type of contingent workforce. These are workers who are available to start work at a moment’s notice. This type of workforce is often used by companies to quickly meet changing business needs.

Having access to an on-demand workforce allows companies to easily find and hire workers when they need them. And workers will have more flexibility and control over when and where they work.

On-demand workers are typically paid on a per-task or per-project basis, just like independent contractors. On-demand workers do not receive a regular salary or an hourly wage. 

On-demand workers can be hired and managed…

  • through a third-party platform or gig economy app that connects on-demand workers with companies that need their services. 
  • by a staffing agency that recruits and facilitates on-demand workers to their client companies  
  • by the company directly

What is the difference between contingent and on-demand workforce?

The main difference between these two types of workforce is that: 

contingent workforce is typically…

  • hired for longer-term projects or assignments, 
  • managed and paid by the company that hires them

on-demand workforce is typically…

  • hired for shorter-term, immediate needs
  • managed and paid by a third-party platform or an agency.

What we can do for you

Are you a staffing agency looking for on-demand workforce management software? Or a company looking for an easy way to manage on-demand staff in-house? Zelos is a perfect app for contingent workforce management.

Get in touch with us for further information about how we can help you with on-demand staffing.