One of the trendiest terms since the beginning of the COVID-19 pandemic, contingent staffing is the process of hiring temporary employees, also known as on-demand workers, to fulfill the current needs of your company. Then you can matchmake their skills to issues that require attention or extend the reach of your organization. Many organizations depend on contingent workers, from catering companies hiring extra chefs to deal with large orders to advertising agencies hiring freelance designers to create graphics.
Flexibility is a core challenge for all entrepreneurs. From fluctuating opening times to product availability, being flexible allows you to reduce costs and become more efficient. This is a rising strategy secret for many companies with their human resources. As many large companies have already proved, choosing a flexible HR strategy for their business model is a great way to mitigate business risks. Instead of hiring a huge number of workers (and have the payroll pains that come with it), companies with on-demand staffing can work with known and trustworthy people only for the hours they are needed.
The expression “it takes a village” takes a life of its own with on-demand staffing, as it involves creating and managing a community of people who are involved in the operations and growth of a business. This flexible work relationship benefits both businesses and contingent teams, states workforce writer Julian Mackie.
“Contingent work can provide immense value to individuals as well. Contract-based jobs can often mean higher pay while offering flexibility to those looking to take on a second job, pursue a passion project, or care for a family.” says Mackie.
Getting started with on-demand hiring can be daunting, so we have drafted a guide to help you figure out if hiring contingent workers is the right move for your company and how you can make it work.
The basics of contingent staffing
Contingent staffing requires business managers to become flexible (which is super helpful considering we don’t know what the future may bring). Being adaptable and having the possibility of growing or reducing their workforce helps both managers and businesses become more agile at dealing with problems that arise on the go. Tosho Trajanov, Forbes Council Member, explains why on-demand staffing is key for companies nowadays:
“When hiring external talent, startups can quickly scale up and scale down, depending on project demands. Hiring exceptional talent is often challenging, especially if it’s full-time. However, many expert developers are more willing to join a company on a short-term project basis.” he states.
And if the project goes well. it’s extremely likely that the same contingent worker is excited to collaborate with you another time as well.
If you were the manager of a company with on-demand staffing, a regular day would start with posting available work onto the platform where you manage your contingent workers. Your job posts for contingent workers should provide clarity and specifics such as the date, time, compensation, payment terms, and requirements to finish the task at hand. Potential applicants reply directly to your post, you approve who is doing the job, and then the selected person does the task and reports back to you when it’s done.
Once everything is said and done, you pay for the work the temporary worker has completed according to the rate agreed. A single employee can take on more than one job at the same time or dedicate fully to just one task, which allows them to self-manage their own workload. Payment is then done according to the jobs or hours workers have done, which allows managers to budget their payroll expenses according to what they need to be done.
Exactly like it works on the large gig platforms – but now it’s just people you already know!
Not sure if on-demand staffing is right for your business? Read below and learn the pros and cons of working with flexible staffing.
Pros of contingent staffing
Less payroll expenses
Managing your own on-demand staff allows you to save money on a fixed payroll. Additionally, you can save in head hunting and temp work agency fees since you will be creating your own community of reliable workers. Sometimes the fee for hiring a temp work agency may be absurd for a small businesses since they only need a small amount of workers. In other words, if the number of workers you need is below what justifies the agency fees, then managing the on-demand staffing yourself is the right move for you.
Better communication
It’s not uncommon for details to get lost while working with an intermediary, since they have so many different companies vying for their attention. If clear, direct communication is key for your business, managing your own on-demand workforce is better than hiring an agency to find workers for you.
Personal touch
In a world full of Zoom meetings, sometimes we miss the small talk around the water cooler. Building rapport while hiring and working remotely is hard, but can become almost impossible if there is another intermediary in between. Managing your own on-demand workforce allows you to start building a relationship with your contingent workers from Day 1, while also making it easier and faster to give feedback.
Payment transparency
Make sure your budget pays real work and not just admin fees. Staffing agencies sometimes charge both companies and freelancers. Managing your own on-demand staff (essentially, running your own staffing agency) allows you to avoid the fees on both sides and you can invest that extra money on paying more to your freelancers, or commission more paid hours.
Network building
Community-led growth is key for companies working in unstable or seasonal markets. Start small, start today and build your own community of freelancers through on-demand staffing. A network of useful contacts gives you the security of being able to source skills (and even full-time employees!) whenever you need them.
Control of results
You cannot avoid systemizing processes and results with an on-demand staff. On-demand staffing guides your managers to implement actual processes and stop being vague. At first it may be a challenge to tandardize how people get their tasks to the way in which they receive feedback. But once in action, you will enjoy the low maintenance of a self-sustaining system. An example of this is the way most restaurants work nowadays, filling shifts and roles from a pool of employees that are familiar with the premises. With regular trainings and updates for the whole family the restaurant keeps the service level at required quality regardless of who is working at the moment.
Customized human resources and communication
Creating your own on-demand team includes customizing the way work is handled (which can be a breeze by using flexible team solutions like Zelos 😉). Need extra checkpoints? Add them to your task description! Need skilled workers for a task? Notify only those who have that skill! Need extra hands? Add more workers to a single task! This level of customization may be not viable while using a temp work agency, or would require you to pay additional fees.
Instant results
It is not uncommon to have to wait for employee placement when collaborating with agencies. When time is tight and the need for extra help may come in last moment, it is much more practical to have your own team of on-demand staff to support your day to day. You can respond to crises faster and find an extra pair of trustworthy hands in hours if not minutes by reaching out to your own network of temporary workers and freelancers.
Finding the right people for you
Creating your own community of workers will allow you to create a team of people you trust and know will get the results you want. Keeping the right people close to your company means building a family that cares – and therefore gives reliable results, fits your company culture, and knows how to collaborate with you. This will also lead to a more enjoyable management experience for you!
Cons of contingent staffing
Time-consuming
Managing an on-demand team can be a lot of work for a small business owner who is involved in many areas of the company. Days only have 24 hours after all! Payroll, feedback, and overall management operations definitely increases in volume with an on-demand team. Businesses with a dedicated HR manager should have less problems adjusting to contingent workforce, since they have the expertise to deal with specifics of people management.
Need to screen applicants
If your contact network is too small to create an on-demand talent pool, screening new applicants will become a necessity. This will require you to promote an open call for freelancers, and then screen those who are the right fit for your community of contingent workers. Finding true talent can sometimes be akin to finding a needle in a haystack, so patience will be key until your on-demand team is large enough for you to stop recruiting.
Payroll woes
Payroll can turn into a nightmare for managers not experienced with flexible workers. Whether you’re requesting invoices or paying taxes, every month will be unique since the volume of hours and jobs will fluctuate from week to week. To avoid payroll mishaps, it is advisable to keep track of the jobs done by every freelancer and be sure to agree on compensation details from the start.
Lack of knowledge
Anyone managing an on-demand workforce needs to be aware of the work regulations regarding flexible workers, no excuses. This can get quite tricky, since regulations have been changing constantly in the last few years. It is best to hire experts to help you clear the legal aspects of an on-demand team and create contracts you can re-use with a variety of tasks.
Depending too much on independent workers
Having a team of trusted freelancers may cause you some bias to try someone new. Sticking to a few loyal collaborators is certainly a comfortable option, but it makes the business vulnerable and dependant on that person. expand your community with new freelancers occasionally so you don’t depend on the availability of a single worker.
People skills are needed
Most business owners are not professional recruiters and may find the task of recruiting an on-demand team to be stressful. Communicating and collaborating with multiple people flexibility and people skills not everyone has. If this is the case for you, try to delegate the people management tasks to someone with HR skills so you can focus on the ones you excel at.
How to setup a contingent workforce
- Make a list of things you can delegate in your business.
Check your workflows and daily routines and see which jobs you can easily delegate to your external workforce. While your internal team focuses on key activities, your contingent workforce can take care of routine tasks such as data entry and document prepping. You can also balance the workload of your internal team by sharing the responsibility with the external workers. Extra hands are alway appreciated during rush times!
- Map out skills the skills of the external workers who can help with the workload
Using the list of tasks from the first step, create job descriptions for the people you need to have in your contingent team. No freelancer is master of everything, so having these personas can help you to know if they can be up to the job,
- Evaluate the volume of work you want to delegate
Once you have the tasks and profiles determined, calculate the amount of hours or number of activities in which you will need support. This will help you with both budget and management once you start working with a contingent team.
- Make a guess on the number of collaborators you want to hire
Since your additional staff will consider your tasks as an extra gig or may not be available at all times, be sure to overestimate the number of people included in your contingent workforce. It’s better to have more contacts than too little!
- Decide on a workflow method
Depending on the number of tasks and people in your contingent team, choose a task and communication strategy. Micro companies can start with pen and paper, but bigger teams may need to onboard everyone into a productivity app (like Zelos!).
- Create a clear workflow
Make sure that your contingent workforce has everything they need: write clear work instructions and work descriptions, have contract templates ready, specify your payment terms. Make sure your external collaborators can access these documents and can find them easily.
- Start recruiting!
Publish in all your networks that you are looking for contingent workers, using the profiles you wrote before. Ask for referrals! Your contacts may know great people who can help and are available to do small jobs.
- Onboard successful recruits to your workflow
Introduce your new contingent workers individually or in groups: make sure to mention how your company works, explain how they can pick up and do tasks, and answer any questions. Then, you’re ready to start engaging recruits with tasks!
- Check in with everyone on a regular basis
Make sure to take care of your flexible staff by checking in. Go over new and old information about your workflow and answer questions about it. If you’re making key changes, communicate them instantly. Gather smaller changes for a weekly or monthly summary which will remain available for those who couldn’t attend or need it for future reference.
After all is said and done, on-demand staff management is a necessary reality for many modern businesses in a variety of industries. By starting your own on-demand team, you can expand the capabilities of your company while also having access to a larger skillset. And although it has its own challenges, flexible staffing comes with a lot of benefits for companies that are looking to reduce payroll costs while keeping or even improving their everyday results.