The contingent workforce encompasses all workers who are employed on a fixed term or project basis rather than on a traditional permanent model. Flexible workers such as freelancers, independent consultants, contractors, part-timers, on-call workers, or anyone in any other type of alternative work arrangements make up this labour pool. This workforce is rapidly growing on a worldwide scale, it is anticipated to have increased in size by 34% during 2024-and in the US alone, 40% of the entire workforce are contingent (US Labour Report 2024).
"This workforce is rapidly growing on a worldwide scale, it is anticipated to have increased in size by 34% during 2024-and in the US alone, 40% of the entire workforce are contingent."
This is a result of various developments, let’s look at those now:
We’re getting higher tech!
Technologies continuously evolve which creates a constantly updating set of in-demand digital skills. This leaves companies with a skills gap that, more often than not, their current workforce can’t be upskilled fast enough to bridge. In turn, this has created an upward trend to draft in contingent workers to deliver niche skills whilst retaining workforce flexibility.
A generational shift
As the need for companies to replace their aging workforce comes around, new hires will inevitably be Millennials and Generation Z who will soon make up the largest part of the global workforce. This shift comes with a different set of desired work expectations such as flexibility, time to pursue other interests, the ability to work from anywhere and development opportunities. In the LiveCareer study (2024), these generations reported flexibility as a role expectancy with 76% of Millennials and 69% of Gen Z expressing this. This priority switch creates drive towards contingent labour in contrast to traditional roles.
Uncertain times
Finally, periods of economic uncertainty such as the Covid 19 pandemic and the cost of living crisis in recent times have been a wakeup call to companies to invest in making their workforces agile and resilient. These circumstances have served to reiterate the importance of having a workforce that is adaptable to the constantly changing internal and external circumstances that all organisations face. Engaging a contingent workforce allows companies to remain flexible and to offset the risk of uncertain times. The nature of contingent work therefore can be a win-win situation for both companies and their contingent workers as they mutually strive for flexibility, productivity and efficiency.
According to a recent LinkedIn study in 2023, 65% of global company owners surveyed had the expectation of increasing their use of contingent workers by 2025. With all the benefits that a contingent workforce has to offer, it’s not a surprise that this is the trend that we are observing currently. However, it is important to also take into account the risks that can be involved, look out for our next blog that will guide you through them!
