Multiple Ways to Utilize Contingent Workforce During an Economic Downturn

The uncertainties in the market conditions leading to economic crises are challenging for businesses, especially when they lack the right resources and strategies. During such periods, organizations operating in almost every industry try to find and develop strategies in which they can maintain business efficiency by managing financial resources without overburdening their human resources. One of the best strategies to deal with economic downturns at present is the utilization of contingent workers. Individuals seeking to develop their careers as contingent workers usually work as independent contractors or temporary or gig workers, assisting organizations in meeting their short-term business or project needs. According to a recently published article, the number of people working as contingent workers is projected to increase to 86.5 million by the end of 2027. With the continued heating up of the global economy, it is high time for organizations to restrict periodic downturns in their businesses by switching to contingent labor.This article primarily focuses on the top benefits of utilizing contingent workers during economic downturns and the best practices to leverage contingent labor during such situations.

Top reasons to utilize contingent workforce during economic downturns

1. A contingent workforce makes businesses flexible: 

Flexibility is one of the greatest advantages that contingent workers offer businesses during economic downfalls. Based on the fluctuating demands of products or services, businesses can adapt and scale their workforce without facing the pressure of long-term employment commitment or legal or financial repercussions.

2. Contingent workers fulfill staffing needs during peak hours: 

While sailing through the complexities and challenges during economic downturns, it becomes difficult for organizations to maintain a full-fledged workforce. In fact, to save expenses, many employers initiate mass layoffs. Such situations can be avoided when they have a contingent workforce. Organizations can remain fully staffed and get additional hands to support their business during hours of need.

3. A contingent workforce eliminates typical operating expenses: 

Contingent staffing proves to be a valuable strategy for reducing overhead expenses associated with permanent or full-time employment. Contingent labor usually does not have the expectations or demands for additional benefits and perks. By paying them for the hours they work or the tasks they perform, businesses can attain financial stability.

4. Contingent workforce improves retention rate of full-time employees: 

Retention of fixed and full-time employees is a major benefit of contingent staffing that employers often overlook. By deploying contingent workers during peak times or project-specific circumstances, employers can bring a balance to the workload by distributing tasks between temporary and permanent employees. This further reduces burnout and increases the motivation of existing teams, thereby cultivating a sense of loyalty and engagement in them.

5. Contingent workers introduce hard-to-find skills and competencies: 

With a contingent workforce, organizations not only get the benefit of preventing staffing gaps during economic downturns, but they also get the opportunity to bring distinguished skills and knowledge to the teams. Besides that, contingent staffing can connect organizations with a diverse pool of vetted talents from all over the world, enabling them to get the right skills to operate efficiently.

Related read: What is Contingent Workforce Management? – An Ultimate Guide for Employers

Best practices to leverage contingent workforce during economic downturns

1. Identify the critical business areas where contingent workers can contribute

Prior to deploying a contingent workforce in business, employers must understand the exact areas where temporary employees can actually contribute. It is also important to recognize the core business or project goals and evaluate the specialized roles and responsibilities that contingent workers can perform.

2. Make a transition to agile staffing strategies

It is high time that organizations consider taking a break from conventional, direct-hire models and switch to a more flexible and agile staffing approach to set grounds for a contingent workforce. Such an approach will help employers to engage and release temporary employees based on internal business needs or external market conditions with ease and efficiency. This will enable them to easily handle vulnerable workloads during economic downturns without worrying about long-term employment commitments.

3. Reinforce business resilience and adaptability by extending reach to a global talent pool

Rather than entirely counting on internal recruitment teams, employers are suggested to join forces with reliable and expert staffing agencies like Denken Solutions. By plunging into their wide database of pre-screened applicants, staffing firms match organizations with diverse and versatile talents from across the globe who can prove to be efficient in providing the desired support to strengthen business adaptability and resilience. 

4. Provide capital for a meticulous training and onboarding process

Though experienced and professional contingent workers often hold an array of skills and expertise required to master a project, it is suggested that organizations follow a meticulous training and onboarding process for them. This will help them in gaining a thorough understanding of the organization’s goals, objectives, and culture, enabling them to work in coordination with existing staff.

5. Conduct periodic assessments of the contingent workforce

The task of developing a contingent workforce plan during economic downturns continues beyond the hiring process. Organizations need to ensure the performance of contingent workers is assessed periodically and give them proper reviews based on that. The data on their performance and efficiency will further help employers reassign resources and reshape their workforce strategies to cope with economic challenges.

Conclusion

Developing and maintaining a contingent workforce strategy is crucial for businesses to mitigate economic challenges. Besides enabling organizations to remain flexible and fulfill their staffing needs during economic downturns, contingent staffing helps them get hold of hard-to-find skills and competencies. A contingent workforce also helps in eliminating overhead costs and improving the retention rate of existing employees. To get the desired benefits from a contingent workforce, employers must identify and assess the critical areas in their business that need help. It is also necessary to opt for agile staffing approaches, invest in training and onboarding programs, and extend reach to a global talent pool by means of a staffing agency.
Partner with Denken Solutions to get valuable assistance in developing a contingent workforce to address business economic downturns!