Why Companies Are Increasing Their Use of Contingent Labor

Ardent Partners is an analyst firm focused on corporate procurement and as part of this brief they research and analyze the use of contingent labor (temps, contractors, consultants, etc.) by corporations.

The article The Contingent Workforce Management Program of 2016 provides their view of how corporate contingent labor programs will evolve over the next couple of years.  

A major finding of their research shows the use of contingent labor by corporations has substantially increased over the past 5 years. Key quote from the article:

In 2009, the estimated percentage of contingent workforce utilization within the average enterprise hovered around 16% or 17% ... The contingent workforce of 2014 is a force to be reckoned with, as Ardent Partners estimates that upwards of a third (32%-33%) of the average total workforce is comprised of contract talent.

And according to their research report The State of Contingent Workforce Management 2014-2015 this growth is going to continue.  Key quote from the report:

Ardent predicts by the end of 2017, nearly 45% of the world's total workforce will be contingent ...

Even more interesting is why companies are expanding their use of contingent labor.  As the chart below (from the research report) shows, the key reasons are to tap into the skills and talents of contingent labor.  

This is a fundamental shift from past years, when most companies turned to contingent talent to reduce costs.

This shift - coupled with the growing recognition by hiring corporations that contingent labor is becoming a strategic HR issue - are key reasons we're forecasting the continued growth of the independent workforce.

Comments

[Marika @ RadiumCRM]

Thanks for the information.

For the past few years I have felt the strong shift of salaried employees to contract. While I don't see it as a negative, I am concerned for continuity. With my experience with contract workers there is always a training period where you attempt to bring them up to speed on the project and methods of a company.

What I wonder about is what people will be kept on board at all times to make sure things aren't missed and what process will be put in place to ensure that quality is maintained.

-Marika
http://www.radiumcrm.com