A contingent worker is someone who works for an organization without being hired as their employee. They are typically paid on a per-project basis and once the assignment is completed, their tenure with the business ends. Contingent workers may provide their services under a contract, temporarily, or on an as-needed basis. Examples of contingent workers include independent contractors, freelancers, consultants, and temporary workers employed by a staffing agency or other third party and assigned to work for your organization.

Contingent workers are not employees and, therefore, do not receive the same rights and benefits as permanent employees. They are not added to the organizations payroll and are not paid salaries or provided benefits such as health insurance and retirement plans as they would an employee. Contingent workers are in charge of their work schedule, how to carry out tasks, and where to carry out given tasks. Therefore, they may choose to work on-site or remotely, and can even choose work days or hours.

Businesses that utilize freelancers can quickly scale their workforce up or down as needed, which can be especially beneficial when expanding business operations into new markets. By engaging contract workers, organizations are able to be agile and save costs. The contingent workforce acts as a variable workforce for companies to select from to perform specific projects or complete specialized projects. However, there is risk involved in avoiding costs if an employee is improperly classified as a contingent worker.

Advantages of using contingent workers include:

• Specialized skills and flexibility in terms of when, where, and how they work
• Ability to quickly scale the workforce up or down as needed
• Reduced training costs

Disadvantages of using contingent workers include:

• Less job security
• No benefits such as health insurance and retirement plans
• Risk involved in avoiding costs if an employee is improperly classified as a contingent worker