Contingent workers are defined as freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a per-project basis. They can work on site or remotely. However, they are not simply temp workers—this discounts the high-value nature and complexity of today’s contingent workforce.
Contingent workers are not salaried. They do not receive benefits. They are responsible for their own taxes as they work for themselves—not the company. Therefore, the company is not responsible for deducting federal and provincial taxes, CPP, or EI.
Contingent workers also have more control over their own work than employees of a company do. They aren’t told how to complete projects or when to work. The company’s focus is not on how the work is completed but rather on the results.
Advantages of a Contingent Workforce
For business owners, the advantages of a contingent workforce are mostly financial. They do not have to collect and pay taxes from the workers’ pay cheques. They don’t have to offer health benefits, provide paid sick days and vacation days or pay for overtime. This not only saves them significant money associated with recruiting and hiring permanent employees, but it also allows them to save on administrative costs associated with payroll and human resources, too.
Another added benefit of the contingent workforce is increased flexibility. When an influx of work arises or a sudden urgent project comes up, a contingent worker can be hired to perform the extra work. But once business slows down again, the business owner is not stuck paying a salary for a worker that isn’t vital to the organization, which is especially important in a fragile economy. There is no need to lay off workers when you have a contingent workforce.
Access to expertise is another advantage. Business owners can find the skills and experience they need for a specific project in a contingent worker that they cannot find internally. Businesses get to access a growing pool of highly qualified talent to ensure that work gets completed properly.
Also Read: What Is Contingent Employment
