Contingent Workers

Contingent workers are workers who do not necessarily have an implicit or explicit contract for ongoing employment and are known as “on-demand” workers (Martocchio, 2017). Part-time employees are employees who work less than 35 hours a week. Organizations hire part-time workers during peak business periods to help minimize overtime pay costs (Martocchio, 2017). Hiring hourly employees eliminates overtime pay, decreases vacation or personal day pay, or they do not get paid holiday pay. Companies can save on costs by adding this type of employee to their organization. Temporary employees are used to temporarily fill in for core employees who are on approved leaves of absence or to offer extra sets of hands when the company’s business peaks (Martocchio, 2017). This type of employee is used for short-term purposes. Independent workers establish their own relationship with organizations rather than through temporary employment agencies or lease companies, and they possess specialized skills that are in short supply (Martocchio, 2017). And telecommuting is an employee who works from home or outside of the organization.

Part-time employees earn less, on average, than core employees yet are expected to do more than their fair share of the work (Martocchio, 2017). Part-time employees also do not receive benefits, but it can vary, depending on the organization. One major issue for part-time employees is that employers are not required to offer insurance such as medical, dental, vision, or life insurance, something that the employee may need (Martocchio, 2017). Temporary employees may find themselves in unfavorable pay situations. Because their work is only temporary, and for a brief period, they do not have time to research how much they should get paid for a job. These individuals, however, do receive overtime pay if they work beyond 40 hours per week (Martocchio, 2017). They too do not receive benefits. Independent workers run into issues where they may not be protected under laws like the ERISA, FMLA, NLRA, Title VII, or the ADA. Telecommuting employees typically are provided benefits that are flexible since they work remotely. Since contingent workers are not considered permanent employees, their compensation and benefits are inconsistent. Money saved by hiring these individuals is used elsewhere within the organization to improve other areas such as employee retention, engagement, motivation, benefits, compensation, training, expanding, or remodeling the organization to name a few. Although the organization is cutting back costs by utilizing these contingent workers, contingent workers may also feel they are being overworked, abused, and underappreciated, and therefore can decrease morale and productivity. Where the organization thinks they are hiring smarter by saving in costs, not providing these individuals with better compensation, benefits, rewards, or incentives can actually decrease their morale where they are not producing the numbers needed for the company to be successful. In cases like this, the company has then wasted time and money in training individuals who are not helping to increase productivity so they must be careful when hiring these workers. Otherwise, it can be extremely helpful when it comes to reducing turnover and increasing morale.

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