SWP blog

Unlocking Agility and Competitiveness: Integrating Contingent Labor into Strategic Workforce Planning

In today’s fast-paced and ever-evolving business landscape, organizations are constantly challenged to stay ahead of the curve. With technological advancements, market shifts, and unpredictable global events, the need for agility and competitiveness has never been greater. 

Strategic workforce planning has emerged as a critical tool for organizations to navigate these challenges successfully. However, to truly achieve agility and competitiveness, it’s worth exploring how to integrate contingent labor into this planning process.

The Contingent Labor Market in 2024

Contingent labor, including freelancers, contractors, and temporary workers, has become increasingly prevalent in the modern workforce. According to McKinsey, 36 percent of the workforce self-identifies as independent workers.

According to Eightfold AI, contingent workforce participation in the US is expected to increase by 16% in 2024. Use of contingents is already widespread at global firms, with 80% of those surveyed by Staffing Industry Analyst saying their organization already uses contingents.

There are challenges and opportunities when it comes to integrating contingent labor: 

  • 70% of executives said they are somewhat or strongly challenged when integrating contingents into their workforce
  • 44% said finding contingent workers with specific skills is a difficulty.
  • In November 2021, the U.S. reached an all-time peak in voluntary turnover, and although it’s been declining recently, it still hasn’t reached pre-pandemic levels.

To harness the full potential of contingent labor and ensure organizational agility and competitiveness, it’s essential to incorporate them into strategic workforce planning from the outset. 

The Benefits of Incorporating Contingent Labor into your Workforce Planning

There are a few reasons why it’s so important to consider modifying your workforce to incorporate contingent workers: 

  • Understanding Future Skill Needs: Strategic workforce planning involves forecasting the skills and talent required to achieve business objectives. By integrating contingent labor into this process, organizations gain a comprehensive understanding of both permanent and temporary skill needs. This enables them to identify gaps, anticipate future demands, and proactively address talent shortages or surpluses.
  • Flexibility in Talent Acquisition: In today’s dynamic business environment, the ability to quickly adapt to changing market conditions is paramount. Integrating contingent labor into workforce planning allows organizations to create a flexible talent acquisition strategy. They can leverage contingent workers to fill immediate skill gaps, respond to fluctuating demands, and access specialized expertise without committing to long-term employment contracts.
  • Cost-Effective Solutions: Contingent labor offers a cost-effective alternative to traditional hiring models. By incorporating contingent workers into strategic workforce planning, organizations can optimize their workforce mix to achieve the right balance between permanent and temporary employees. This not only helps in reducing overhead costs but also enables better allocation of resources based on project needs and timelines.
  • Enhanced Innovation and Creativity: Diversity of thought and experience is essential for driving innovation and creativity within organizations. Contingent workers bring fresh perspectives, diverse skill sets, and industry knowledge from their varied experiences. By integrating them into strategic workforce planning, organizations can tap into this pool of talent to fuel innovation, solve complex problems, and stay ahead of competitors.
  • Mitigating Risks: In today’s uncertain business landscape, mitigating risks is a top priority for organizations. By incorporating contingent labor into strategic workforce planning, businesses can diversify their talent pool and reduce dependency on a single source of labor. This helps in mitigating risks associated with talent shortages, sudden market shifts, or unforeseen disruptions, ensuring continuity of operations and business resilience.

Video – Learn how Broadleaf Results works with your business to help you manage contingent labor contracts, payments, and more

How to Develop an Integrated Contingent Labor Strategy

If you are curious about what it would look like for your organization to explore contingent labor workforce planning, here are some easy steps to get started:

  1. Identify Your Needs: Assess your organizational needs to determine where contingent labor can be most beneficial. Identify roles, projects, or tasks that could be efficiently handled by temporary workers.
  2. Develop a Recruiting and Onboarding Process: Create a comprehensive strategy outlining how you will integrate contingent workers into your existing workforce. This should include guidelines on hiring, onboarding, and managing these workers.
  3. Streamline Processes: Simplify and expedite your systems and processes to accommodate the faster pace required for bringing on and integrating contingent workers. Consider implementing technology solutions to facilitate this, such as: 
  4. Establish Clear Contracts: Develop clear and concise contracts for contingent workers, detailing their roles, responsibilities, duration of engagement, and compensation terms. Ensure compliance with labor laws and regulations.
  5. Foster Inclusion and Engagement: Integrate contingent workers into your company culture to foster engagement and productivity. Provide necessary resources, training, and support to help them succeed.
  6. Partner with an Experienced Firm: Collaborating with a recruiting firm can streamline the process of sourcing, screening, and onboarding contingent workers. Reputable firms have access to a vast network of qualified candidates and can help you find the right talent quickly and efficiently.

Integrating contingent labor into strategic workforce planning is essential for organizations aiming to achieve agility and competitiveness in today’s dynamic business environment. 

By understanding future skill needs, creating flexible talent acquisition strategies, and leveraging the diverse expertise of contingent workers, businesses can position themselves for success in an ever-changing marketplace. Embracing contingent labor as an integral part of workforce planning is not just a trend but a strategic imperative for organizations looking to thrive in the digital age.

Related blog – 5 Tips to Keep Your Contingent Workforce Engaged

This blog was authored by Joseph O’Shea.