The Contingent Labour Paradox – Are They “Just Like Staff” Or Not?

Last week we launched a brand new briefing paper titled "Total Talent Management and the Contingent Workforce Paradox".  This is sponsored by Fieldglass, the leader in VMS systems (used to manage contingent labour and related services spend areas), but like all our papers it is written from an independent standpoint.

The contingent (temporary, interim, whatever you want to call it) workforce for most organisations is growing, so a greater percentage of the people who work in effect within the organisation are not permanent staff. Yet it is driving a paradox. Organisations are realising that in many ways, they need to consider the contingent workforce in a similar manner to how they manage internal staff; yet the contingent workforce is different, not least from a regulatory, taxation and legal point of view.

So in this short paper, we look at both the similarities and the differences between managing the permanent and temporary workforce as we consider “total talent management” (TTM).  Here is an excerpt; do download the whole paper here, free on registration.

Total Talent Management and the Contingent Workforce Paradox

Confusion and Paradox

That point about risk leads adds to the confusion around managing the contingent workforce. Many line managers look at it as simply hiring a person: “that is the person I want, and I can get them quicker as a temp than as a permanent employee.” The manager may not carry out much in the way of due diligence on the worker, with speed often being of the essence and driving the process. But once the individual is in place, the contingent worker is then treated very much as a core member of the workforce.

Now, as discussed earlier, it is good in some senses to manage contingent workers using some of the parameters also used for permanent staff. But there are dangers as well. Many countries have strict rules and regulations in terms of the differences between an employee and a contingent or temporary worker. There are often different tax implications and treatments for example, applying to both the individual and the employing organisation, and hiring managers who disregard these issues can cause serious problems for their organisations.

To complicate these matters further, regulations vary across countries. Even in Europe, where in theory much regulation should be harmonised at EU level, there are different national regulations (covering tax, employment rights, the process for dismissals and so on) regarding temporary staff and the status of individuals working in that manner.

The definitions of what makes an individual a genuine contractor or contingent worker are also complex and somewhat vague. When the authorities consider the status of an individual, they may look at factors such as:

  • how long the worker is engaged on a particular assignment;
  • whether the worker has multiple clients;
  • how much freedom of action they have, can they sub-contract for instance;
  • the level and nature of supervision, direction and control over their work; and
  • where they work, and who provides any equipment they use.

(Read on by downloading the paper here!)

 

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