If you have recently finished school and are looking for your first job, or even if you are already working but are thinking of shifting paths, chances are you may have already heard of “contingent workers.” What is the meaning of being a contingent worker? Is it for you?
What is a contingent worker?
A contingent worker is an individual who works for a company but does not have a contract that indicates any long-term employment. A contingent worker is not considered an employee of a company because they are not hired permanently. Contingent workers provide their services on a short-term arrangement such as a per-project or temporary task. Once the project is finished, the employer is not responsible for giving them continuous work. Contingent workers can be called back once another task or project arises. Contingent workers can provide their services onsite within company premises or work remotely, depending on the arrangement with the business.
Who are considered contingent workers?
Some examples of individuals who fall into the category of contingent workers are: independent contractors, consultants, freelancers, and temporary workers outsourced through a third-party agency.
How does a contingent worker differ from an employee of a company?
As we have already mentioned, contingent workers are not hired by the company on a long-term basis. Their services are only needed on a per-project or as-needed basis. Because they are not employees, contingent workers do not receive any benefits from the company. Their wages are given in full without any deductions because contingent workers are responsible for processing and paying for their taxes and not the company.
Because of their work classification, contingent workers have more freedom in doing their work using their tools, resources, and equipment. The company has no direct control of how they get the job done because they are evaluated based only on the result that they deliver.
How can you benefit from becoming a contingent worker?
In becoming a contingent worker, individuals have more independence in choosing what to work on, who to work with, and when to work. When you are a contingent worker, you also get the opportunity to build your skills in the direction that you want because you get to select the projects yourself. By making a good impression on companies, they can refer you to other businesses, resulting in more potential projects and a wider client base.
Having the chance to collaborate with different organizations also allows you to learn different insights and be exposed to different work environments. This way, you can have an idea of what kind of organization you would want to be a part of in the future, should you choose to.
How can a company benefit from hiring contingent workers?
Hiring contingent workers can have several benefits for organizations. First of all, it can be cost-effective for companies as they can save on compensation. They only need to pay contingent workers the rate they agreed upon per project. Companies are not required to pay overtime nor provide employee benefits. Companies also are not responsible for withholding taxes.
Also, hiring contingent workers provides companies with more flexibility in adjusting the workforce size as needed. Unlike in hiring permanent employees, companies are free to discontinue engagement with a contingent worker once the project has ended.
Another benefit of hiring contingent workers is access to specialized skills. If the company needs a certain advanced skill that none of the employees have for a special project, hiring a contingent worker will allow them to benefit from their specialized skill. Contingent workers provide a stream of skills and talents for organizations when they need it.
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