What is a Contingent Worker?

Companies today have to be more flexible than ever before. While the markets have always moved quickly, the pace in the digital age has undeniably ramped up. It’s led to decision-makers having to become more creative about who they hire and why.

What is a contingent worker? Contingent workers are not permanent employees of an organization, but instead work on a temporary or contract basis. Contingent workers are hired to perform specific tasks or projects for a limited period of time, and may be brought on board to fill a gap in the workforce to provide specialized expertise or to address a short-term staffing need. Contingent workers may include independent contractors, temporary employees, freelancers, consultants, seasonal workers, and other types of non-permanent workers.


Benefits to Hiring Contingent Workers


Contingent workers can be drawn to their work for a variety of reasons depending on the individual’s needs and preferences. Some potential benefits include flexibility, variety, independence, skill development, increased diversity, and potentially increased compensation for specialization. As many benefits as there are for the workers, though, there are plenty of benefits for the employer as well.


A contingent worker can be someone who works in a skilled trade or requires no training, meaning you’re paying for quality. Instead of having to invest a certain number of hours on training someone — which often defeats the purpose of hiring an employee at a lower hourly rate — you get someone who can jump right into the role.

The focus is not on the process that the person is taking, it’s the results that they produce. So, instead of having to walk someone through the entire game plan and monitor them throughout, you get exactly what you’re looking for without the hassle.


A contingent worker can typically start when you need them to. The right supplier can expedite the search, supply you with a list of candidates, and set up the contract as fast as possible. You can also hire a contingent worker directly. Should the contract go well, you can have a discussion with the worker and then either assign another contract or issue an extension.

This benefit can be a lifesaver when there are skill gaps or hiring shortages. Staffing snags are common in companies, but the ripple effects can be disastrous. One hole in the company can end up crippling multiple departments. A contingent worker can step in on an ad-hoc basis, streamline operations, and keep revenue stable for the company.


While contingent workers may look a little more expensive at first glance, consider how much you’ll save in benefits, retirement costs, and paid time off. Plus, all taxes are managed by the employee, which can save the accounting team and payroll operations some hassle. In addition, contingent workers are non-salary employees. Once the project is done, you no longer have to pay them anymore.


Types of Contingent Workers


In the gig economy, there are more examples of contingent workers than ever before:

  • Independent contractors
  • Freelancers
  • Consultants
  • Temp workers
  • Gig employees
  • Non-payroll
  • Outsourced employees
  • Indirect labor

While there are a number of designations for contingent workers, the IRS largely lumps everyone in the same category. So even if a freelancer traditionally works fewer hours than an independent contractor (on average), the basics remain the same. How you choose to label your contingent workers will likely depend on the nature of the project, the employees you’re planning to hire, and the timeline.


What to Consider Before Hiring Contingent Workers


Compliance & Risk Mitigation to Employment Laws


There are certain companies who will take advantage of contingent workers, which has led to a national debate about how to restructure employment laws. Certain states, like California, have already made changes to regulations. If you want to stay in compliance, you’ll need to know how to stay within the letter (and, ideally, spirit) of the law.


Flexibility for Workers


Contingent workers are ready to get straight to work, but that doesn’t mean there won’t be any unexpected events along the way. Whether it’s an economic change or family tragedy, you’ll want to build in some flexibility to the project. If you’re wholly dependent on one contingent worker, it can be just as debilitating to lose them as it would be a full-time employee.

Few Restrictions on Contingent Workers


While contingent workers can be highly skilled professionals (e.g., software engineers, etc.), they don’t have to be. You can hire people for simple tasks like data entry all the way up to your most complex endeavors. Plus, you can have them work either on-site or off, depending on the needs of the project.

Avoids the Need for Layoffs


It’s unfortunately easy for companies to overestimate the workforce they need, particularly if they’re in a sustained period of growth. Only when it’s in the rearview mirror do hiring managers realize that they overstepped in terms of full-time staff. When you hire contingent workers, your workforce is much more flexible allowing your headcount to change according to the ebbs and flows of your business. 



Contingent workers are there to do their jobs, and they’re used to working under the radar. Ideally, you hire them, they finish the work, and then companies can reassess the next best steps. Of course, this doesn’t mean that you’re entirely hands-off.

You need to know who’s working on different projects, where they are, what their role is, and how many hours they’re putting in. This standardization is critical to getting the job done — whether you’re managing on your own or employing a Managed Service Provider.


Managing Contingent Workers with Monument


If you’re wondering how to fit contingent workers in with the rest of your workforce, sometimes it helps to talk to a specialist. Monument Consulting helps companies navigate the tricky landscape, so no one finds themselves in hot water down the line. We’re here to not only answer questions but ultimately take some of the burden off your shoulders. Contact us today to see how we can help you get more done.