Contingent labor is emerging as a critical talent pool helping companies stayÂ flexible and resilient as the market rebounds from the pandemic.
By Marta Chmielowicz
Contingent labor has been critical to many organizationsâÂ talent strategies for years, but the COVID-19 pandemicÂ has forced employers to rethink their approaches.Â As companies have coped with extended lockdowns,Â shifting consumer demand, and historic levels ofÂ unemployment and economic uncertainty, many areÂ turning to temporary labor to fuel their recoveries. ButÂ to succeed and come out of the pandemic with greaterÂ flexibility and resilience, new talent procurement andÂ management strategies are essential.
A Snapshot of the Labor Market
The U.S. unemployment rate soared from 3.8% inÂ February 2020 to 14.4% in April 2020, with serviceÂ occupations hit the hardest. While unemployment hasÂ since begun to drop as economies start to reopen, manyÂ organizations are still relying on temporary workers toÂ fill roles quickly. According to research from Mercer,Â more than 70% of HR leaders believe that the staffingÂ industry will recover after the pandemic.
Overall, the number of job postings for contingentÂ workers has declined, with a survey from Bullhorn indicating that 80% of staffing and recruitingÂ organizations report fewer open requisitions fromÂ their clients. However, certain industries have seen anÂ increase in COVID-19-related occupations to combat theÂ pandemic.
Healthcare, pharmaceuticals, e-commerce, foodÂ processing, and logistics and distribution have allÂ experienced increased demand for contingent laborÂ during the pandemic. In particular, Mercer reports thatÂ demand has risen significantly for traveling nurses, food deliveryÂ services, and jobs that require moving, packing,Â and loading skills. By contrast, hospitality and cateringÂ have declined significantly over the past several months.
The Impact of Remote Work
The onset of COVID-19 forced companies across theÂ globe to shift to remote work. These arrangementsÂ included contingent as well as full-time employees;Â during the pandemic, 81% of companies asked theirÂ temporary workers to work remotely. And the trend isÂ expected to continue: 64% of staffing agencies agreeÂ that remote work will continue after the pandemicÂ and that contactless recruiting will be more prevalentÂ (57%).
The shift to remote work has increased the size of theÂ available talent pool, giving employers the freedomÂ to leverage technology to access the best candidatesÂ regardless of geography. Many companies are relyingÂ on online talent marketplace platforms like Freelancer,Â which saw job postings grow by 25% in the secondÂ quarter of 2020 compared to the first quarter, withÂ 41% growth year-over-year.
Companies that wish to remain competitive in theÂ new contingent labor landscape will need to considerÂ different sourcing strategies, including direct sourcingÂ marketplaces and vendor management systems.
However, moving from location-based contingentÂ talent pools will increase risk and cost burdensÂ for employers. Companies will need to implementÂ cybersecurity measures to protect the intellectualÂ property and personal information of employees;Â invest in new onboarding technologies to engageÂ temporary workers; and implement processes toÂ monitor the current tenure of their temporary workers,Â focusing on temp-to-permanent conversions.
By modernizing their contingent labor policies,Â organizations can build flexibility into their talentÂ strategies and become more responsive to changingÂ conditions as the economy recovers. With less certaintyÂ of future demand, employers are likely to continue toÂ rely on their contingent talent pool instead of full-timeÂ workers to meet shifting labor needs.