Realize Cost Benefits Through Contingent Staffing

Contingent staffing, also commonly referred to as contract or temporary staffing has played an instrumental role in maintaining the dynamism of businesses in a hyper-evolutionary business environment. These short-term employment agreements are different from permanent positions due to their seasonality, project-based nature, consulting engagements, event-based staffing, and so on.

The terms and modes of employment in India and throughout the world have undergone a significant change, especially after the onset of the covid-19 pandemic that introduced employers and employees to new ways of work and engagements. In an era where gig work has become a household term, contingent or contractual staffing needs to be embraced more by business stakeholders and decision-makers. Adopting this mode of employment not only makes businesses more scalable but also more agile and efficient.

The Growing Acceptability of Contractual Employment in India

The Indian workforce is gradually embracing the contractual employment model, driven by the changing dynamics of the job market and the evolving needs of both employers and employees. With the rise of remote work, digitalization, and the gig economy, contractual jobs are becoming more mainstream. This trend is particularly evident in industries such as IT, E-Commerce, BFSI, Consumer Retail, and Manufacturing, where the demand for specialized skills and workforce adaptability is paramount.

What are the benefits of contingent staffing?

Let us explore some of the key cost-saving benefits of contingent staffing that enable businesses to keep thriving no matter how volatile the landscape becomes.

Labor cost control

Contingent staffing infuses unmatched adaptability and adjustability into the business based on its needs and goals. Depending on the workload fluctuations and variations, businesses can enjoy the freedom of adjusting their labor costs during lull phases or periods of low demand. As opposed to regular staffing, this ability to adapt the workforce size as per their needs allows businesses to save major chunks of their labor costs.

Benefits-related savings

Need-based short-term hiring also comes with fewer strings than regular employment agreements. Contingent staffing agreements are usually devoid of added costs on the company’s part such as insurance, payroll taxation, retirement benefits, and other monetary benefits. This allows businesses to allocate their resources better and on more critical issues that propel them toward their goals.

Low time and cost-to-hire

As mentioned above, hiring is becoming an expensive affair for businesses across the board. Contingent staffing allows businesses to swiftly fill vacant positions, saving recruitment expenses and enabling businesses to maximize their capabilities without experiencing hiccups in their workflow.

Training and skill development cost reduction

Since contract workers are hired based on their skill sets and short-term business needs, they seldom require training and skilling initiatives from the company’s side. These employees come well-adept in their areas of expertise and help businesses save financial resources on training and development. Even when they do require training, it’s minimal and does little to drain the finances of a business.

Efficient cost control during unavoidable circumstances

The business landscape today is more unpredictable than ever. Geopolitical situations, macroeconomic conditions, and health emergencies, the world has seen it all in a matter of a couple of years. All of these put businesses in strenuous situations where they have to be farsighted in their approaches and strategies in order to mitigate future risks. This also brings in the added responsibility of being strategic about expenses. While regular employment agreements may be hard to navigate during such situations, contingent staffing offers flexibility to adapt to uncertainties in the market or the business.

When is a good time to go for contingent staffing?

Now that we have gone over the manifold ways contingent or contract staffing, let’s find out who it is most suitable for and when businesses ought to opt for contract staffing services. While the benefits of contingent staffing speak for themselves, there may be slight apprehensions or differences in opinion faced within organizations when it comes to adopting this approach to staffing. I hope the below section will help you figure out whether it can come useful to your business.

During cost optimization phases

With time, contingent staffing has emerged as a viable strategy to optimize staffing and business costs. The lack of overhead costs, long-term commitments, etc. enable businesses to use their resources wisely for more immediate and crucial causes. Whenever a company finds itself in a period of cost optimization, contingent staffing can be a great workaround to strategize spendings judiciously.

When new projects are initiated

Piloting projects means new opportunities, challenges, viability, and more. This is an opportune time to look at contingent workers. As contract workers bring their skills to the table, they can be leveraged to do the testing and trying without sacrificing work hours of regular employees which can be utilized in more crucial tasks at hand.

When skill gaps are faced

As businesses scramble for top-tier talent, the dearth of skilled professionals becomes ubiquitous across organizations. Closing the skill gaps efficiently takes time and in the meantime, company productivity and success may take a toll. This is when contingent staffing comes in immensely handy. It not only closes the skill gaps quickly but also allows employers to keep scouting for the right talent without letting job openings linger and productivity lower.

During unpredictable economic and business conditions

Unpredictability, as addressed before, runs deep within the business and economic landscape throughout the world. Companies today are in dire need of flexibility and enhanced adaptability in order to keep up with the hyper-dynamic environment. Contingent staffing provides unparalleled flexibility with respect to workforce management while keeping costs under control and can be leveraged to tackle uncertain times.

Conclusion

Contingent staffing is gaining momentum rapidly both in India and worldwide, offering unique benefits and opportunities for employers and job seekers alike. Understanding the intricacies of this employment mode is essential to make informed decisions and thriving in the evolving job market. By leveraging the flexibility and access to specialized skills that contractual jobs provide, employers and job seekers can benefit from the dynamic and ever-changing landscape of the Indian workforce.

Harshal Goyal

Vice President, Talent Solutions- Staffing, RPO & Perm