The purpose of this memorandum is to inform you about the various underlying concepts associated with Contingent Workers.
Implication of Contingent Workers
The major force that has inclined the concept of contingent worker is based on the willingness of organizations to cut expenses and the changing working style needs of the workers. The first benefit for the organization when it gets a contingent worker aboard is the attraction of saving money. In a multitude of organizations the demand for workers is seasonal and hiring more employees for peak seasons does not make sense. To rescue such situations, the idea of contingent workers helps to keep the organization competitive. In myriad small to mid-size company, the organizations require a decent website and a working computer network. While this is a specialized job that can be done by an IT expert, but the company cannot afford a separate human resource for it. For this purpose, the company hires a freelance resource that helps build the IT function of the organizations.
The organizations spend a huge chunk of their earnings on payment employee related benefits and taxation. This special payments is primarily sheer unfeasible for small and mid-size organizations, which forces them to lookout for contingent workforces. Company hire human resources on short-term contractual or consultancy basis (Amman, 77). The organizations in this way are able to save huge cost associated with the employee benefits.
One of the major inclining force behind the trend towards contingent workers is the due to the fact that young employees have develop a new sort of lifestyle. They do no prefer working in fixed timings and fixed environments. The wireless technologies have allowed individuals to work beyond the conventional limits. The recent freelancing trend through online websites like Odesk, Freelancer, and Elance have completely changed the traditional earning model. People from design, content writing, architectural, and law background work distantly in unconventional environments and without time slot restrictions. As this is commonly entering into the American culture the organizations are now required to adapt to these changes. Now even a personal assistant is available virtually from complete different part of the world.
The notion of contingent working poses a serious threat to the bargaining power of the employees. Few decades ago, the power of employee unions allowed the employees to fight for their legal and humanitarian rights. The employee union worked like a body that balanced the power of employer and employee. The fast-paced phenomenon towards freelance and contractual working transfers huge power towards the employer, which is a major threat towards the employee rights (Fedcamp, 78). Major US-based companies now demand on cheap labor from countries like the Philippines and India because through online medium because the cost of labor is way too lower than United States. This phenomenon becomes a major hurdle towards the rightful inclusion of people in the workforce in United States.
Through the power of labor unions, the workers used to negotiate their rights with the employers but the concept of contingent workers have facilitated the governments. While many people working on consultancy and freelance basis might earn unexpectedly but this does not guarantee employee related benefits. A person working fulltime with a an organization gets the benefit of getting health insurance and old age benefits, but if the person is working independently such sort of benefits are not there or it is minimal. It means that if a person working independently undergoes any sort of health related issue, he or she will be required to pay the expenses from their own pockets. Considering the high cost of medical expenses in United States, they are under problems during their life.
According to the laws of United States, freelancers are not legally allowed to unionize. As they are not unionized they their rights get compromised. While they are not legally allowed, there are a few organizations that advocate for their rights through different legal routes. One of such organization is Freelancers Union. This organization primarily provide insurance facilities to the freelancers and help in the advocacy of their rights. The idea of unionization for people from the Western countries is highly significant because when it comes to the idea of freelancing the major workload goes to the developing countries. Due to cheaper cost of living in the developing countries, people tend to accept wages which is for them a quite decent but for the people in developed world it is way too law. This growing perception that the people from the developing countries in the virtual world are more feasible damages the rights of locals.
In corporate world, there is an intense trend towards developing the capacity of the employees through trainings. As the organizations consider their employees as their strategic partner in achieving goals, the organizations tend to lookout for opportunities that develop the skills of the employees. The new HR trends in the organizations has realized the leadership of major global companies in the world that the employees are the major minds that ensure the organizational success. This organizational success is ensured through developing the skill-set of the organization. This idea has encouraged the organizations to match their organizational goals with the personal goals of the employees. Those organizations that exploit the rights of an employee actually deter the loyalty from the employees. Instead of being loyal to the organization, people tend to focus more on their personal goals.
While the concept of training is much common in organizations around the world but in case of contingent workers, this becomes a problem. As the freelancers and other sort of contingent workers are bosses of their own, the learning opportunities are restricted. Most of the contingent workers are more centered towards their own tasks and they do not tend to learn the things happening around them. In organizational setting each day and each moment is a moment of learning. Even a thing happening in other departments present the opportunity to learn something. The red tape and bureaucracy teach us many great learnings of life, which a contingent worker cannot learn.
One of the major benefits of being associated full time with an organization gives the opportunity to the employee to formally learn many things as the employee invest a heavy amount on it. Different organizations around the world conduct Training Need Analysis (TNA) for the members of the organization based on the current capacity of the members. This presents a great opportunity for the employee as the employer makes efforts in identifying the training gaps and fill it accordingly. This perk of being associated full-time with an organization is seriously lacking in the case of a contingent worker (Wagner, 174). The contingent worker himself is required to identify his lacking and he is personally required to fill these gaps from his personal effort.
The compensation is the major thing that becomes a differentiating factor when there is a comparison between compensation for contingent worker and full-time employee. When it comes to comparison of the earnings, any of the one could earn a higher amount but the other intrinsic and non-intrinsic rewards depend. There are numerous examples around the world that shows that in many cases contingent workers earn a higher amount of money than regular workers. Myriad contingent workers develop a unique specialty that usual employees in the company lacks. As this quality is of immense significance to the organization, the organization is bound to hire different consultants for project to project basis. As these individuals have some sort of special expertise, they charge a premium for their services. While some develop such sort of unique expertise, but all the contingent workers does not work like this. In the context of retail sales, many outlets require more workers during festivals, so they hire contingent workers for a shorter time-period (Leighton, 98).
The compensation for contingent workers in many case is a bit seasonal; therefore, they are required to look out for a multiple streams of things for making revenue. In context of conventional workers, this case is completely contrary as they have a fixed source of income. While the demands might be seasonal but contingent workers have the opportunity to go beyond their conventional targets. As the contingent workers are not limited by a specific amount of work by their organizations, they can go well beyond their targets and earn extraordinary.
The concept of permanent employees working on a fix daily job is gradually diluting. While there are diverse thoughts about the notion of contingent workers, but the organizations need to realize this is one of the most growing phenomenon in the country. The first benefit for the organization when it gets a contingent worker aboard is the attraction of saving money. The major inclining force behind the trend towards contingent workers is the due to the fact that young employees have develop a new sort of lifestyle. They do no prefer working in fixed timings and fixed environments. The notion of contingent working poses a serious threat to the bargaining power of the employees. While the concept of training is much common in organizations around the world but in case of contingent workers, this becomes a problem. The compensation is the major thing that becomes a differentiating factor when there is a comparison between compensation for contingent worker and full-time employee.
Amman, John. Surviving the New Economy. Boulder: Paradigm, 2007. Print.
Berman, Evan M. Human Resource Management in Public Service: Paradoxes, Processes, and Problems. Thousand Oaks, Calif.: Sage Publications, 2001. Print.
Fedcamp, Joseph. Permanent Temporary. San Francisco, Calif.: Hillfield, 2010. Print.
Leighton, Patricia. Out of the Shadows Managing Self-employed, Agency and Outsourced Workers. Oxford: Butterworth-Heinemann, 2007. Print.
Wagner, Viqi. Labor Unions. Detroit: Greenhaven, 2008. Print.
"America: A Nation of Permanent Freelancers and Temps." NextSpace Coworking Innovation The Revolution of Work. Nextspace, 1 Apr. 2013. Web. 16 July 2015. <http://nextspace.us/2013/04/01/america-a-nation-of-permanent-freelancers-and-temps/>.