Contingent work or casual work is an employment relationship which is considered non-permanent. These jobs are typically part time (typically with variable hours), have limited job security, and result in payment on a piece work basis. Contingent work is usually not considered to be a career or part of a career. One of the features of contingent work is that it usually offers little or no opportunity for career development. Contingent workers are also often called freelancers, independent professionals, temporary contract workers, independent contractors, or consultants.
Contingent work is not an entirely neutral term as commentators who use the phrase generally consider it to be a social problem. Employment agencies and classified advertising media are more likely to use the phrase casual work, particularly to attract students who wish to earn money during the summer vacation but who would not consider the work as part of a long-term career. All casual work is considered to be contingent work, but not all contingent work is casual. In particular, part time jobs, or jobs in organisations that have a high staff turnover, may be considered contingent work but may not be casual.
The concept of what is now considered to be a job, where one attends work at fixed hours was rare until the Industrial Revolution. Before then, the predominant regular work was in agriculture. Textile workers would often work from home, buying raw cotton from a merchant, spinning it and weaving it into cloth at home, before selling it on.
In the 1770s, cotton mills started to appear in Lancashire, England, using Richard Arkwright's spinning jenny and powered by water wheels. Workers would often work in twelve-hour shifts, six days a week. However, they would still often be paid on a piece work basis, and fines would be deducted from their pay for damage to machinery. Employers could hire and fire pretty much as they pleased, and if employees had any grievance about this, there was very little that they could do about it.
Trade union movement
Individual workers were powerless to prevent exploitation by their employers. However, the realisation that all workers generally want the same things, and the benefits of collective bargaining, led to the formation of the first trade unions. As trade unions became larger, their sphere of influence increased, and started to involve political lobbying, resulting in much of the employment law that is now taken for granted.
20th century decline in manufacture
Manufacturing has declined during the 20th century in the Western world. Many manufacturing organisations that employ large numbers of people have relocated their operations to developing nations. As a result, whenever they do hire staff in Europe or North America, they often need to be able to fire them quickly and keep costs as low as possible, to remain competitive. As a result, some employers may look for loopholes in employment law, or ways of engaging staff that allows them to circumvent union-negotiated employment law, creating what is now known as contingent work.
According to the US Bureau of Labor Statistics (BLS), the nontraditional workforce includes "multiple job holders, contingent and part-time workers, and people in alternative work arrangements." These workers currently represent a substantial portion of the US workforce, and "nearly four out of five employers, in establishments of all sizes and industries, use some form of nontraditional staffing". "People in alternative work arrangements" includes independent contractors, employees of contract companies, workers who are on call, and temporary workers.
Drivers of growth
Among several other contributing factors, globalization has had a large impact on the growth in using contingent labor. Globalization contributes to rapid growth in industries, increased outsourcing, and a need for flexibility and agility to remain competitive. By engaging contract workers, organizations are able to be agile and save costs. The contingent workforce acts as a variable workforce for companies to select from to perform specific projects or complete specialized projects. Also as organizations make efforts to be more agile and to quickly respond to change in order to be more competitive, they turn to the contingent workforce to have on-demand access to professionals and experts. Organizations also see the opportunity to reduce benefits and retirement costs by engaging the contingent workforce. However, there is risk involved in avoiding these costs if an employee is improperly classified as a contingent worker. Using the contingent workforce is also cost-effective in that using contingent labor allows for adjustments to employment levels and employment costs depending on what kind of expertise and labor is need and at what time it is needed.
Trends in the contingent workforce are also impacted by the economy. A study conducted by the MPS Group shows the relationship between the contingent labor cycle and the state of the economy. In a bullish economy, the demand for contingent labor is strong. This is most likely because organizations are trying to grow with the economy, and using contingent workers allows them to work with experts when needed, without the long-term costs of hiring them.
A knowledge-driven economy also contributes to the growth in the use of the contingent workforce because organizations rely more on their specific and expert knowledge and expertise. As demand increases for highly skilled and knowledgeable people, the expertise of contract workers becomes more attractive.
Advantages and Disadvantages of using Contingent Workers
|Flexibility in type and amount of labor resources||Lack of loyalty to employer or company|
|Save costs in benefits and tax||Disturbs organization's core morale and culture|
|Immediate access to expertise not present internally||Training costs|
|Savings in long-term compensation costs||Worker carries the full risk, limited benefits|
Contingent work jobs are widely referred to as McJobs. This term was made popular by Douglas Coupland's novel Generation X: Tales for an Accelerated Culture, and stems from the notion that jobs in McDonalds and other fast food and retail businesses are frequently insecure.
Critics say that it is unfair to tarnish all employment agencies with the brush of contingent work. Some say that temporary work patterns such as self-employment, consultancy and telecommuting can bring benefits of flexibility not just to employers but also employees, can improve work-life balance, and can make it easier for workers to manage family responsibilities. However, it is argued that such benefits are realised only in middle class jobs, whose entry barriers are too high for most workers with below-average earnings.
- Adjunct professor
- Contract attorney
- Day labor
- Human Capital
- IRS Reclassification
- Precarious work
- Psychological contract
- Workforce casualisation
- Zero-hour contract
- "Workforce Planning and Employment". InformIT. Pearson. 19 December 2005. Retrieved 30 November 2016.
- "Contingent and Alternative Employment Arrangements, February 2005". US Bureau of Labor Statistics. July 2005. Retrieved 30 November 2016.
- "Futurework" (PDF). Occupational Outlook Quarterly. US Bureau of Labor Statistics. September 1999. p. 36. Archived from the original (PDF) on 15 June 2006.
- Elizabeth Rice (2004). "Ten important issues and trends shaping human resources in 2004". Innovative Employee Solutions. Archived from the original on 22 March 2006.
- "Banc of America Securities Conference" (PDF). MPS Group. July 2004. p. 21. Archived from the original (PDF) on 9 October 2007.
- Marshall Goldsmith (23 May 2007). "The Contingent Workforce". Business Week. Archived from the original on 19 May 2009.
- "Banc of America Securities Conference" (PDF). MPS Group. July 2004. p. 10. Archived from the original (PDF) on 9 October 2007.
- "Contingent Workforce Management". The Human Capital Institute. 2006. Archived from the original on 16 July 2007.
- Contingent Work: American Employment Relations in Transition, edited by Kathleen Barker and Kathleen Christensen, ISBN 0801484057