Staffing insights and advice.

COVID-19 And Contingent Labor

On December 31, 2019 Chinese Health officials informed the World Health Organization (WHO) about a cluster of 41 patients with a mysterious pneumonia. Most were connected to Huanan Seafood Wholesale Market. On January 7, 2020 Chinese authorities identified the virus that caused the pneumonia-like illness as a new type of coronavirus (called novel coronavirus or nCOV). On January 30, WHO declared a global public-health emergency. On March 11, WHO declared the outbreak a global pandemic. On March 31, more than 1/3 of humanity was under some form of lockdown. On April 7, roughly 95% of all Americans were under lockdown, as 42 states issue stay-at-home orders. Today, the United States is acting under the “new business as usual.” COVID-19 is still circulating and US citizens are trying to engage and work in a world with economic and social uncertainty. The economic impact to just about everyone has been swift and severe. So, where does that leave contingent workers and companies that manage them?

Before COVID-19, there was a huge demand for a contingent workforce, and it was continuing to rise. According to multiple industry sources, approximately 25% of US companies and organizations had integrated some form of contingent workforce plan.

The pandemic has created a shift in the demand and need for contingent labor. Some companies have seen the demand for contingent labor go up. Other companies have been forced to lay off their specialized contingent workers due to lack of work. However, those same companies are beginning to see an uptick in activity; signaling a need for contingent labor once more. The business climate is changing as quickly as the data about the virus.

Because COVID-19 has created a series of unknowns for large and small businesses alike, leaders will continue to grapple with how to manage their current contingent workforce plans. “Companies need to be nimble, flexible and ready to respond to the marketplace on a moments notice,” said the managing director of “These companies should be relying on a managed service provider (MSP) like to help them navigate these uncertain times.”

Experts predict that organizations will continue to grow their contingent labor workforce, in order to maintain more flexibility post-COVID. In other words, the pandemic has quite possibly created long-lasting change in how many businesses engage with the talent they seek to employ and manage.

Research suggests that today 32% of organizations will be replacing full-time employees with contingent workers as a cost-saving measure. That’s quite a jump from where we were pre COVID-19, just 8 short months ago.

But trying to manage complex contingent labor plans without professional support can actually cost more than it saves. It’s estimated that managing contingent labor should cost companies 12% less than a regular employee’s cost of employment. But that savings can evaporate quickly if the company is mismanaging how they engage with and manage the contingent labor.

Businesses that manage their contingent labor requirements usually deal with unforeseen additional costs related to time, compliance and supply chain management. And with that, there goes any savings that the company was planning on by implementing a contingent labor workforce plan.

The pandemic has caused chaos and uncertainty for most of the companies that make up the US economy. Those same companies need an MSP they can trust to make sense of the chaos. They need an MSP like to help them plot a profitable course for their contingent labor workforce plans. The team will analyze any areas of weakness and knowledge gaps in your contingent labor plans. They will act as an extension of your HR department to create and manage a plan that will deliver the results you need to get you from where you are to where you want to be. The team delivers results.