The definition of ‘contingent’ refers to a temporary or non-permanent employment relationship. Contingent workers typically include individuals such as freelancers, temporary employees and those employed through staffing agencies. If you’re still unsure on the contingent meaning, another way to describe this workforce is contract workers.

Many organisations have historically viewed their relationship with the contingent workforce as a simple transaction: skills in exchange for salary. These organisations did not see the relationship as a strategic partnership where skilled workers help solve complex challenges.

But tough times have forced organisations to be more ambitious and creative in their integration of contingent workers. The numbers speak for themselves, with the gig economy expected to hit 86.5 million workers by the end of 2027.

The popularity of contingent workers continues to grow. Organisations failing to account for their non-permanent population will lose out in the battle for skills and expertise.

A strong Contingent Value Proposition (CVP) is critical 

Contingent workers are firmly in control of their careers. Current talent shortages mean these workers have even greater choice when it comes to their next move. What’s more, an individual interested in your company costs 10% less than one who needs to be 'sold' the opportunity.

Strategic organisations are beginning to recognise this dynamic and are changing their approach. By creating a Contingent or Contractor Value Proposition, the best talent seeks out the organisation. Organisations then benefit from engaging with the skills they need, at a cost that is right for their business.

But a Contingent Value Proposition must run deeper than simply engaging the workers’ interests. The CVP must incorporate all elements of the worker lifecycle, including onboarding, retention and re-engagement.

How to define an engaging contingent proposition

Organisations may be searching for a ‘catch-all’ CVP, but personalisation is essential. In other aspects of life, individuals receive tailored communications that directly address their needs. This expectation has extended to the world of work.

Plus, not all contingent workers are engaging with the organisation on a high-skill, high-salary basis. Nor are these professionals in the same departments or seeking the same benefits.

While this diversity in engagement creates complexity, it simultaneously offers the building blocks for your CVP. Find the common threads that unite these workers in spite of their differences, which may include:

• Flexibility: Compressed work weeks and greater input in shift patterns may attract contractors seeking a work-life balance.
• Reward and recognition: A competitive salary aligned to the wider market remains vital, but attracting contractors now involves more than just compensation. Conversations around on-demand pay as a competitive differentiator are gaining traction. A growing number of organisations seek to offer greater financial stability to their non-permanent workforce.
• Development opportunities: Legislation has previously made learning and development a difficult topic of discussion with contractors. But with talent in short supply, organisations may need to consider how they keep their network of contractors ‘warm’. Sending regular communications that showcase development opportunities or interesting project work illustrates a commitment to your contractors’ progression.

With key pillars in place, organisations can then tailor their CVP to accommodate different segments. An IT contractor resonates with a different contingent proposition than someone working in a call-centre environment.

You must ensure that contractors have a degree of choice. Consider strengthening emotional buy-in to your organisation's purpose and ambitions. You can achieve this by making it easier for contractors to connect with your goals. Allow contractors to choose the parts of your Contingent Value Proposition that are most relevant to them.

Share ownership of your CVP

The Contingent Value Proposition has significantly lagged behind its full-time equivalent, the Employee Value Proposition (EVP).

Historically, the EVP has been ‘owned’ by the HR function or another centralised group (such as People and Culture). This ownership creates accountability. Teams focus on attracting, engaging and onboarding the best permanent staff. HR’s efforts to understand the workforce often include regular surveys, updated benefits packages and exit interviews.

In contrast, the organisation scatters responsibility for the contractor community. Individual business units and hiring managers are in charge of finding and attracting the skills they need.

A lack of cohesion creates blind spots, impacting an organisation’s understanding of the volume and value of contingent workers within the organisation.

But we can no longer lean into a lack of visibility. The world of work demands agility, and organisations must change faster than ever before to keep pace.

Be consistent and fulfil promises for your contingent value proposition

Your CVP should set the tone of how you want to engage with contractors. From the outset, you need to clearly define what it is that you'll offer as an organisation.

You must implement a broader change management strategy. Doing so ensures that every interaction throughout the workforce lifecycle upholds this contingent proposition. This starts from contractor engagement and onboarding to departure and transition to a part of your alumni network.

Similar to other strategic shifts, this transition needs to be led by senior stakeholders who encourage teams to:

• Adapt their language: When teams see contractors for the skills they provide rather than the terms of their engagement, we transition to a more holistic workforce strategy. Rather than distinguishing ‘perm’ and ‘non-perm’, we must focus on the skills and expertise that individuals offer.
• Reflect on their actions: Contractors are integral in project delivery. When celebrating success, it’s important to highlight their contributions in reaching these milestones.
• Continue an ongoing conversation: Maintain this commitment to celebrating involvement during the offboarding process. The tone on which you finish the conversation is the one that contractors will take to future conversations. When you ask for their opinion on your organisation, ensure their response reflects the promise you made at the outset.

Remain mindful of legislation

The surge in demand for contingent workers is evident. The average organisation now considers 47% of its workforce to be ‘extended’ or ‘non-employee’. But legislation continues to trail behind the trends.

The ability to work with anyone, from anywhere, is a huge attraction for contingent workers. This ability also appeals to organisations looking to widen the scope of their search.

But when engaging across borders, organisations will need to remain mindful of permanent establishment rules. For example, Article 5 of the OECD Model Tax Convention states if an employee can sign contracts with local clients, the employer may be liable for corporate and employment taxes. Additionally, if the employee regularly uses a home office for business, this could also trigger tax obligations.

Tax, co-employment, and permanent establishment rules differ by country. It's essential to have local experts to guide your understanding and help to mitigate risk.

Take care of your contingent workforce

We can no longer ignore the value added by contractors.

Organisations should have a strong contingent proposition. These organisations also need the right software, marketing strategy, and current insights. By doing so, employers can stand out and use their CVP effectively in crowded talent networks.

Partnering with a leading workforce solutions provider helps organisations attract more candidates. This also opens up opportunities for better candidate engagement. To explore how we could elevate your Contingent Value Proposition together, talk to our team today.

AUTHOR

Matthew Dickason
CEO (APAC), Hays