The augmentation of the Independent Contractor

Engagement of independent contractors has grown significantly with the rise of remote work, digital platforms and AI. This extends to an increase in contingent workers, freelancers, independent consultants and administrative staff for short-term engagements.  According to a recent Ernst & Young publication, 50% of organisations have seen an increase in the use of contingent workers over the last decade, and as many as 40% of organisations expect to increase their use of contingent workers in the coming years.

As globalisation continues to strengthen and the pace at which we work quickens, organisations engage contingent workers on-demand to assist with projects throughout peak organisational periods allowing them to ‘flex’ their capabilities.  Evidence from EY’s survey of employers shows that 56% of employers are using the contractor workforce to complete projects where the specific expertise is beyond the capability of the existing workforce, 55% of organisations are using contingent workers to control labour costs and 50% of organisations believe contingent workers can help to overcome resistance to change within the legacy workforce.

Due to the advancement of technology and globalisation many organisations internationally have been able to bridge the digital divide that previously existed, making it increasingly possible for contingent workers to gain access to new opportunities that weren’t previously possible.  Evidence from the EY survey of more than 1,000 contingent workers showed that 56% agree that contingent work is how they want to progress their career.  More so, 52% would prefer not to be employed full time and 80% appreciate the flexibility that comes with contingent work.

Although many contingent workers within the Gig Economy agree there are significant upsides, based on EY’s survey results, 58% felt that permanent employees were treated better by their employer and 63% expressed concern about lack of paid sick and annual leave and lack of benefits.  Further to this, 48% felt the weight of job uncertainty and a lack of security.

With the growth of independent contracting, organisations are finding that new challenges are emerging.  In a Deloitte report on ‘Global Human Capital Trends’, they discuss how work without any formal employment agreement is reshaping talent management. EY’s survey of major employers suggests that organisations are yet to find and perfect a proficient operating model to manage their contingent workforce.  As many at 37% of organisations admitted to having fragmented governance models for managing their contingent workforce. More than 30% of organisations use multiple vendor management systems to manage their independent contractors and 55% of contingent workers that were engaged by organisations advised they had not gone through an official on-boarding process. 

For further information and for the full reports visit:
Source: EY www.ey.com
Source: Deloitte ‘Global Human Capital Trends’; www.deloitte.com