What Is the Meaning of Contingent Worker (With Advantages)

By Indeed Editorial Team

Published May 21, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies typically hire contingent employees to complete assignments that their team may not have the resources, time, skills, or workforce to finish on their own. Working as a contingency employee can give professionals a flexible work schedule and the authority to work as they can. If you're considering working as a temporary employee, it's beneficial to learn more about this type of work. In this article, we discuss the meaning of contingent worker, describe how they differ from permanent employees, outline some advantages and disadvantages of contingent work, and share how to be successful as a contingency employee.

What is the meaning of contingent worker?

If you're interested in learning the meaning of contingent worker, they're also known as a contingent employee and are professionals who a company hires temporarily to help them complete a project or to reach a goal. Consultants, independent contractors, outsourced employees, and freelancers are all contingent employees. A company may hire a temporary employee to save on costs or to source specialized skills. For example, if a company suddenly requires a professional with knowledge of Spanish, they can hire an independent contractor with this skill.

Employers may not consider temporary employees part of their staff, as companies typically only require them for a specific timeframe. If a company is happy with the work of an outsourced employee, they may hire them again in the future.

Related: 7 Elements of a Written Job Offer (Details and Terms)

How does a contingent employee differ from a permanent employee?

Here are some ways that an independent contractor may differ from an employee who has a permanent job position within a company:

Job duration

While employees complete tasks regularly and continue to work for an organization every day, a company typically hires outsourced employees to complete a specific project. Independent contractors often follow an agreed-upon schedule, and their time working for a company finishes when the work is complete. Often, permanent employees only stop working for a company if they quit or the company lays them off for a specific reason.

Related: What Is a Contract Employee?

Training

Companies often hire outsourced employees for their specific skills. Unlike employees who may have thorough training, organizations typically don't train temporary employees. Contingent employees usually know what to do for the project, but the organization's managers may give them specific instructions and guidance based on their capabilities and their specializations.

Salaries

Employers with salaried or hourly employees pay them an amount that both parties agree upon in their contract. Clients typically only pay contingent employees for the specific project that they hire them to complete. Usually, the two parties decide on a set payment for the project before it begins. This contract represents a temporary relationship between the two parties.

Benefits

Another difference is that temporary employees rarely receive or may not receive benefits, such as health care or retirement plans. They're also responsible for paying their own income taxes instead of having them automatically deducted by the company's payroll. Some benefits that employers may give to their employees but not to contingent employees can include:

  • Dental insurance

  • Education assistance

  • Flexible schedules

  • Flexible spending accounts

  • Health insurance

  • Health savings accounts

  • Paid holidays

  • Paid medical leave

  • Paid vacation

  • Retirement accounts

  • Sick leave

Related: What Is a Flexible Work Arrangement? (With Benefits)

Advantages of contingent work

Both businesses and independent employees can benefit from this working dynamic in the following ways:

For employers

If employers know they require more human resources to work temporarily on a specific project, hiring an independent contractor is beneficial. This way, employers don't pay additional costs for the individual's benefits or provide personal time off (PTO) or sick days. When a company hires temporary employees, employees don't train them, saving them time and the business money. They can avoid any payments regarding courses or certifications needed for a new member of their team. This way, a skilled professional can promptly finish the company's project.

For contingent employees

Freelance or contract work gives people more flexibility in their schedules. They can choose when to take a project and decide precisely what kind of work they want to do. Sometimes, they can work from home as long as they complete the project on time. Contingent work also allows professionals to work on a variety of projects. They can work with different companies and organizations simultaneously. Having various tasks is excellent for people who like to do something different each day. Some people even choose to work as temporary employees to discover which industry is best for them.

Related: The Best Work from Home Jobs

Disadvantages of contingent work

Though contingent work can be beneficial, it may also come with some disadvantages for both parties. Some disadvantages may include:

For employers

One disadvantage of hiring a temporary employee is that employers have little to no control over their process. They may not contact the person during set times or tell them how to complete the job. Also, if a company has an urgent need, it may have trouble finding a qualified independent contractor quickly. Full-time employees are readily available when an emergency arises, but finding an independent contractor requires time and effort. Employers can benefit from careful planning when hiring a temporary employee.

For independent contractors

You may require high-paying freelance or contract work to afford health care and dental insurance. Many people choose full-time work for the benefits, which many temporary employees don't receive. There can also be less job security with contingent work. You may require time, effort, and good professional relationships to find your next project. Depending on the type of work and the time of year, you may have steady work or a fluctuating schedule.

How to be successful as a contingent employee

Companies want temporary employees they can rely on for specific projects. If you're someone who enjoys working independently and excels at managing your work, you may consider contingent work. Here are several ways to be a successful temporary employee:

1. Provide work samples

When applying for contingent work, many companies require work samples. This requirement is especially prevalent for jobs hiring creatives. For example, writers and designers can create portfolios of their work. Companies can decide if the applicant's work style is suitable for their project.

2. Establish trust

To be a successful temporary employee, companies may require you to show you're highly skilled and that they can trust you with completing the project promptly. Clients are more likely to trust you from the beginning if you have positive testimonials from previous clients. Consider adding testimonials or positive reviews to a document that you can provide or on your website that potential clients can analyze. Once working on a project, frequently provide the company updates on the status of your work, so they're aware of the progress you're making.

3. Maintain communication

Companies appreciate when their outsourced employees respond to their phone calls, emails, and messages. This responsiveness helps them trust that you're completing your work. As a contingent employee, planning meetings with your client to discuss updates on a project can help you establish a positive working relationship. The meetings can be brief and are excellent opportunities for both parties to ask questions and provide more information. You can prepare your work meetings by compiling proof of your progress and asking questions you may have for the rest of your work.

4. Learn to be independent

Companies often hope to hire an outsourced employee who can work independently while meeting deadlines. Before accepting a job offer, make sure you clearly understand the project and are confident that you can complete it without requiring much help from the client. Many temporary employees work remotely, so you may benefit from learning how to manage your time and complete your tasks effectively. Many companies pay per assignment, so you can benefit financially from staying focused and working quickly.

Related: A Beginner's Guide to Freelance Jobs

5. Be humble

Even if you're more knowledgeable in a particular area than the staff at the company, it's vital that you always treat them as equals and with respect. You're the one who the client is paying to complete their work, so aim to make the client satisfied with the work that you complete. Viewing your work as collaboration helps ensure you follow a client's instructions instead of completing a project your way.

6. Understand the project

Before beginning the project, try to understand what your client expects of you. You can submit work that's useful for the company. Before beginning a project, have a meeting where you agree on expectations and deadlines for the task. It can be beneficial to create a project outline and let your client know when they can contact you. Ensure that you're readily available in case any aspects of the project change.

7. Meet deadlines

Ensure that you're completing your work on time. When you adhere to project deadlines, you can use any additional time looking for other work and beginning new projects. Satisfied clients are more likely to hire you again in the future and refer you to other clients.

Explore more articles