An independent contractor by any other name would work as hard
The Staffing Industry Analysts’ 2012 Contingent Buyers Survey for North America, released the other week, highlights an interesting statistic for the world of contingent labor. The study found that only 18 percent of respondents plan to use more independent contractors (ICs) in the next two years. Instead, 44 percent of respondents plan to use fewer ICs. In contrast, 42 percent anticipate utilizing more agency temps over the same time period.
Based on my experiences and observations over the past few years, these results are not all that surprising. Independent contractors were — and still are for many corporations — an uncontrolled segment of the workforce with few to no defined rules of engagement.
However, increased scrutiny over the classification and utilization of ICs has led some companies — primarily larger organizations that might be two or three generations into their contingent workforce programs and understand the risks associated with it — to take steps to increase control and visibility into their IC population, govern IC engagement, and protect themselves from state lawsuits or federal action.
These more conservative policies often deter hiring managers, who would prefer to avoid the hassle of the tight rules now associated with the acquisition and usage of independent contractors. Instead, managers might rely on a third party — a staffing company — to provide and manage this type of labor.
But these controls also put an additional burden on the independent contractors themselves from a contracting, pricing, insurance, and administration perspective. As a result, many opt to associate themselves with a staffing agency and have it handle the minutiae of these processes.
Perhaps the most important takeaway from this survey, though, is not that companies are engaging fewer people. Rather, they’re engaging a different qualification of worker. One who might have been an independent contractor a year ago might now be categorized as an agency temp. And I expect the utilization of this segment of the temporary labor force will rise.
But you tell me: Is your company moving away from independent contractors toward other forms of temporary labor? Do you anticipate having more or less independent contractors two years from now? Agency temps?