The recruitment landscape has seen a significant rise in contingent hiring since 2019. Contingent workers, including contractors, freelancers, and temporary talent, are now an important part of workforce planning for many organizations. An industry forecast reported that the U.S job market will consist at least 50% of contingent workforce by 2050.

According to Statista, the projected gross volume of the gig economy was expected to reach $455.2 billion in 2023. That projection is now historical, but the broader shift toward flexible, project-based, and platform-enabled work continues to influence how companies approach contingent hiring.

What is Contingent Hiring?

Contingent hiring is the practice of engaging workers for a specific project, assignment, business need, or limited period rather than hiring them as permanent employees. The contingent workforce overlaps with the gig economy and commonly includes contract workers, freelancers, consultants, and temporary workers. For instance, an IT developer may be hired for a specific project for a limited time.

Matt Erhard, Managing Partner at the Summit Search Group, opines that the contingent workforce is a mixed bag of benefits and challenges. From his viewpoint, companies must be cognizant of what the contingent workforce brings to the table.

“Develop long-term relationships with contractors or temporary employees. It comes a long way when you need them in the future. However, you cannot have the same control over worker quality and consistency as you do with staff on the payroll, even if you use a temp agency or a staffing firm.” – Matt Erhard, Summit Search Group

How Can Companies Benefit from Contingent Hiring?

• Specialized talent for specific projects: Organizations can hire experts to work on specified projects, tasks, or assignments. For example, a specialist can be hired to prepare a company’s taxes or build or improve a website that the in-house team can later update or maintain.
• Additional support during busy periods: Companies can avoid overburdening long-term staff during busy periods such as holidays. Seasonal hiring can add extra hands to manage a temporary surge in demand.
• Greater workforce flexibility: Companies can scale specialized capacity up or down based on project timelines, seasonal demand, and changing business priorities.
• Potentially different payroll-tax responsibilities: Properly classified independent contractors may create different payroll-tax responsibilities. However, contingent worker classification depends on the actual working relationship, and obligations can differ for employees, agency workers, and independent contractors.

These advantages make contingent hiring useful when organizations need speed, specialized expertise, or additional capacity without immediately adding a permanent role. The benefits are strongest when worker classification, scope, expectations, and compliance requirements are clearly defined from the beginning.

What Are the Drawbacks of Contingent Workers?

• Lack of loyalty and commitment can be a concern. Since contingent workers are engaged to carry out a specific job or assignment, they may be less involved in the company’s long-term environment and goals.
• A higher rate of turnover can create security or continuity risks, especially when contingent workers handle sensitive or confidential information.
• Less consistency and stability: Contingent workers are not necessarily obligated or available to return the next time the company needs them.
• Knowledge transfer challenges: Knowledge transfer can become difficult if project documentation, access management, and handoff processes are not planned before the engagement ends.

These drawbacks do not make a contingent workforce ineffective. They highlight the need for clear expectations, appropriate access controls, consistent communication, and a well-defined onboarding and offboarding process.

How to Hone a Contingent’s Skills and Expertise

Often, employers focus heavily on soft skills during the hiring process and may not validate the specific technical or role-based skills required for the assignment. This can create a mismatch between a worker’s experience and the actual work they are expected to perform. Articles on how to convert passive job seekers into quality candidates can also help employers broaden their approach to finding top talent.

Besides, companies can also adopt the following methods:

• Accurate job description
• Use recruiting tools like ATS, chatbots, and other hiring technologies.
• Assess specific skills and knowledge to select the right workers.
• Use asynchronous video interviews to look beyond the CV.
• Ask for referrals or references from past clients.
• Verify the candidate’s job history.
• Create an onboarding procedure that is mutually rewarding and explains the project, expectations, tools, access, and communication process.

For example, talent intelligence companies like Glider AI support talent quality by helping organizations evaluate candidates through phone screens, interactive assessments, interviews, and other skills-based hiring workflows. A structured assessment process can help teams compare contingent candidates against the actual requirements of the assignment while maintaining a more consistent candidate experience.

How to Avoid Common Mistakes in Contingent Hiring?

Matt cautions employers to avoid major mistakes when hiring contingent workers. Taking a cue from his personal experience, he says that managers may ignore temporary workers, especially when they are performing basic or short-term tasks such as data entry.

Managers may think they do not need to develop a working relationship with these workers because the engagement is limited. This can negatively impact work quality, communication, and the overall experience.

Contingent workers need appropriate supervision, timely answers to their questions, and constructive feedback, similar to any regular employee working toward defined business outcomes.

Contingent workers are different from permanent workers, so companies should be diligent in how they manage them. Clear and frequent communication should be a top priority without turning into micromanagement.

A strong onboarding experience can also guide contingent workers through company policies, procedures, security requirements, culture, project goals, and the people they need to work with. Clear onboarding helps workers become productive faster and reduces avoidable confusion during a short engagement.

Conclusion

Contingent hiring can give companies access to specialized talent, greater flexibility, and additional capacity when it is managed carefully. The key is to define the role clearly, assess job-relevant skills, classify workers correctly, provide effective onboarding, and maintain consistent communication throughout the engagement.

A structured approach helps organizations gain the benefits of a contingent workforce while reducing quality, compliance, security, and continuity risks.