How Leveraging a Contingent Workforce Helps Reduce Your Business Costs

Organizational reliance on permanent employees isn't going anywhere, but changing financial environments are driving more businesses to take advantage of contingent workers. Freelance, contract, and gig workers fill skill and competency gaps for organizations that have specific, short-term projects or needs. Temporary employees help reduce business costs and ensure companies with fluctuating customer demands have the talent necessary to sustain themselves. This is especially true for organizations in volatile industries like hospitality and retail that experience seasonal changes in customer demand.

Companies in these and other industries employ contingent workers to increase their flexibility and meet customer demands, but any business can leverage temporary talent to significantly reduce its overall business costs—especially when pairing this staffing model with an effective learning management system.

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4 Cost-Saving Benefits of Contingent Workforces

While full-time workers are needed to manage essential daily routines and tasks, many organizations leverage an extended workforce to handle special projects and changing business needs. Consider the following benefits of hiring temporary workers.

1) Flexible and Scalable Work Environments

Leveraging contingent workers gives your organization the flexibility to scale up or down without making long-term commitments depending on your current needs. When business is booming and the demand for talent is high, you may need to hire more temporary workers. This can be especially true for retail organizations during busy holiday shopping seasons that experience an influx of customers for short periods of time.

Temporary workers understand that their jobs are expected to end after a fixed period of time, meaning your organization saves on salary costs that full-time employees would require. You also avoid the uncomfortable circumstance of laying off employees during slow periods because your contingent hires already know when their relationship with your business will end.

2) Leverage Specialized Skillsets

As your business grows and evolves, you may find that you need unique skills to achieve specific, time-bound goals. Hiring a full-time employee with the skills you need wouldn’t necessarily be a wise decision if that person’s skills won’t benefit your company after they help you complete your project or reach your goal. A temporary consultant can help you complete your project and take advantage of the skills your organization needs without making a long-term commitment to someone who won’t further serve your business needs in the future. This hiring approach ensures that your organization benefits from the skills it needs when it needs them, rather than continuing to pay for a service that isn’t always necessary.

3) Faster Time to Market

For many temporary workers, the saying “time is money” couldn’t be more accurate. Freelance and gig workers often need to secure multiple clients and projects to earn a living. Those who are paid per project rather than hourly are especially less likely to waste time. They’re motivated to reduce inefficiencies and minimize downtime so they can move on to their next contract. Your organization benefits from these agile professionals because they’re committed to getting your projects successfully up and running as quickly as possible.

Some organizations might worry that speedy work can lead to mistakes, but freelancers specialize in their fields, making it possible for experienced professionals to complete projects swiftly and efficiently. These temporary workers do their jobs well in hopes of securing a future partnership (and another paid gig) with your company.

4) Reduced Overhead Costs

Hiring a contingent workforce may save money on office space and equipment. Freelancers and gig workers, especially those who can work remotely, often already have their own computers, headsets, workspaces, and other equipment. This eliminates the need for your organization to supply expensive technology hardware and pay for office space.

Unlike full- and part-time employees, you pay contingent workers a fair wage for the hours they work, and that’s it. By hiring contingent workers, your organization saves on high-cost employee benefits like health insurance coverage, retirement plans, and paid time off, freeing up your budget to focus on other imperative business needs.

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The Role of an LMS in Managing Your Extended Workforce

Hiring contingent workers comes with many cost-saving benefits, but organizations still need to invest in onboarding and training for their temporary talent. Leveraging the right LMS can make this a seamless process that ensures the costs of training and onboarding don’t outweigh the potential savings of hiring freelance, gig, or contract workers. Your LMS allows you to streamline the onboarding process for contingent workers so they receive the information they need to work on projects for your company. This can be especially vital for remote freelance and contract workers who aren’t working standard hours but nonetheless need access to self-paced courses and training materials.

Your LMS helps you deliver the same compliance training and other essential learning to your contingent workers as you would to full- and part-time employees. This ensures that everyone working for your organization understands and adheres to your company’s rules and regulations, as well as any legal obligations or mandates that must be upheld in your industry. This helps to protect your business while working with freelancers and other temporary employees. Analytics tools in your LMS allow you to track each person’s compliance training and certifications, which can be especially useful if you’re working with freelancers on retainer or consistently re-hire the same seasonal employees.

LMS analytics also help you track overall performance and development, regardless of each worker’s employment status. This can help you make decisions about whether to rehire certain contingent workers for future projects. You can also offer ongoing development opportunities to promising contingent workers without making large investments in traditional learning programs.

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How LMS Integration Can Amplify Contingent Workforce Cost Savings

In addition to seamlessly delivering onboarding and training, your LMS can further your extended workforce cost savings. Efficient content delivery that leverages mobile and microlearning module options helps reduce your organization’s overall training costs. Rather than relying on expensive, “one size fits all” training programs, you can deliver the essential information your temporary employees need with a convenient, digital learning solution that works with their schedules. You can also encourage your permanent workforce to share relevant and useful learning content with temporary employees. This can reduce the costs of developing and distributing training materials to freelance and contract hires.

Your LMS also allows you to create customizable learning paths for different employee classifications, ensuring that every worker receives the knowledge and training that’s appropriate for their role within your organization. These custom learning paths minimize unnecessary training, saving your contingent workers valuable time and reducing L&D costs for your company.

Additionally, tracking and analytics tools embedded in your LMS help you understand which learning programs yield the best results for various worker types. Leveraging reporting features helps you assess how your extended workforce performs compared to your permanent employees. The data from your LMS lets you make informed decisions to improve your training and onboarding programs and enhance the ROI of both your training platform and your contingent workforce.