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The Rise Of Contract Workers – The ‘Not So Temporary’ Trend For Businesses

The modern labor markets and businesses are witnessing a new trend – the rise of contract workers or temporary employees. They form a part of the gig economy, also known as the freelancing economy.

In future, will freelancers outnumber the permanent employees?

Well, many labor economists believe that the coming times will see a rise in temporary workers who wish to work with greater autonomy and flexibility, as compared to a regular 9 to 5 employee. While companies, on the other hand, would like to hire more contract workers for time-defined projects and save on recurring cost of hiring a full-time permanent employee.

Companies would like to hire more contract workers for time-defined projects and save on recurring cost of hiring a full-time permanent employee.


Let’s go through some vital insights below:
  • As the U.S. recovered from the last recession, temporary employment has since been growing steadily. Nearly 480,000 jobs were added from 2012 to 2019 with companies seeking more flexibility in how they staff while workers seeking greater control over when and where they work.(1)
  • Forty-two percent of people picking up temporary work take on at least two gigs per week and new research shows they will have even more opportunities to choose from. (1)
  • Demand in the temporary labor force for third quarter 2018 was predicted to increase 3.4% as compared to the same period last year. (2)

The statistics point towards a favorable shift towards the temporary workers or freelancers. But what makes companies hire temporary workers? Or, why do professionals choose to work on a temporary model?

This post attempts to unravel the above mysteries by digging deeper into the gig economy, its perks, and its future.

The uber model of working

We all must have booked an Uber (cab service) at least once. Uber is the perfect example of a crowdsourced transportation service. It matches the drivers with people who need rides. These drivers are not permanent employees of the company, but contractors.

For drivers, this may also be an extra source of income or even a full-time occupational source. Uber is not the only big technology giant which is dismissing the traditional employment model. Google, Facebook, Amazon, and other Silicon Valley tech giants are also opting to include more temporary employees in their working model.

From sales to developing codes, independent and contract-based workers are finding better opportunities than a regular lower-waged job in the same profile. A perfect example here would be of developers. Many temporary worker agencies provide platform for designers, coders, developers, and similar professionals to showcase their talent and get hired on a contract basis with hourly billing.

Companies also look for ways to cut-down HR costs by hiring in-demand skills for time-bound projects. They need to pay the worker for the number of hours worked and simply get them off-the board when the project gets completed. Seems like a win-win situation for both the parties.

From sales to developing codes, independent and contract-based workers are finding better opportunities than a regular lower-waged job in the same profile.

Why do companies hire temporary workers?

Demand for the temporary labor force is driven by many factors. As per an article published on The NY Times, Google had 102,000 full time employees and 121,000 temporary and contract workers till the first quarter of March. The primary factor that drives the demand of temp workers is the desire to save labor wages and benefits.

Temp workers offer businesses a cost-effective way to replace employees who are out on maternity leave, sabbaticals, or other long-term vacation. Temp workers are hired for the value of their output and thus do not receive any perks or benefits like health insurance and bonuses.

It also helps companies to maintain optimal staffing levels. Their presence can help companies optimally distribute the workload, without overburdening the permanent employees.

Some companies also hire temp workers to try out their ability and adaptability in the team before hiring them for permanent positions. Once the trial period is over, they are offered a permanent position in the company.

Temp workers help companies meet the short-term demands of a particular skill or role. For example, nearly every other service providing company is coming up with business mobile application. Developing a mobile app requires specialized skill and expertise. Hiring a temporary mobile application developer can help serve the purpose without having to permanently incur the cost of getting an in-house developer on-board.

Temp workers help companies meet the short-term demands of a particular skill or role


Contract workers can help keep the official employee headcount of the company low and thus lower labor incurred costs.

Why professionals are opting to be a part of the gig economy?

The growing service economy has opened a whole lot of opportunities for workforce who wants to be a part of this flexible industry. Platform like Fiverr, Upwork, Instacart, Task Rabbit, etc. have further made it easier for professionals to earn supplemental income or work as a full-time freelancer. Though the contract workers are not entitled to several benefits, they get to work independently. They neither have to sit for a particular number of hours nor work under a boss.

Contract workers not have to sit for a particular number of hours neither work under a boss


Many professionals also see this as an alternative work arrangement that can help them meet their finances while showcasing their unique skill set and abilities to a larger set of audiences.

The important thing to note here is that not every temporary job is created equally. Some skills are in more demand than others. Hence, some temp workers can demand higher compensation. Some in-demand skills include financial planning, content editing, mobile application development, cloud app development, network and system administration, etc.

Easier networking and entry to big techies are other factors that make the gig economy so alluring.

Final thoughts

There are a growing number of professionals who choose to work on a contract, part-time, or freelance basis like developers, content creators, management consultants, etc. In the high demand areas, contract workers can individually pick projects and earn better wages and work simultaneously on multiple projects.

Companies on the other hand can better manage their operational expenses and associated labor costs. It also helps them to keep pace with changing technological demands like developing artificial intelligence apps, IoT (Internet Of Things) apps, machine learning programs, etc.

Working as a freelancer or a contract worker can also give professionals the opportunity to build their own network and learn other skills as well.

The future of contract working is definitely bright and it will be good to see how this trend brings in considerable changes for professionals as well as companies.