The way we work is always evolving.
Companies are no longer relying only on traditional, full-time employees to get things done. Instead, many are turning to contingent workers — people brought in on a project basis, for a season, or to provide highly specialized skills. But is a contingent worker the right choice for your business, or should you hire a permanent employee instead?
Understanding the difference will help you make the best decision for your company’s growth.
What is a Contingent Worker?
A contingent worker is someone who works for a company but is not a permanent employee.
Instead, they are hired for a short time, a specific project, or only when their skills are needed. Their job is “contingent,” which means it depends on certain conditions, like a busy season or a special task.
Unlike permanent employees, contingent workers usually:
- Don’t get long-term job security
- Often don’t receive company benefits like health insurance or paid vacation
- May be paid per project, per hour, or per task
Companies hire contingent workers because it helps them stay flexible, spend less money, and bring in special skills when they need them.
Workers often choose these jobs because they get more freedom to set their own schedules, pick the projects they want, and sometimes make more money than in a regular job.
Contingent vs. Temporary Workers
The terms “contingent” and “temporary” are sometimes used interchangeably, but they are not the same thing.
Contingent is the broader category, while temporary is just one type within it. Here is a breakdown of the two terms:
- Contingent Worker: A broad term for anyone hired on a non-permanent basis. They’re usually brought in for specific skills or projects, often work more independently, and may handle their own taxes and benefits. The focus is on deliverables and results rather than a fixed daily schedule.
- Temporary Worker (Temp): A specific type of contingent worker hired for a short, fixed period (often weeks or months). Temps are commonly placed through staffing agencies, work under direct day-to-day supervision like regular employees, and are integrated into routine tasks to cover staffing gaps, busy seasons, or employee leave.
The 7 Types of Contingent Workers
So, now you know the differences between temp and contingent workers.
Here are the 7 mains types of contingent workers you can find operating in different industries:
1. Freelancers
Freelancers are self-employed people who often work on creative or technical projects such as writing, design, or programming. They usually work for several different clients at the same time.
2. Independent Contractors
Independent contractors run their own business and sign agreements to complete certain tasks or projects. They decide how the work gets done and are responsible for paying their own taxes.
3. Consultants
Consultants are experts in areas like marketing, IT, or finance. They are hired for a short time to give advice, share knowledge, and help solve problems.
4. Temporary Workers or Temps
Temps are hired by a staffing agency or sometimes directly by a company to help when work gets really busy, when there aren’t enough employees, or when there’s a short project to finish. These jobs usually last from a few days to a few months.
5. Gig Workers
Gig workers pick up short jobs, usually using apps or websites. Common examples are driving people around, delivering food, or helping at events. They often get to choose their own schedule and where they want to work.
6. On-Call or Part-Time Workers
These workers either come in only when the company needs them or just work fewer hours each week than full-time employees.
7. Service Providers
Service providers are brought in through another company that offers a full service, like IT help or marketing support. Their work is planned ahead of time with clear goals, set costs, and deadlines.
The 7 Benefits of Hiring Contingent Workers
Hiring contingent workers gives companies several important advantages. Starting with:
1. Cost Savings
Businesses save money because they don’t need to offer benefits like health insurance, paid time off, or retirement plans. They also don’t have to pay payroll taxes for these workers.
2. Flexibility
Companies can bring in extra workers when business gets busy and cut back when things slow down. This lets them adapt without the long-term expense of permanent employees.
3. Access to Special Skills
Contingent workers often have unique or hard-to-find expertise. Businesses can bring them in for short projects, like building a website or solving a technical problem, without needing to hire full-time specialists.
4. Faster Hiring
Contingent workers often have special skills that are hard to find. Companies can hire them for short projects, like creating a website or fixing a technical issue, without bringing on a full-time employee.
5. Less Paperwork and Administration
Many contingent workers handle their own taxes, benefits, and insurance. This reduces the workload for a company’s HR and payroll departments.
6. Project Focus
These workers are usually hired for specific projects, so they can concentrate on getting the job done without being tied up in unrelated tasks.
7. Lower Risk
In uncertain times, companies can avoid the long-term costs and risks of hiring too many full-time employees. If business slows down, it’s easier to scale back.
7 Steps to Managing Contingent Workers
Bringing in contingent workers can give your business flexibility, but managing them properly is key to getting the most out of the arrangement.
Unlike permanent employees, contingent workers may need different onboarding, clearer expectations, and stronger communication to succeed.
Here are the steps companies should follow to manage them effectively.
1. Make a Clear Plan
Before hiring contingent workers, it’s important to understand why they are needed.
A company should first figure out if they need extra help for a busy season, a special project, or skills their regular team doesn’t have. After that, managers should clearly define each role by writing down what the worker will do, what success means, and when the work needs to be finished.
At the same time, a clear budget should be created so the company knows how much money can be spent without overspending.
2. Onboard Them Quickly but Properly
Contingent workers need the right tools and access from the start, such as passwords, software, or workspaces, so they can begin working right away.
Even though they are not permanent employees, they should be taught the basics of the company’s rules, safety standards, and where to go for help. Including them in team meetings, updates, or company news can also help them feel part of the group rather than outsiders.
3. Communicate Clearly
Good communication helps contingent workers stay on track.
Managers should explain the goals, deadlines, and measures of success at the very beginning. Using project management tools, like Trello, Asana, or Slack, makes it easier to track progress and share updates.
Regular check-ins should also be scheduled to give feedback, solve problems early, and keep motivation high.
4. Use Technology to Stay Organized
Technology can make managing contingent workers much easier.
Larger companies often use a Vendor Management System (VMS), which centralizes things like contracts, time tracking, and performance records. Even smaller businesses can benefit from project management tools that track deadlines and make sure tasks are being completed at the expected quality.
5. Stay Legal and Compliant
Companies must carefully follow labor laws when managing contingent workers.
This starts with making sure each worker is classified correctly — mixing up a permanent employee with an independent contractor can lead to serious legal problems. Clear contracts should also be written to explain duties, pay, deadlines, and legal protections. In addition, companies need to stay up to date on tax rules and employment laws to avoid costly mistakes.
6. Create a Positive Work Environment
Even though contingent workers are temporary, they should feel respected and included.
Encouraging collaboration with permanent staff helps build strong teams, and recognizing their contributions shows that their work is valued. Saying thank you, celebrating successes, and treating them fairly can increase motivation and improve results, even for short-term projects.
7. Review and Improve
After a project is completed, managers should take time to review whether the contingent workers met their goals and whether they were worth the cost.
Asking for feedback from both contingent workers and the company’s team can highlight what worked well and what needs improvement. Using this feedback to adjust future plans will make the process stronger over time.
When to Hire a Contingent Worker or an Employee?
The decision to hire a contingent worker or a permanent employee depends on the nature of the work and your company’s long-term goals.
A contingent worker makes sense when your business needs are short-term, project-based, or highly specialized. For example, if you need someone to step in quickly during a busy season, cover an employee on leave, or deliver expertise that your team doesn’t already have, a contingent worker is the most efficient choice. They give you flexibility to scale up or down without committing to the costs of a full-time hire, such as payroll taxes, benefits, or long onboarding.
Their role is usually focused on getting a specific job done rather than integrating into the company for the long haul.
A permanent employee is the right choice when the role is central to your business operations and requires long-term commitment.
If you want someone who will grow with the company, contribute to culture, and develop institutional knowledge, investing in an employee is the better path. Employees are particularly important in roles where ongoing collaboration, loyalty, and continuity matter. They bring stability, and while they come with added costs like benefits and training, the value they deliver over time outweighs those expenses.
However, hiring permanent employees can be time-consuming and complex, especially when you need to fill leadership roles, technical positions, or other hard-to-find specialties.
This is where a company like TalentHub can provide a significant advantage.
Outsourcing your hiring
Acting as an embedded recruitment partner, TalentHub manages the entire hiring process — from building a hiring plan and sourcing candidates, to running interviews, guiding you through selection, and negotiating offers.
They ensure that candidates have a positive experience and that your company is represented well in the job market. With a focus on quality over quantity, they help you secure people who are not only skilled but also a strong cultural fit for your team. They even provide peace of mind with a guarantee to replace a hire if they leave within four months.
Contingent workers are best for flexibility and specialized short-term needs, while permanent employees are best for building long-term growth and stability.
If you decide the role calls for a full-time hire, working with a recruitment partner like TalentHub ensures that you don’t just fill a vacancy, but bring in the right person to strengthen your business for the future.
Book a call and find the perfect candidate for your business.
