Over the years, the use of a contingent workforce (contractors, consultants, freelancers, interims, temps etc) has grown. In just 20 years, the percentage of work allocated to contingent labour on average has grown from 6% in 1989 to more than 27% in 2009.

Furthermore, in April, IBM predict that their current employee based would be reduced to 1/3 of its current size by 2017 through contingent labour and the concept of crowd sourcing.

Why the growth in contingent labour? Business leaders usually cite three reasons:

1. It allows access to expertise quickly, especially that which is difficult to recruit. This is especially true with professional level contingent labour which may be substitutes for consulting organisations.
2. It enables flexibility in the labour cost base; by being able to turn resource ‘on’ and ‘off’ as required. However, this is more a theoretical benefit as the loss of knowledge can be a challenge in many organisations. Furthermore, the replacement of a relational commitment between employee and employer with a transactional one between a supplier and customer can actually reduce organisational agility; ‘suppliers’ are less likely to buy the vision and go the extra mile.
3. Overall costs can be reduced – especially true in labour arbitrage plays where the contingent solution may actually be achieved through business process outsourcing.

What’s the implication for talent?

So what does the rise in a contingent workforce mean for the individuals? In my view, there are three key factors:

• Individuals will increasingly need to understand and communicate their value to prospective customers. As mini enterprises, every individual will need to have a clear value proposition and be effective at communicating this to their target market.
• Depth of expertise will be increasingly valued. In order to differentiate from the crowd, individuals will need to demonstrate a unique selling point and this will increasingly be realised through their expertise. This can only be a good thing for individuals (who will have to constantly reflect on and build their strengths) and organisations (who will benefit from this higher level of expertise).
• Career development becomes an individual’s problem. Building on the theme above, individuals not organisations will take responsibility for development. Whilst this may take a cultural shift (especially in organisations that have struggled to modernise their HR practices) it does ensure individuals maximise value from the development (wouldn’t you if it was your own money?).

Good or bad?
So as an employer or employee, how do you think the rise of the contingent workforce will affect you?

Paul Daley is a director at recruitment process outsourcing (RPO) and talent management specialist, Ochre House – http://www.ochrehouse.com