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changing nature of contingent workforce

The Changing Nature Of The Contingent Workforce

changing nature of contingent workforce

In the last decade the Irish workforce has dramatically changed and one such development has been the changing nature of the contingent workforce. What was traditionally seen as a low skilled disposable workforce has evolved to become a key strategic element of organisations’ workforce strategies.

 

Defining Contingent Work

There are several different definitions of ‘contingent work’ including direct-hire temporary staff, direct-hire fixed-term contract staff, independent contractors and perhaps the most prevalent of all, those engaged through recruitment agencies. This clearly demonstrates that temporary or contingent staff are a heterogeneous rather than a homogenous cohort so a ‘one size fits all’ policy to manage them is unlikely to be successful.

 

The Traditional View

A traditional view of contingent staff was that of low skilled workers who were paid less than permanent workers, likely to be female or minority and likely to be working in administrative or support roles – essentially a ‘disposable workforce’. In the early 1990s there was a view that the spread of contingent work practices helped perpetuate a two tier labour market system with contingent workers on the second, more disadvantaged tier.

 

The Contemporary View

The more contemporary view is that contingent work represents liberation rather than isolation; it increases flexibility and personal control and, reflective of the value of their skills, some contractors (e.g. in IT) earn more than permanent workers. Contingent work has continued to spread across virtually all disciplines including accounting, law, medicine, banking, management etc. Another manifestation of this is how ‘Interim Management’ positions for C-level executives are now facilitated through a network of executive search firms in Ireland and worldwide.

 

Demand

There are a number of factors that underpin the increased demand from firms for contingent workers. Using workers with specialised skills on a project basis (especially in the IT area), filling temporary absences, facilitating employees’ requests for part-time hours and looking at workers on a ‘try before you buy’ basis are several of the reasons organisations choose contingent workers. However the key demand drivers would seem to come from companies looking to create value and competitive advantage through cost efficiencies and through the use of flexibility.Through this flexible model, organisations can adjust the types of skills employed in line with fluctuations in demand without adding to the long-term cost of retaining these particular skills.

 

Relevant Developments in the Recruitment Industry

In parallel to the growth of regular recruitment agencies, Managed Service Providers (MSP’s) have been a major development in the recruitment industry, linked directly to the growth of contingent staffing practices globally. Staffing industry analysts define an MSP as “a company that takes on primary responsibility for managing an organisation’s contingent workforce programme”. Generally MSPs provide their clients with a Vendor Management System (VMS), which is “an internet-enabled contingent worker sourcing and billing application”. We have a number of the major global MSPs operating in Ireland at present and this is again symptomatic of the nature of large scale contingent workforce management practices.

 

To give an idea of the scale of the global market for contingent staffing it was estimated $100 billion is spent globally on contingent staffing under management through a VMS, an MSP, or both and the figure is continuing to grow. The estimated global temporary agency staffing labour in 2013 was $327 billion. It is important to point out however that the growth in the use of contingent labour is not only in large MNC’s but in small and medium-sized indigenous companies also. These trends indicate that this paradigm of contingent work is here to stay and if anything set to increase in prominence.

Posted by Recruitment Consultant, Sigmar on 7 December 2017

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Irish jobs market reaches 20-year high, as office re-entry drives unprecedented levels of recruitment activity

Irish jobs market reaches 20-year high, as office re-entry drives unprecedented levels of recruitment activity

Sigmar Recruitment today reports a record high number of job placements over April, May, and June 2021. The number of placements during this period is higher than any other quarter in the recruitment company’s 20-year history. Current figures are up 6% on the previous record set in 2019 before the pandemic. As one of the largest recruiters in Ireland, Sigmar has offices across the country and is present in all professional sectors. The first half of the year saw strong, consistent growth with job placements breaking all records in the month of May, with June accounting for the second-highest month ever. Commenting on the rebound of the labour market, Sigmar founding Director, Robert Mac Giolla Phádraig says: “The jobs market in Ireland has never been stronger or more buoyant than it currently is. We’re seeing several macro trends converge all at once, which is creating significant churn in the market. Remote working has literally opened up a world of new opportunities no longer bound by location. This is coupled with a rising tide of consumer confidence, as many professionals find themselves in a stronger financial position than before the pandemic. “The last 18 months has asked big questions of us all, and the humdrum of lockdown has created a desire for change which is now resulting in unprecedented numbers of people moving jobs. Employee loyalty is increasingly under question, with remote work being less enjoyable, many workers are now committed to the experience of work over the employer, adding further to the current levels of churn.” IT accounted for one-third of all job placements throughout the quarter, followed in order by Financial Services, Sales & Marketing, Accountancy, Life Science & Manufacturing, Office Support, Public Sector, Construction, Professional Services. Business confidence has also grown steadily over the course of the year, as vaccination gathered momentum. The “low-touch economy” is booming is sectors such as e-commerce, digital, and logistics. Says Mac Giolla Phádraig: “The resurgence of permanent recruitment is somewhat unique to how we’ve rebounded from previous downturns, where we typically saw flexible work return quicker.” Although the vast majority of job placement in Q2 were understandably remote, Sigmar reports that the tide is beginning to change with the majority of employers now committing to hybrid work over the coming three months. Mac Giolla Phádraig advises: “As we now choose our workplaces, at a time when the power dynamic has shifted to the employee, employers need to ensure adequate work practices to reconnect the workforce with the workplace equitably. There is an inherent risk that new workforce inequities may emerge, such as “proximity bias”, where those closest to the centre of influence get greater recognition and therefore promotion opportunities as opposed to remote workers. When it comes to individual contribution the opposite could be argued that remote workers get the benefit of having less in-office distractions and their output is therefore greater.” Mac Giolla Phádraig likens remote work to long-distance relationships, which in many cases don’t work out. “We’ve gone from “living” with our employees in an office environment to long-distance relationships, which often sees commitment recede over time. The context of location also opens up new experiences and possibilities, which are now being explored on a scale never before seen.” He adds, “if we thought the war for talent was tough, just wait for the battle of attrition. It’s now emerging as the number one challenge for businesses across the globe.”