The COVID-19 Pandemic’s Impact on the Contingent Workforce Industry (Part One)

March 26, 2020Posted inArticles, Complex Categories, Events, Lists, People, Process, Solution Providers, Strategy, Technology
The COVID-19 Pandemic’s Impact on the Contingent Workforce Industry (Part One)

Ardent Partners takes the severity of the COVID-19 pandemic with the utmost seriousness. Please click here to read our approach in these uncertain times.

Around these parts, the phrase “the world of work is changing” has often been synonymous with the innovations happening the arenas of talent acquisition, digital staffing, and enterprise technology. The Future of Work, as I’ve often stated, is founded on the notion that businesses can truly optimize how work is done through the convergence of talent engagement evolution, the impact of new and expansive technologies, and the transformation of core business thinking.

Today, however, the realm of “change” means so much more than it did just a few weeks ago. The COVID-19 pandemic is actively forcing businesses to, essentially, reimagine how to get work done in the face of significant revenue shortfalls, disruptions across the supply chain, anxious customers, and an uncertain future.

Major organizations are cutting or furloughing significant percentages of their workforce, while small businesses are facing the worst financial crisis they’ve seen since the 2008-2009 economic recession. This truly has far-reaching implications on how businesses view the totality of their workforce not just over the next few months, but well into 2020 and beyond.

I spoke with many contingent workforce industry leaders over the past few days to gain additional perspectives on the impact of this pandemic. (Stay tuned for Part Two of this special article series.)

Brian Hoffmeyer, SVP of Market Strategies, Beeline

“While, in many ways, it is too soon to tell what the impacts will be, there will be many and we will feel them for a long time. We’ve seen certain industries (e.g. travel) negatively impacted already and they are cutting contractors. Other sectors (finance, retail giants, etc.) are hiring to deal with a surge in demand for contractors to support things like refi-processing and delivering orders. We’ll continue to see those kinds of fluctuations.

Customers are also trying to figure out how to get contractors that can work from home the tools and hardware needed to do so. That change will be permanent in my view – this crisis will accelerate the “work from home revolution.” It will also push people to keep better track of their contractors and what they are doing and where.”

Andrea Sugden, Chief Global Sales Officer, Workforce Logiq

“Workforce management is in uncharted territory. Whether staffing companies and MSPs are benefitting from a surge in light industrial hiring (distribution, fulfillment, and customer support roles), or being hit with reducing professional and skilled knowledge workers, now is the time to provide flexibility, service differentiation, and expert advisor guidance to help clients navigate through a hyper-uncertain business environment.

It’s easy to look competent and manage through the good times; it’s the tough times, like today, that will separate out those with the strongest business models, technology platforms, executive teams, solution differentiation, and industry expertise. Organizations that have been truly investing in reimagining contingent labor management will be cementing their client relationships – and will emerge stronger on the other side. And once we do emerge, organizations that hadn’t previously embraced contingent talent will likely be more open to its flexibility and cost benefits – including increased demand for a larger remote talent pool.”

Corinne Ripoche, President, Pontoon

“We are using advanced data modelling to track the impacts of the virus across our customer base. We have live impacts across metrics like timesheet submission, time-to-hire, requisition cancelation, and requisition creation. While there are some patterns emerging, it is still too early to tell in full what impacts are.

Pontoon moved early and aggressively across its delivery model to enact our previously tested “remote delivery hubs.” These are now in place globally with no slowdown in outputs or quality.

We are seeing many customers are trying very hard not to offboard key contractors as they want to be well-placed for the rebound. Some key customers have upped their hiring for certain hard-to-fill role types in the immediacy, knowing there will be opportunity. Our customers in FMCG, online retail, and healthcare/pharma are seeing huge spikes in volume.

[Pontoon] expects there to be a surge or “bounce” in the MSP space much sooner than RXO. The need to immediately pick back up across sectors will be evident, and some industries will rebound much faster than others.”

Erika Novak, Head of Client Services, Utmost

“The case for a third classification of workers have been on the precipice for years. There is too much overlap and gray area in defining one either as an employee or an independent contractor. I think the result of this pandemic will shine brighter light onto the category of workers who haven’t been adequately defined – the “solopreneurs” that epitomize the Gig Economy and individual entrepreneurship.

With current law and the government’s stimulus package, this worker group qualifies for far less emergency relief than regular employees and small businesses, including things like disaster relief efforts, unemployment benefits, unemployment insurance, emergency paid sick leave, and family medical leave. I think the loud and tumultuous cry from folks most likely to lose it all from the global pandemic and social distancing may be the unfortunate catalyst needed to evolve United States law to contemporary times.

I believe companies have realized that it’s more difficult than they thought to communicate with their people: employees, contractors, suppliers, etc. To attempt to give a message of comfort, condolence, emergency, or unity has shown to be a manually labor-intensive activity that still misses large groups of workers, specifically those who weren’t given a company email address. I expect to see a movement around corporate communications, HR, and HRIT on being able to efficiently identify and communicate with all resource types.

In the short term, I believe business owners are going to focus on core projects and company strengths. To get back to revenue-producing business, folks will focus on what has historically made them money. I think access to capital will decide whether new innovation, services, or programs are funded. Will they look to internal folks willing to do more or show off a different skill set or hire an outside professional? Internal mobility and stretch assignments will likely outweigh consulting and contractors for a little while.

I believe it is by industry rather than employment type that will take the brunt of the pandemic’s effect.  The market will “re-dictate” which skill sets are deemed essential and important. As those skillsets flourish, individuals will get to decide whether to take employment roles or to build their own businesses.  However, it’s of those skills deemed “un-essential” that we need to care for.”

Stay tuned to CPO Rising for Part Two of our special series on the COVID-19 pandemic’s impact on the contingent workforce industry.

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