Nearly twelve years ago, businesses across the world were faced with one of the worst financial crises they had ever experienced. Forced to execute mass layoffs and organizational restructuring, many enterprises were unsure of how to approach the relative future of their workforce given the uncertainty of the Great Recession. With unpredictable demand for products and services given the economic trepidation, it was incredibly difficult for business leaders to enact intelligence-led workforce planning even when signs of recovery began to trickle across the globe.

Back in early 2008, anywhere between 10% and 12% of the average organization’s total workforce was considered “contingent,” which is defined as non-employee workers comprised of traditional temporary workers (sourced via staffing agencies and vendors), independent contractors, freelancers, gig workers, and professional services. Heading into 2009, that figure blossomed to over 17%, a figure that represented the largest spike in non-employee workforce utilization in recorded business history. (And, just a year later, it ballooned again, to 20%.)

Today, with a global pandemic as its backdrop, the business world faces even more turmoil. Unemployment is at record levels. Various industries face the toughest challenges they’ve ever experienced. And, business leaders must develop the most effective plans for survival given revenue shortfalls, lower headcount, and pervasive uncertainty. Pre-pandemic, nearly 43% of the average company’s workforce was considered contingent; in mid- and post-pandemic times, that figure could experience another increase, depending on several factors: the trajectory of economic recovery, the specter of hotspot-specific lockdowns, and the volatility of traditional hiring.

I spoke to various technology leaders about the possible growth of contingent labor and the agile workforce in the second half of 2020 and the various issues that will continue to afflict staffing during these challenging times:

Brian Hoffmeyer, SVP of Market Strategies, Beeline

“I think that we will continue to see a lot of volatility in the contingent workforce for the remainder of 2020 as there is so much that is still unknown about so many things – what the shape of economic recovery will look like, whether growing COVID cases will cause governments to implement new shutdowns, and more. That said we think that certain verticals – financial services, big retail, etc. – will continue to use a large number of contingent workers and that companies across all verticals will continue to work to get their arms around their workforces and look for cost savings opportunities.”

Neha Goel, VP of Marketing, Utmost

“Amidst the economic uncertainty we’re experiencing this year, companies are demanding flexibility and agility. And I believe this clearly indicates increased use of the extended workforce; not necessarily a massive spike, but certainly an uptick. For instance, if you were to ask the average enterprise CFO today if they preferred fixed labor costs or flex labor costs, the winning answer would resoundingly be in favor of flexibility. Business leaders right now are concerned with getting more done with fewer resources in the most efficient way. And I do think that the businesses that have clear visibility into the structure and cost of their entire workforce (both external and full-time) will be the ones better positioned to deal with critical capability shortfalls, knowledge gaps, and global market volatility. 

One of the things we’re focused on at Utmost is time-to-productivity. We’re seeing shorter cycle times as the velocity of workers coming-and-going accelerates; and often, these workers are a high-impact cross-section of talent driving core business. The agility this workforce offers is really key, and one question we think about is: how are companies going to do this productively? To successfully scale their extended workforces for business agility and speed, enterprises are going to need to do it differently; they’ll need to bring on talent more efficiently and they’ll require better tools and visibility to inform the decisions they’re making.”

Donna Wilczek, SVP Product Strategy and Innovation, Coupa

“No downturn lasts forever. Resilient business leaders know that the actions they take today will prepare their organization to thrive when the economy recovers. This means increasing agility to invest, now or later. Increasing flexibility by adding contingent workers at the right time is one of the levers smart companies are using to protect their business.”

Arun Srinivasan, General Manager, SAP Fieldglass

“Embracing the external workforce — and the digital tools that empower them to manage it effectively — can go a long way toward ensuring business continuity, delivering favorable outcomes, and positioning organizations ultimately to be stronger post-coronavirus than before.”

“Recovery is likely to arrive soonest — and last longest — for organizations that can easily find and manage external workers whose high-value skills complement those of traditional employees to create enduring value for customers.”

Mynul Khan, Founder and CEO, Field Nation

“The pandemic’s health crisis has created an economic crisis that’s driving the global recession and financial crisis for companies. We‘ve seen massive unemployment, and at the start, it felt like layoffs might be temporary — but as the crisis endures, it’s forcing companies to reevaluate how they do business. Specifically, if companies have a workforce tied to their business volume, that labor segment is shifting from permanent to on-demand. This labor shift, a rising trend before the crisis, is being accelerated. Companies that are new to this shift will be pleasantly surprised to find that on-demand workforce solutions have matured tremendously. Online platforms like Upwork and Field Nation are proving that sourcing, managing, and navigating payments are fast, simple, and effective during times where agility is the winning difference.”

Rich Oakes, President, GigSmart

“The Gig Economy has empowered millions of American workers seeking flexibility and control the means to monetize their talents outside of traditional structured employment. This is why is it is inarguably one of the fastest growing segments of the labor market.

Based on the current crisis, the number of traditional workers now interested in more flexible working models has exploded almost overnight. As companies rebuild their staffing rosters, they’ll need to incorporate contingent labor into their overall plans in order to restart growth in this challenging environment.”

Faris Mersi, Co-Founder and CEO, Jarvis

“If COVID-19 has proved anything, it’s that a company without a contingent workforce (and especially one that doesn’t allow remote work) is much like a group of soldiers camping in a gaping hole underground while the enemy opens fire from above. In other words, HR leaders should be having the same conversations that investors have about diversification. We are already seeing important changes in the state of work and I expect contingent work to become a high-priority item for business leaders in the months to come.”

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Tagged in: Christopher Dwyer, Complex Categories, Contingent Workforce, Future of Work, Innovation, People, Solution Providers, Strategy, Technology