Managing Risk: Contingent Labor, APAC Region

According to a 2012 Aberdeen Group survey, the average company’s workforce is currently 26 per cent contingent.

However, many calculations of ‘contingent’ workers do not take into consideration offshore projects or BPO workforces, nor often program offices that run specific projects. So, the real proportion of contingent workers may well be much, much higher. Indeed, some predictions see them comprising up to 50% of the workforce in the foreseeable future.

The advantages of contingent workers are clear. Contingent workers are generally highly skilled and experienced, they offer lower fixed costs and a higher degree of structural flexibility. Yet, as companies expand their dependence on outsourcing and third-party labour, organisational limitations become apparent.

Suddenly, HR processes and management practices that were set up with permanent employees in mind are no longer robust enough to manage high volumes of different worker categories. Most internal processes and systems are typically not adequate to manage the inherent risks of a contingent labour force, not to mention extract maximum value from this critical resource.