A woman smiling and holding a tables appears beside the title: 5 types of Contingent Workers.

Mastering Extended Workforce Management: Understanding the 5 Types of Contingent Workers to Hire for Your Business

Managing a contingent workforce can be a complex and challenging task. With the rise of the gig economy, contract workers are becoming a primary choice for a workforce strategy that’s built to last the fluctuating markets ahead. Freelancers are expected to make up over half of the U.S. workforce by 2027, and they already comprise up to 50% of the average company’s workforce – organizations utilizing them are going to need to stay agile and adaptable.  

These numbers can tell us a few things. One, contingent workers are going to have progressively more influence when it comes to taking on projects and shaping their places of work and two, companies must start planning for this future now. 


Why are there different types of Contingent workers? 

In an ever-shifting economy, creating a niche outside the traditional job is proving to be a successful strategy for many professionals. Flexibility, speed, and multiple sources of income based on short-term jobs or assignments are just a few reasons employees are choosing to freelance in the global gig economy.   

Our 2023 State of the Contingent Workforce Report is packed with data and insights for a deeper dive into contingent worker expectations and shifting behaviors.   

For organizations, understanding the different types of freelance workers and how they operate is crucial to success. By understanding these nuances, employers can make informed decisions about which employees are set to be the best fit for their talent ecosystem. That can be helpful in avoiding costly missteps in any workforce management strategy.  

Two independent contractors are shaking hands and smiling

1. Freelancers/Independent Contractors

These workers are self-employed, can work remotely, and provide their services on a project basis that is often specialized. They tend to have control over how they complete work, operate independently, and are responsible for their own taxes and benefits.

HOW THEY HELP: organizations can be very precise about the skills they need and pay for while projects and tasks are completed on a flexible and cost-effective basis without the long-term commitment of hiring a permanent employee.

2. Temporary workers sourced directly

These workers are sourced by the company directly by leveraging the brand, curated talent communities, technology, networks, and any other acquisition channels to find talent for a set duration of time. They are typically used to fill short-term gaps in staffing or to support specific projects and are often paid on an hourly or daily basis.

HOW THEY HELP: provide flexibility and cost-effectiveness to organizations that need short-term staffing support on projects or tasks.

Two temporary workers sourced directly are collaborating and viewing a project on a laptop.
A group of temporary workers sourced by agencies is collaborating on the extended workforce around a table.

3. Temporary workers sourced by agencies

These workers are hired through specialized temporary staffing agencies which take care of recruiting and vetting candidates, hiring, and sometimes also managing the workers. The company pays the agency, which in turn pays the workers.

HOW THEY HELP: provide support and learn all company nuances and needs while taking on the administrative burden of recruitment, payroll, and benefits. Removing the task of sourcing and pre-qualifying candidates allows organizations to focus on their core business activities without the additional overhead of temporary staffing.

4. Platform Workers

A broad term that refers to workers who provide services on a flexible or on-demand basis. These independent contractors have access to a global market and typically work through online platforms to provide services or task-based work. Operating on a project-by-project basis, they are usually paid through the platform directly. While they get to choose when and where they work, they may face competition, lower pay rates, and not have access to typical benefits or job security.

HOW THEY HELP: provide flexibility and scalability quickly to meet changing business needs and complete specialized, on-demand tasks quickly and cost-effectively.

Three platform workers are looking at a tablet.
Two statement of work contingent employees are working on a project together and smiling.

5. Statement of Work (SOW) Consultants

These workers are hired to complete a specific project, and their work is defined by a detailed statement of work (SOW) outlining the scope of the project, deliverables, and timelines. They are often highly specialized and have expertise in areas such as IT, finance, or marketing.

HOW THEY HELP: provide highly specialized expertise and knowledge while completing complex projects quickly.

Learn how to attract and keep your extended talent  

How you manage and engage with your extended workforce is just as important as where you source from and how meticulously you searched for the perfect individual to do the task. 

Similarly to FTE’s, extended workers increasingly expect more than a paycheck. Understanding their needs and expectations is key to success and talent retention. The most important workplace attributes vary across generations, and with recessionary clouds looming, attracting and keeping non-employee workers is a must in a well-executed extended workforce strategy.  


Want to know more about how managing your contingent workforce well could set you apart from your competitors? 


Get the 2023 State of The Contingent Workforce Report


Magdalena Wolak