The contingent workforce has long existed, but its recent, rapid expansion is caused by companies undergoing digital transformations enabled by the Internet and app-based economies in two distinct ways: new technology is providing a wider range of people with easier access to a wider array of jobs and companies are embracing the digital work opportunities that will provide flexibility and autonomy to work where, when, and how employees want. 

Changing generational priorities in the workforce

One of the biggest catalysts pushing these workplace changes forward is changing workforce demographics. Over half of the workforce will be Millennial and Gen-Z by 2020. Combined, these generations are leading companies to focus more on intangible values than flashy perks because they tend to value culture over salary. In fact, 86 percent of Millennials would consider accepting a lower salary at a company whose mission and values align with theirs and only 19 percent of professionals would stay at a job that mollifies teams with treats like free food and games. 

Many career-minded young professionals are engaged through long-term professional benefits like career coaching, training, transparent communication, and work-life balance — all of which are better and more easily facilitated at scale by companies with modern digital infrastructures. This increased digitization that has lead to more flexibility for full-time employees has also dramatically facilitated the rise of the contingent workforce by providing easier access to short-term or temporary work. Already, some major enterprises employ more contractors than full-time employees and in less than a decade, contingent workers will represent the majority of the US workforce. 

Are apps enough?

Just as job search sites have made it easier to find full-time positions and app-enabled services have facilitated the rise of the gig economy, staffing agencies are also turning to apps to grow their access to and communication with contingent workers. Eighty percent of staffing firms are taking on digital transformation as a major initiative in 2020. Some of the bigger players, like Adecco, have built in-house apps to increase their reach. This kind of digital expansion both grows the contingent workforce and leads to a more diverse workforce as more groups have access to staffing agencies on their own flexible terms. 

However, the staffing industry still has a ways to go before it catches up with HR tech in order to continue this growth at scale. In the first three months of 2019, $1.7 Bn was invested in HR tech geared toward full-time employees. In comparison, the digital transformation for recruitment tech has lagged behind (the industry secured less than $1 Bn in VC investment for all of 2019). This dearth of tech-enabled solutions has left recruiters to use piecemeal SaaS products and manually handle even the most tedious, administrative interactions to source candidates who may not even make it through the hiring cycle. Research shows that 20 percent of contractors will renege on a job between offer date and start date and 15 percent of contractors will leave an assignment early. In spite of these numbers and available solutions, tech-driven products simply have not been deployed to analyze this contractor engagement vacuum and promote the kinds of communication that enhance retention and job satisfaction within the contingent workforce.

Technology is a recruiter’s autopilot and copilot

As the staffing industry continues building out its digitization efforts, implementing tech like automation and AI to act as a recruiter’s autopilot and copilot, respectively, will be crucial in order to rediscover and retain time for the most human aspects of staffing. According to our research at Sense, 66 percent of a recruiter’s day is spent on rote administrative tasks that can be put on autopilot with automation technology. 

Today, recruiters are only spending a third of their day on deploying the high-touch candidate experiences that are critical to maintaining the engaged relationships that provide the most ROI for companies. Automation can be used to take over tasks such as outreach reminders, submission updates, write-backs to ATS, scheduling touch points, and database outreach. Likewise, AI can best be used to copilot human tasks like resume parsing, data enrichment, performance prediction, and feedback analysis.  

According to our research and despite the contingent workforce’s recognized value, HR and staffing professionals are well aware that they need to do a better job at managing and communicating with their contingent workers. As the staffing industry evolves over the coming years by harnessing the power of our interconnectedness, we are not only going to see a larger contingent workforce, but one that is better equipped to perform and succeed on the job.