The Contract Component of the Workforce

The contract component of the workforce is important and becoming more so. According to the U.S. Bureau of Labor Statistics, four out of five organizations in the United States use contract talent.

Contract talent, which includes temporary workers, independent contractors, professional services, and essentially any work that is outsourced, already accounts for at least one-quarter of the work done in the United States and is growing at two to three times the rate of the traditional workforce. The Bureau of Labor Statistics projected in 2006 that the contingent workforce would experience 54% growth (cumulative) through 2012, more than double the rate of expected growth for the overall workforce.

The contract workforce is vital to the economy in terms of its current and projected size but also because of the type of work it performs. In the US, for example, more than half of all contract work falls in the professional and highly skilled categories. In many organizations today, some key projects are led by contractors. In most organizations, contractors perform mission critical work.

For many reasons, including flexibility, costs and earnings, contract work is an increasingly popular choice among all age groups in the workforce (especially Generation X and early Baby Boomers) and as its importance to the overall economy grows, it is becoming critical for organizations to have a contract talent strategy and plan.

This Research Practice Area is devoted to helping leaders – particularly in HR and Talent Management – become more knowledgeable of and involved in strategic contract talent management. As the custodians of competency and skills management, quality of hire measures, regulatory compliance information, market rates for various talent and the best sources for talent acquisition, HR leaders bring vital skills and information to the contract talent management process. Yet, in only one-third of the 319 organizations we surveyed in late 2008, was HR primarily responsible for contract talent management. Worse, HR may not be involved at all in about 40 percent of organizations surveyed (see results below).

In my organization, the following divisions or business units are primarily responsible for contract talent—i.e., engaging individuals with the right skills at the right price.



Should HR and/or Talent Management take the lead in contract talent management? We think so but we would like to hear your thoughts and experiences. Please use the comment box below to join the discussion .