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Independent Contractors or Contingent Employees

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The recent economic downturn following several decades of corporate downsizing has had an interesting result in the labor market. There is a veritable army of independent contractors (ICs) and services providing contingent workers (CWs) available to fill any need. There is no job that cannot be completed using ICs or CWs. The question is: when is this the best alternative?

• Discuss the advantages and disadvantages of independent contractors and contingent employees.
º Explain the impact on operations, particularly production and efficiency.
º Explain the impact on costs.
• Is there an impact on employee morale? Explain with examples.

• What are the legal issues involved in choosing to buy talent using ICs or CWs?

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Solution Summary

The independent contractors or contingent employees are examined. The impacts on employee morale are given.

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Due to the change in the economic environment, many organizations are choosing to use ICs or CWs instead of contractual employees. One of the main disadvantages of this strategy is related to the potential for inefficiency and lack of productivity. "Because a contingent worker manages himself, a company has only monetary control over the worker" (Reeves, 2013, para 4). This means that the company cannot set specific hours for a contingent employee and can run into some difficulties with disciplinary action to correct the productivity and inefficiency issues since the CW is not an actual contracted ...

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