Contingent Labor Makes Up 28% of Workforce in Large Organizations: MBO Partners

August 26, 2022

On average, contingent labor makes up 28% of a large company’s workforce, according to a report released earlier this month by MBO Partners.

MBO Partners defines casual labor as all non-permanent workers, including agency workers, in-house temporary workers, freelancers, independent contractors and declaration of employment consultants.

Over the next 18 months, 67% of businesses expect their use of casual labor to increase. Only 5% of respondents expect their consumption to decrease. And over the next five years, nearly eight in 10 companies expect their use of contingent labor to increase, while only 6% expect it to decrease.

MBO Partners now expects the use of casual labor to increase to 33% in 18 months and 36% in five years.

Additionally, 82% of organizations said skilled contingent workers made up half or more of their contingent workforce.

The main reasons for using contingent labor for 38% of companies are to meet temporary workload needs, followed by increasing productivity, 35%; doing tasks faster, 33%; access to specialized skills and hard-to-recruit talent, 28%; and save money, 14%.

Other discoveries:

  • Key challenges in hiring casual labor include ensuring the quality of work, finding casual labor with the necessary skills, and managing turnover and transitions.
  • 60% of companies said they are actively using direct sourcing for contingent labor, 28% are experimenting with it, and 12% are not currently using direct sourcing.
  • 77% of HR professionals expect their company to increase its use of internal freelancer marketplaces over the next 18 months, and 13% expect their use to increase substantially.

The 2022 study includes responses from 504 HR managers, directors, vice presidents and human resources directors from large companies. In addition, in-depth interviews were conducted with 16 senior HR professionals from large organizations.

Michael A. Bynum