Differing HR Practices for Standard and Contingent Employees

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Differing HR Practices for Standard and Contingent Employees
Anneke Zwart, Student (University), Netherlands

A common way to differentiate the workforce is by making a distinction between standard and contingent employees:
- Standard Employees are those employees who work for an organization on a permanent basis. They have established an ongoing relationship with their employer.
- Contingent Employees perform a job on a temporary basis. They perform jobs that are based on a contract of limited duration.

Besides the obvious differences in duration of the relationship with their employers, the HR practices induced to manage these categories of employees also differ:
- Standard workforce HR practices: HR practices for the standard of permanent workforce are “high-road” practices. These HR policies are characterized by strong employee commitment and large investments. High-road HR investments include monetary incentives, investments in employee training and empowerment, and better job security.
- Contingent workforce HR practices: because contingent employees have a weaker bond with employers, as compared to the standard workforce, fewer investments are dedicated towards these employees. Those so-called low-road HR investments are characterized by weaker employee commitment.
Source: Stirpe, L., Bonache, J. and A. Revilla (2014) “Differentiating the Workforce: The Performance Effects of Using Contingent Labor in a Context of High-performance Work Systems” Journal of Business Research Vol. 67 Iss. 7. Pp. 1334-1341

Benefits of a Contingent Workforce
David Wilson, Manager, Canada
Hi Anneke: Interesting post:
- Are there advantages of using a contingent workforce? The use of seasonal employees or contingent employees may actually help deliver services to customers, while offering summer employment and jobs for students and others.
- I am not certain employee commitment is lower for people employed in seasonal positions.
- In addition, many individuals use temporary jobs as a way of getting into an employer's workforce.
- In some organizations, seniors are often interested in part-time or full-time temporary positions.

Advantages Disadvantages of Standard & Contingent Employees
K.Narayana Moorthy, HR Consultant, India
A contingent group of employees is one with people working for an organization on a non-permanent basis. The use of contingent 'employees' is an organizational choice/strategy.

Advantages of contingent employees are:
- Flexility in the use or number of employees and resources;
- Saving costs and taxes; and
- Savings in long-term compensation costs.

Disadvantages of contingent employees are:
- Lack of loyalty of this group to the organization;
- Their training costs; and
- Potential disturbance of the organization's core morale and culture.

Standard employees have a fixed and continuous employment; payment of wages; maintaining records; hours of work; minimum wage; equal pay for equal work; benefits plan; and leaves with costs.

Advantages of standard employees are:
- Manufacturing vast quantities to keep costs down;
- Safety & quality testing is easier; and
- Setting up mass production is easier.

Disadvantages of standard employees are:
- The contract binds employees and organizations;
- Special obligations to deal with them fairly;
- Legal responsibilities.



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