Dive Brief:

• Fewer than a third of the companies surveyed by Work Market believe they’re as productive as they should be. Hiring contract workers is the way many businesses are addressing the problem, the 2016 Workforce Productivity Report shows.
• Work Market CEO Stephen DeWitt says that wages are businesses’ largest expense, so companies are now asking when — not if — they should start hiring part-time or contract workers.
• The productivity report showed that 95% of employers in the study use contract workers. Contractors account for 21% to 40% of the workforce at 34% of the companies cited and 0 to 20% of the workforce at 40% of the companies. Most company executives, 83%, believe contractors are just as productive, or more, compared to full-time employees. Nonetheless, only one-fourth of employers plan to hire more independent workers in the following three years.

Dive Insight:

Employers struggling to find workers with special skills, while keeping recruiting, hiring and benefits costs down might look to part-time employees or independent workers to fill positions. A flexible workforce offers on-demand skills companies need to stay productive.

Employers might disagree on whether FTEs or contractors are the most skilled, loyal or productive among workers, but they must comply with FLSA’s rules on distinguishing between the two. Of course, that's been of considerable debate in the courts so far as companies like Uber push the definition of contract worker to its limits.

HR should ensure they remain part of the conversation about hiring contract staff, as some companies allow frontline staff to hire contingent workers.