Contingent Workforce Meaning: What It Is and Why It Matters in Recruitment

Understanding contingent workforce meaning is essential for recruitment success. Nearly 20% of the UK workforce now operates on a contingent basis, and that figure only continues to climb.  Understanding what this means for your organisation is now becoming an unavoidable aspect of how your workforce is built and functions. 

A contingent workforce consists of temporary workers, contractors, freelancers, consultants and gig economy workers hired on a non-permanent basis.  Unlike traditional employees, contingent workers operate under fixed-term contracts, project-based agreements or flexible arrangements without long-term employment commitments.

The UK currently has 1.54 million temporary workers (as of January 2025), up from 1.46 million the year before.  Add to those 4.39 million self-employed workers, and you’re looking at a substantial portion of the workforce operating outside traditional employment structures.  

What we see here is a reflection of how a modern workforce is fragmenting into multiple types of working relationships rather than a single, standard employment model.

What is a Contingent Workforce?

The core characteristic of a contingent workforce is that there’s no permanent employment relationship.  Contingent workers don’t have guaranteed ongoing work, they’re paid differently from salaried employees, and they typically don’t receive standard benefits like pension contributions or holiday pay.

Key Characteristics of Contingent Workers

The UK government’s definition of a contingent workforce provides useful clarity here:  

• Self-employed individuals run their own businesses, aren’t paid through PAYE and don’t have employee rights.  
• Contractors can be self-employed, have worker status or actually be employees if they’re engaged through an agency.  

These distinctions matter because they determine legal obligations and tax treatment.

How Contingent Workforce Differs from Permanent Employees

Think of contingent work as a spectrum rather than a single category.  At one end, you’ve got zero-hours contracts with minimal commitment from either party; at the other, highly paid consultants working on six-figure projects.  What unites them is flexibility in how, when and for how long work is carried out.

At this point, it’s worth being clear about what contingent work isn’t.  These aren’t people who’ve failed to secure permanent positions.  Many choose this path deliberately for autonomy, variety or higher earning potential, while others use it strategically to build experience across multiple sectors simultaneously.

The Main Types of Contingent Workers 

Temporary Workers 

Temporary jobs form the most recognisable category of contingent work. They’re hired through agencies or directly for fixed periods, typically covering seasonal peaks, parental leave or unexpected absences. The UK temporary-employment placement market is estimated at around £59.4 billion in 2025, underlining how deeply short-term hiring is embedded in business and professional services activity. 

Within the cultural and creative industries, self-employed workers now account for around 28% of the workforce (roughly double the share seen across the wider UK economy) which shows how heavily media, entertainment and creative businesses lean on non-permanent talent. In the screen sector specifically, research suggests that more than a third of workers overall, and well over 70% of those in film and TV production, are engaged on non-permanent or freelance contracts, making contingent labour the norm rather than the exception in these parts of the industry.

Professional services, marketing and PR teams mirror this pattern during peak periods and large transformation programmes. Law firms and financial advisory practices bring in temps to support transaction peaks and regulatory change projects, while in-house marketing, broadcast and digital teams scale up contingent resource around campaigns, product launches or production schedules. The arrangement works because both parties know the engagement has defined boundaries.

Contractors 

Contractors typically operate through limited companies or as sole traders.  They work on specific projects or time-bound engagements, often integrating with client teams on-site, and they charge hourly or day rates rather than receiving salaries.

You’ll find contractors throughout IT, construction and engineering.  They bring specialised technical skills for discrete projects without the organisation taking on permanent headcount.  The trade-off is higher rates in exchange for no benefits, no job security and complete responsibility for their own tax affairs.

IR35 legislation casts a long shadow over this category.  The rules determine whether contractors should actually be treated as employees for tax purposes, and recent changes in April have raised the thresholds that determine which companies must apply off-payroll working rules.

Freelancers 

Freelancers are almost always self-employed individuals with greater autonomy over how they work.  They often work remotely across multiple clients simultaneously, which distinguishes them from contractors who typically focus on one engagement at a time. 

The creative, marketing and writing sectors run on freelance talent.  These workers prize flexibility above all else, often deliberately avoiding the constraints of permanent employment.  They might work on retainers or project fees, and relationships can span years, even without formal employment contracts. 

Consultants 

Consultants occupy the highest tier of contingent work.  They provide expert strategic advice, typically at the project level, and they’re not responsible for implementing their recommendations, which is a crucial distinction from contractors who often do the hands-on work. 

Consultants generally earn more than contractors because they’re selling years of accumulated expertise rather than executing tasks.  Management consulting, financial advisory and specialist technical roles make up the bulk of this category. 

Gig Economy Workers 

The newest category operates through digital platforms.  The UK’s gig economy comprises 1.7 million workers and contributes around £20 billion to the UK economy, with many of these individuals finding work through apps like Uber, Deliveroo or Upwork.  Interestingly, 48% of gig workers also hold full-time jobs, using platform work to supplement income rather than as their primary source. 

This sector is economically significant despite ongoing debates about worker rights and fair compensation.  It also highlights how blurred the line between primary and supplementary work has become. 

Why Businesses Use Contingent Workforce

Cost Management and Financial Flexibility 

The financial case for contingent workers starts with what you’re not paying.  No permanent salary commitments, and no pension contributions, holiday pay, sick leave or benefits packages that add up to 40% towards employment costs. 

Managed Service Providers typically deliver meaningful overall savings on contingent staffing, especially when labour costs already comprise a large share of UK economic output.  Even small percentage reductions translate to substantial sums for larger organisations. 

Career Moves Group is one of the UK’s top performing suppliers for contingent talent acquisition, partnering with MSP programmes to support volume recruiting so employers can achieve these savings while maintaining quality and compliance.  We know full well that flexibility in cost structure matters just as much as the raw savings. 

Scalability and Operational Agility 

Economic uncertainty defined much of 2024 and 2025 and remains a worry for the upcoming year. Contingent workers give you the agility to respond without the anxiety of permanent commitments. 41% of companies expect to increase their use of contingent workers, according to Deloitte’s Global Human Capital Trends Report. 

For professional services firms, deal pipelines and regulatory deadlines turn quickly, so they rely on interim finance, risk and project professionals to flex headcount up or down at short notice. Creative, media and entertainment organisations also do the same when production schedules compress or a major campaign drops, adding freelance producers, editors, designers and copywriters to meet deadlines without locking in year-round costs. Tech and digital teams often supplement permanent staff with contractors during product sprints or platform migrations, giving them access to niche skills only for as long as they’re needed. 

You can also fill unexpected absences immediately. Someone goes on parental leave, falls ill long term or accepts another role, and a contingent worker can start within days rather than the months traditional recruitment often takes. 

Access to Specialised Expertise 

Some skills you need occasionally but don’t justify a permanent hire. Contingent workers solve this swiftly, letting you bring in expertise precisely when required, then part ways when the project ends. 

Digital and data capabilities are a prime example. Recent labour market analysis shows that around 18% of UK adults still lack the essential digital skills needed at work, and close to 60% of the workforce cannot perform every task that employers class as fundamental for modern roles. Separate research estimates that about 10 million UK workers lack basic digital skills and that fewer than a quarter of employees have received structured digital training from their employer, creating a sizeable capability skills gap that organisations cannot close through permanent hiring alone. 

This shortfall is particularly acute in technology driven functions that support professional services, media and marketing. Surveys of UK businesses highlight persistent recruitment difficulties in networking and cybersecurity roles, with around 40% of organisations struggling to hire in these areas and a third reporting shortages in data, AI and automation skills. Specialist contractors and freelance experts give firms access to these capabilities for critical projects (such as systems integrations, AIenabled analytics or complex campaigns) without entering long, expensive bidding wars for a small pool of permanent candidates. 

Skills shortages make this particular benefit even more appealing. Broader recruitment data continues to point to a structural shortfall of highly skilled workers across the economy, especially in knowledgeintensive services, which is why so many employers are turning to contingent arrangements to secure niche expertise at the point of need rather than trying to own every capability inhouse. 

Speed to Productivity 

Traditional recruitment can take months.  Contingent workers can often start next week, which makes a tangible difference for urgent projects or unexpected gaps. 

Contractors and consultants typically arrive project-ready because they’ve done similar work elsewhere.  They don’t usually need extensive onboarding or cultural assimilation; you brief them on specifics, provide access and they’re productive quickly. 

Technology platforms and streamlined onboarding processes have made this even faster, reducing time-to-productivity and giving hiring teams clearer visibility of who is available and when. 

Innovation and Fresh Perspectives 

There’s an often-overlooked benefit to bringing in external talent.  Contingent workers, particularly consultants, offer perspectives your permanent team can’t because they’ve worked across industries, seen different approaches and aren’t constrained by “how we’ve always done things.” 

That cross-pollination of ideas drives innovation.  Your permanent team might be too close to problems to see solutions, whereas someone who’s solved similar challenges elsewhere can bring ready-made frameworks and proven approaches. 

This complements internal expertise with external insight, challenging assumptions and introducing new thinking that can improve both performance and culture. 

Understanding the UK Contingent Workforce Regulations 

Regulatory Frameworks 

IR35 changes took effect in April 2025.  The turnover threshold increased to £15 million from £10.2 million, and the balance sheet threshold rose to £7.5 million from £5.1 million, while the employee threshold remained at 50. 

This means that companies meeting two or more of these criteria are classified as medium or large, losing the small company exemption from off-payroll working rules.  You then become responsible for determining employment status and collecting the right tax, and if you get it wrong, you’re liable for unpaid tax, National Insurance contributions and penalties. 

The Employment Rights Bill (introduced to Parliament on October 10, 2024) is working its way towards becoming law.  It brings significant changes for contingent workers, particularly those on zero-hours contracts. 

The Bill will ban exploitative zero-hours contracts, taking effect between 2026 and 2027.  Workers will gain rights to guaranteed hours based on a 12-week reference period, receive reasonable notice for shift changes and cancellations, and be entitled to compensation for cancelled shifts. 

Compliance Challenges 

Worker classification sits at the heart of compliance risk.  Misclassifying contractors as employees creates liability for unpaid tax and National Insurance going back years, plus interest and penalties, so regular compliance audits aren’t optional if you’re using contingent workers at scale. 

Umbrella company regulations are taking effect within six months as of October 2025, adding another layer of complexity.  You need clear documentation of working arrangements, proper contracts that reflect actual relationships and managers who understand employment status determination. 

Alongside tax and status, organisations must consider Agency Workers Regulations, Working Time Regulations, holiday pay rules and any sector-specific licensing or safeguarding requirements, particularly in regulated industries. 

Contingent vs Permanent Workers 

Understanding the fundamental differences helps you determine the right workforce mix for your organisation.

	Contingent Workers	Permanent Employees
Employment Duration	Fixed-term, project-based or flexible	Ongoing, indefinite
Benefits & Entitlements	No pension, holiday pay or sick leave in most cases	Full benefits package
Cost Structure	Higher hourly/daily rates, minimal overhead	Lower rates, significant overhead
Flexibility	Easy to scale up/down	More difficult to reduce headcount
Loyalty & Knowledge	Project-focused, limited organisational knowledge	Long-term commitment, deep institutional knowledge
Regulatory Status	Self-employed, contractor or worker status	Employee status with full rights
Management Complexity	Often requires VMS/MSP systems	Standard HR processes

Neither approach is inherently better; most organisations need both, deployed carefully based on the nature of the work, skill requirements and business volatility. 

How Contingent Work is Changing 

Explosive Growth Trajectory 

It seems clear that contingent work is becoming a normality rather than the exception.  By the end of this year, 35% of the global workforce will be gig workers, according to industry projections, and some forecasts suggest contingent workers will approach 50% of the total workforce. 

European markets are also forecasting contingent talent at 40%.  Meanwhile, the UK’s employment rate stands at 75.0% for July–September, with unemployment at 5.0% according to the latest ONS data, underlining how work is being reconfigured rather than disappearing. 

These points demonstrate direct structural change in how work is organised and delivered, shifting from a predominantly permanent model to a blended workforce. 

Technology-Driven Transformation 

Technology is rapidly changing how organisations find, engage and manage contingent workers.  41% of employers plan to eliminate degree requirements for contingent roles within 18 months, according to Darwinbox’s study, as skills-based hiring replaces traditional credential requirements. 

AI-driven workforce analytics are reducing costs and improving productivity by helping employers match talent to demand more accurately.  Predictive analytics identify high-turnover sites before problems escalate, while real-time workforce visibility helps prevent overstaffing. 

Vendor Management Systems and Managed Service Providers make managing hundreds or thousands of contingent workers feasible, giving organisations consolidated billing, performance tracking, compliance monitoring and contract management through single platforms. 

The Flexibility Paradox 

52% of UK workers say they’ll only consider roles with flexible working, and the same research shows 39% of UK employees are actively considering a new job in the next 12 months.  On the surface, flexibility appears non-negotiable to the modern workforce. 

However, the reality is more complicated.  Three days in the office and two days at home has become the standard split in many organisations, and candidates are increasingly accepting less flexibility due to competitive job market conditions, which redistributes some leverage back to employers. 

The Flexible Working Act’s implementation in April 2024 made day-one flexible working requests standard, but only 44% of UK workers had discussed flexible working with managers by August 2024.  Legal rights don’t always translate to practical application, which is one reason contingent and flexible work arrangements are evolving in parallel. 

Building an Effective Contingent Workforce Strategy 

Getting contingent workforce management right requires deliberate strategy, not ad hoc hiring, and that is the thread that runs through Career Moves Group’s own advice on building a contingent recruitment strategy.  Rather than starting with headcount, it helps to begin with a clear picture of the work you need to deliver and where a contingent talent pool genuinely adds value instead of simply filling gaps. 

Assessment 

Start by assessing your actual needs.  Which roles are genuinely suitable for contingent rather than permanent staff, and where do you need stability and deep institutional knowledge?  Analyse seasonal patterns and project-based demand, and calculate the cost-benefit by function, because not everything should be contingent even if it could be. 

Framework and Compliance 

Establish a governance framework next.  Define approval processes for contingent hiring, set budget controls and spending limits, and create vendor management protocols, because without governance, costs spiral and compliance risks multiply. 

Choose your engagement models carefully.  Direct hiring works for occasional needs, recruitment agencies suit regular but moderate volumes, Vendor Management Systems provide oversight and control, and platform-based models suit gig work, so match the model to your volume and complexity. 

Implement regular IR35 status reviews and document working arrangements clearly in writing.  Train hiring managers on employment status determination and prepare now for Employment Rights Bill changes coming in 2026–2027, because a compliance failure is costly and hard to correct. 

Integration 

Integration and onboarding still matter tremendously, even for temporary staff.  Create streamlined processes that get contingent workers productive quickly, provide necessary access and tools, and set clear expectations and deliverables upfront. 

Don’t let contingent status become an excuse for poor management.  The more effectively you integrate contingent workers into teams and communication channels, the better the outcomes for both performance and culture. 

Monitor and Adapt 

Track cost per hire and time-to-fill, and monitor quality of work and stakeholder satisfaction.  Analyse whether your workforce mix is actually delivering the flexibility and cost savings you expected, rather than assuming that contingent automatically means cheaper or better. 

Refine your approach based on data, not assumptions.  Drawing on more than three decades in temporary and contract recruitment, and a track record of placing thousands of candidates across HR, finance, marketing, broadcast and digital roles, Career Moves Group consistently emphasises applying the same high onboarding standards to contingent and permanent staff to protect culture and productivity. 

Frequently Asked Questions