Hiring guideRead at source, 28 September 2026

Contingent Workforce: What Contingent Workers Are, What They Cost, and When to Hire Direct

A contingent workforce is the people who work for you without an expectation of ongoing employment: temps placed by an agency, independent contractors, on-call workers and staff supplied by contract firms. In July 2023, 4.3 percent of workers, 6.9 million people, held contingent jobs, according to the Bureau of Labor Statistics. For frontline employers the question is cost: an agency temp carries a 25–100% markup on every hour.

What is a contingent worker?

A contingent worker is someone whose job is not expected to last. The Bureau of Labor Statistics, which runs the only federal survey of this group, defines it this way: “Contingent jobs are those that people do not expect to last or that are temporary. These workers do not have an implicit or explicit contract for ongoing employment in their jobs.”

Two things follow from that definition. First, contingent is about the expected duration of the job, not who signs the paycheck: a seasonal hire on your own payroll can be contingent, and a long-term agency temp may not count by the BLS test. Second, the business world uses the phrase more loosely than the BLS. When an HR team or a vendor says “contingent workforce,” it usually means everyone who is not a permanent W-2 employee: temps, contractors, freelancers and outsourced staff.

Types of contingent workers

The BLS survey measures contingent jobs alongside four “alternative work arrangements,” and those four are the working categories most employers mean:

These categories overlap with the contingent count rather than adding to it: an independent contractor with a steady book of clients is in an alternative arrangement but not necessarily in a contingent job.

How the types map to frontline hiring

• Temp agency workers fill warehouse, production, hospitality and event shifts. The agency is the employer of record and bills you a marked-up hourly rate.
• On-call and per diem staff cover healthcare and care shifts; see PRN staffing. How waiting time is paid is covered on on-call pay laws.
• Independent contractors are common in trucking (owner-operators; see owner-operator recruiting) and in trades, and are where misclassification risk concentrates.
• Contract firm staff handle outsourced functions such as security, janitorial or facilities work at your site.

How many contingent workers are there?

The latest survey is the July 2023 Contingent Worker Supplement, published on 8 November 2024. Its headline: “In July 2023, 4.3 percent of workers--6.9 million people--held contingent jobs on their sole or main job.” Three findings in the same release matter to anyone planning to use contingent workers for frontline roles:

• “Workers ages 16 to 24 were four times more likely to have contingent jobs than workers age 25 and older.”
• “Part-time workers were three times more likely to have contingent jobs than were full-time workers (9.7 percent versus 3.2 percent).”
• “44.8 percent of contingent workers would have preferred a permanent job as their sole or main job, while 40.8 percent preferred their contingent employment arrangement.”

That last figure is the recruiting opportunity. A large share of the people in temporary jobs say they would rather have a permanent one, which is exactly what a direct-hire ad offers them. Independent contractors are different: the BLS found they “overwhelmingly preferred their work arrangement (80.3 percent).”

Contingent workforce management: the two legal risks

Misclassification: the independent contractor rules in 2026

Calling someone a contractor does not make them one. Under the Fair Labor Standards Act the question is economic reality, and the Department of Labor’s approach has changed twice in two years:

• 2024 rule. DOL published a final rule on 10 January 2024 (89 FR 1638), effective 11 March 2024, setting out a multi-factor analysis at 29 CFR part 795.
• May 2025 enforcement change. On 1 May 2025 the Wage and Hour Division directed investigators “not to apply the 2024 rule’s analysis in current enforcement matters,” relying instead on “longstanding principles outlined in Fact Sheet #13 and further informed by the reinstated Opinion Letter FLSA2019-6.”
• February 2026 proposal. On 27 February 2026 DOL proposed (91 FR 9932) to rescind the 2024 analysis and replace it with the one in its January 2021 rule, with modifications, and to apply it to the FMLA as well. The comment period closed 28 April 2026. As of 28 September 2026 we found no final rule in the Federal Register.

The 2021-style analysis DOL has proposed centers on two core factors: “the nature and degree of the worker’s control over the work” and the worker’s opportunity for profit or loss. Tax classification is a separate test. The IRS looks at three groups of evidence: behavioral control (“Does the company control or have the right to control what the worker does and how the worker does his or her job?”), financial control, and the type of relationship. A business unsure of a worker’s status can ask the IRS on Form SS-8, though the IRS says “it may take at least six months to receive a determination.” State tests can be stricter than either.

Co-employment: you share responsibility for agency workers

Using an agency moves payroll off your books, not all of your obligations. OSHA is explicit: “The staffing agency and the staffing agency’s client (the host employer) are joint employers of temporary workers and, therefore, both are responsible for providing and maintaining a safe work environment for those workers,” and “Host employers must treat temporary workers like any other workers in terms of training and safety and health protections.”

The EEOC’s guidance on contingent workers reaches the same place for discrimination: staffing firm workers “typically qualify as ‘employees’ of the staffing firm, the client to whom they are assigned, or both,” and the client “must treat the staffing firm worker assigned to it in a non-discriminatory manner.” Wage-and-hour joint employment is unsettled at the federal level: DOL proposed a new joint employer rule on 23 April 2026 (91 FR 21878), noting it has provided no regulatory guidance on the question since 2021. Put the allocation of these duties in the staffing contract.

What contingent workers cost vs direct hire

The agency premium is the number that decides most frontline staffing budgets. Our staffing agency markup page compiles the published ranges; the key figures, as reported there from staffing firms and industry sources:

In dollars, using the worked example from that page: a warehouse associate at $18.00 an hour on a 45% markup bills at $26.10, a premium of $8.10 every hour, or $16,848 a year per full-time worker on top of $37,440 in wages. The markup is not all margin. It carries the agency’s payroll taxes, workers’ compensation, recruiting and no-show replacement, which is why it is worth paying for a genuine two-week spike and a poor deal for a “temporary” worker still on the floor a year later. For the business model behind it, see how staffing agencies make money; for sector detail, warehouse staffing agency cost.

If the goal is to shed employer-of-record administration rather than to find people, an agency is not the only option; compare PEO cost and employer of record cost.

When direct hiring through social ads beats an agency fill

Across the 891 Boostpoint-managed Meta campaigns in our 2026 Social Job Advertising Benchmark, the median campaign cost $13.88 per applicant and the volume-weighted average was $8.02. Warehouse and production campaigns had a median of $9.83, middle half $3.15–$18.72; caregiver and home care campaigns $3.76. Those are applicants, not hires, so your own applicants-per-hire ratio does the rest of the math. For scale, the markup page notes that a single $10,000 placement fee funds roughly 1,247 applicants at the $8.02 average.

Direct hire tends to win when:

• You refill the same role every month. Recurring demand is an annuity for an agency and a pipeline you could own.
• The temps never leave. Every month past the real need turns the markup into a standing surcharge.
• Your team already screens and interviews. Then you are paying agency rates for sourcing alone.
• The people you want say they want permanent work. The BLS preference figures above suggest many temps do.

Keep agencies for what they are good at: coverage this week, seasonal peaks (see peak season staffing), and trial periods you genuinely need, priced with a conversion schedule you have read. The decision tree is on staffing agency vs in-house recruiting, and the conversion mechanics on temp-to-hire. When you do convert contingent workers to employees, your employee handbook and onboarding become theirs for the first time; treat day one as a new start.

Frequently asked questions

Sources: U.S. Bureau of Labor Statistics, Contingent and Alternative Employment Arrangements, July 2023 (news release and technical note, 8 November 2024); U.S. Department of Labor, Wage and Hour Division, independent contractor rulemaking pages and news release of 1 May 2025; Federal Register 89 FR 1638 (10 January 2024), 91 FR 9932 (27 February 2026) and 91 FR 21878 (23 April 2026); IRS, Independent contractor (self-employed) or employee?; OSHA, Protecting Temporary Workers; EEOC Notice 915.002 (3 December 1997). Agency pricing ranges are third-party figures compiled on Boostpoint’s staffing agency markup page. Boostpoint 2026 Social Job Advertising Benchmark: 891 campaigns, 1,334 campaign-months; cost per applicant is not cost per hire. General information, not legal or tax advice. Read at source 28 September 2026.