Please explain the challenges when determining compensation and benefits for flexible and/or contingent employees.

Expert Answers
pohnpei397 eNotes educator| Certified Educator

Flexible and contingent employees pose challenges to those who are trying to determine how to compensate them.  Flexible employees are those who work different numbers of hours at different times while contingent employees are essentially independent contractors who enter into contracts with firms to work for a certain amount of time.  Both of these types of workers present compensation problems.

Both of these kinds of employees contribute to the firm, but it is hard to determine exactly how much of a contribution they make.  For example, a contingent employee might work for a couple of months but then the work that they do might continue to make money for the company for a long time afterwards.  How, then, does one compensate such employees?  On the other hand, a contingent or flexible employee might not be as valuable to the firm as regular employees.  It might take them time to adjust to the company’s culture or they might not work well with the permanent employees.  This could make it necessary for the firm to determine just exactly how much less to pay those people.

Another consideration is the need to pay well enough to keep flexible and contingent employees interested in your firm.  These people can leave much more easily than regular employees so you need to be very careful to compensate them well enough if you want to retain them.

In today’s economy, firms are needing to hire more employees who are flexible or contingent.  Therefore, HR departments have to be able to determine how to properly compensate these people even though they are not working the regular hours like the other employees.