OK…so what does that mean in today’s employment environment? Basically, it is anyone performing a service or task for you or on your behalf who is not your employee. These workers generally fall into the following categories (Note: these are not “official” categories as defined by the Bureau of Labor Statistics (BLS), but are used for general discussion):

Category	Definition
Outsourced Contractor (does not support revenue production)	This worker is supplied through a third party service provider which provides products and/or services directly, such as cafeteria, janitorial, security, or landscaping services. The contract is with the provider not the worker. The work is usually non- professional / non-technical in nature, but may include some technical outsourced services such as internal IT help desk. The service provider controls the method and manner in which the product or service is delivered, under a Service Level Agreement with a defined Scope of Work.
Outsourced Contractor (supports revenue production)	This worker is supplied through third party service providers which provide products and/or services to or for customers, for example, call centers. The contract is with the provider company not the worker. The work tends to be more professional or technical type work, such as call center or technical support for a customer site, channel partners. The service provider controls the method and manner in which the product or service is delivered, under a Service Level Agreement with a defined Scope of Work.
Agency Contractor	This worker is sourced through a typical temporary staffing agency providing labor for a temporary need or staff augmentation. The worker is paid wages on an hourly basis by their providing supplier and temporarily supplements to the workforce or replaces headcount until a position can be filled. The work can be task oriented (such as light industrial or clerical) or more knowledge based or highly skilled (such as Information Technology. Their work is directed daily by a manager.
Consultant	This person provides intellectual and/or professional services that are advisory in nature (i.e. consulting services) or one time deliverable based services (i.e. training, market program design, IT system development, etc.). Advisory recommendations and services rendered are for the enhancement of the business operations. Worker could be supplied through a small (1 - 3 person) or large third party consulting firm that is contracted under a Master Service Agreement, Consulting Agreement or Professional Services Agreement. The managed service consulting firm controls the method and manner in which the service is delivered within a defined Scope of Work.
Independent Contractor	The IC is self-employed and works for a defined (short-term) period or on a defined project. The IC may be a consultant or ‘freelancer’ doing work similar to that performed by agency contractors (above). The contract is with the individual and is typically paid via the 1099 process.

The workers supplied in the "outsourced" categories are not generally the primary focus of Contingent Workforce Management because they are really employees of the service company which has you as a customerit is more "contract management" rather than "workforce management". They are also not included in most BLS data representing the contingent worker or "alternative employment arrangement" group. The other three groups are those most commonly referred to when discussing temporary labor.

That said, however, it is important to note that there is an increasing trend to apply CWM practices and tools to "project work" (Statement of work or SOW) which is milestone or deliverable based rather than time/expense based. The value of managing the spend categories that are considered "services" rather than "goods" is likewise becoming more evident. This would include services such as printing, legal, HR, etc.

© 2010 by Brian Korsmeier - You are free to print or distribute this material as long as you include this copyright statement or attribute the contents to the author. Please let me know if you include any of these statements in any of your documents.