Every company has two workforces. One is on the payroll. The other, the external workforce, does real work without being permanent staff, and it usually lacks a system of its own.
Key facts
- The external workforce is everyone who works for a company without being one of its permanent employees.
- It includes independent contractors, freelancers, agency workers, consultants, and workers employed through a third party.
- The term maps to how buyers describe their roles more than to a single search category.
Contents
- What is the external workforce?
- Who is in the external workforce
- External workforce vs contingent workforce
- Why the external workforce needs its own system
- Frequently asked questions
- Running your external workforce
What is the external workforce?
The external workforce is everyone who does work for a company without being one of its permanent employees: independent contractors, freelancers, agency workers, consultants, and workers employed through a third party. It sits opposite the internal, permanent workforce.
Who is in the external workforce
- Independent contractors and freelancers.
- Agency workers, sourced through staffing agencies.
- Consultants and SOW workers.
- Employees hired through an employer of record in markets where the company has no entity.
External workforce vs contingent workforce
The two overlap heavily. Contingent workforce is the procurement-facing term, focused on non-permanent workers and spend. External workforce is the broader umbrella that also covers workers employed through a third party, and it maps to how modern buyers title their own roles.
Why the external workforce needs its own system
Most companies manage permanent staff in an HR system and leave the external workforce scattered across tools, teams, and spreadsheets.
Key takeaway: You run two workforces. Only one usually has a system. The external workforce is the one that does not.
Best practice: Manage the external workforce in one platform that can source, classify, contract, pay, and employ across worker types and countries. That is what an external workforce platform does.
Frequently asked questions about the external workforce
What is the difference between internal and external workforce? The internal workforce is permanent employees on payroll. The external workforce is everyone else who does work for the company.
Is the external workforce the same as contingent workforce? They overlap. External workforce is the broader term and includes workers employed through a third party, such as via an EOR.
Who manages the external workforce? It spans procurement, talent, finance, and operations, which is why a shared system matters.
Running your external workforce
The external workforce is too large and too exposed to run on spreadsheets. Worksome is the platform that gives it a single system, from sourcing to pay.
Related: External workforce platform, Contingent workforce, Independent contractor (IC), Total talent management.