External workforce

The external workforce commonly refers to people engaged outside conventional direct employment: contractors, freelancers, agency workers, and workers employed through a third party.

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. This is a business term, not a legal classification. Depending on the engagement and applicable law, a person described as a freelancer, contingent worker or member of the external workforce may be an independent contractor, employee, agency worker or worker engaged through a third party.

Key facts

The term commonly refers to people engaged outside an organisation's conventional direct-employment model.
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 term commonly refers to people engaged outside an organisation's conventional direct-employment model, including independent contractors, consultants, agency workers and workers employed through third parties. 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 commonly refers to people engaged outside that conventional direct-employment model.

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.