The contingent workforce is growing rapidly, yet many organizations are still failing to effectively and strategically manage their contingent workforce programs. In fact, most businesses don’t have an “official program”.
Instead, the contingent workforce is typically associated with “non-core” business functions that leave organizations with no company-wide processes in place. There are no standardized processes, and hiring managers engage staffing agencies on their own terms and at their own price.
This leaves companies with a complete lack of control over where money is being spent, and no visibility into how many externally-sourced workers are being hired. The end result is rogue spend that’s running rampant throughout the organization.
That’s why contingent workforce management is an absolute top business priority for any organization with an externally-sourced workforce. We’ve listed four of the top reasons why:
#1 - Access top talent, faster
Company’s today need to be more agile and flexible than ever before. Not only do they need to adapt quickly to ever-changing market conditions, it’s also becoming increasingly more competitive to acquire top talent - especially right now with the ‘Great Resignation’ making it so difficult to fill open positions.
Externally-sourced workers can be leveraged to address these changes, but it will only work when organizations have visibility into the performance of the staffing agencies they use. A strategic contingent workforce program gives businesses the ability to monitor and track vendor performance with visibility into important metrics such as time-to-fill, time-to-submit and workforce turnover.
#2 - Improving your bottom line
Ineffective contingent workforce management programs lead to rogue spend that runs through your organization and significantly impacts your bottom line. Worst of all, you probably don’t even have the visibility to see that this is happening.
Contingent workforce management solutions change that. In fact, Staffing Industry Analysts’ “Workforce Solutions Buyer Survey: 2020 Americas Results” found that 84 percent of companies have experienced cost savings with Managed Services Providers (MSPs) and 76 percent have seen savings with a Vendor Management System (VMS).
#3 - Mitigate the risk of misclassification
The contingent workforce comes with a range of compliance risks that could lead to unforgiving fines, penalties, and damages for an employer. Contingent workers represent a complex workforce management set up, and risk can arise when this management isn’t done correctly.
An effective contingent workforce management program, whether done internally or outsourced to an MSP, will properly document all externally-sourced workers to ensure the business complies with local and national employment regulations.
#4 - Build standardized processes and rates
Without a contingent workforce management program in place, it’s all too easy for hiring managers to hire externally-sourced workers through their own means. This means using their own fragmented processes to hire contingent workers from unauthorized staffing agencies outside of standardized rates. The result is high spend and no visibility into program cost or performance.
The creation of a strategic program will lead to vendor and process control, ensuring that all hiring managers across your company follow the same processes, pay the approved rates and document all actions appropriately.
Struggling to get your contingent workforce management program under control?
The contingent workforce comes with a range of business and compliance risk that makes an effective and strategic contingent workforce program a priority for any business, but setting a program up can be complex for an organization that doesn’t have the time, resources and contingent workforce category expertise.
Contrax can help alleviate that burden. We have a range of contingent workforce management, staffing agency management and talent acquisition solutions to help your organization better manage its externally-sourced workforce.
Book a meeting with our team today to learn more.
