23 May 2022

How To Avoid Common Contingent Workforce Management Mistakes

3 min read

When managing a contingent workforce, your business is constantly looking for new efficiencies, ways to cut costs so you can increase your bottom line and ways to improve the quality of contingent talent

To do this, you should be aware of some common contingent workforce management mistakes and how to address them. That’s why, in this blog, we list five contingent workforce challenges and what to do about them.

1 - Not centralizing your processes

Many organizations let each department manage their own contingent workforce needs. This not only reduces efficiency, but there's also a good chance that workers across the organization are being engaged, managed and paid inconsistently.

This can result in higher costs, poor visibility and even regulatory issues.

By creating a contingent workforce management strategy that centralizes your processes, you can help solve this problem. If you need assistance centralizing your management processes, you should consider working with a managed services provider (MSP).

That leads us to the next management mistake you need to be aware of.

2 - Not getting help

Managing a contingent workforce is not just a lot of work, but it’s incredibly time-consuming and requires category expertise. If your business doesn’t have a contingent expert, that’s OK. Not many businesses do, and nobody is required to be an expert in everything. That’s why companies hire bookkeepers, human resource reps, project managers, as well as partner with a variety of third-party providers.

The thing is, managing a contingent workforce doesn’t have to be difficult. With the right resources and expertise, you can easily streamline your management of temporary workers.

An MSP can provide those resources and the expertise you need. They will help centralize your management strategy, reduce costs, streamline processes, and increase the visibility you have into your program. This will ensure that you’re using the right techniques to hire the strongest candidates, at the best price. 

Optimize the Quality & Speed of Your Contingent Program - Free Assessment

3 - Using the wrong tools

Contingent workforce management technology has come a long way. The problem is, most businesses are using old outdated systems, the wrong software or, in some cases, nothing but a spreadsheet.

While it can be hard to move away from systems you're familiar with, it can actually save you a lot of time and money in the long run.

One of the most important technologies you should consider is a vendor management system (VMS). These systems are key to ensuring your contingent workforce strategy is consistent across the organization and will:

  • Give you clear visibility into your program
  • Improve productivity
  • Keep all pertinent information in one place
  • Increase compliance
  • Improve the quality of your talent pool
  • Save wasted administrative efforts
  • Clean up your hiring process
  • Reduce errors
4 - Hiring the wrong candidates

The success of your contingent workforce is highly dependent on the candidates and hires you have access to. But when you have a fragmented and disorganized management process, it can affect the number of vendors you have and your relationships with them. This can lead to smaller pools of talent to select from, lower quality candidates and rushed hires.

To help ensure you’re getting the best of the best, you need to improve your management processes. You also want to consider your vendor policies. That’s because a lot of companies depend on a small number of suppliers (in some cases only one) to source workers. This means that you are missing out on talent that works with other vendors and it could leave you in a pinch if your vendor(s) can no longer meet demand.

Making sure you stay on top of your management processes and having multiple vendors can help ensure you have the best quality candidates possible.

5 - Worker misclassification

This is a big one. So much so, you’ve probably heard it from many different sources. You may have even found your business subject to fines, penalties and lawsuits for failing to classify employees and contractors correctly.

The most common mistake that companies make, regarding classification, is expecting their hiring managers to be responsible for contingent workforce management. While hiring managers have a great deal of knowledge and expertise, not all of them are well versed in the difference between employees and contingent workers.

Not only this, but sometimes policies regarding hours and other expectations can muddy the water when writing contracts for the contingent workforce. Without having someone who is well trained in worker classification on hand, you could run into some serious regulatory problems.

Need assistance? Get in touch with Contrax VMS today. We have a range of contingent workforce management programs and advisory services to help you implement more effective and profitable programs. 

2022 Contingent Workforce Trends



Subscribe to the Contrax Blog