In rapidly changing industries and marketplaces, managing talent flexibly keeps companies lean and competitive. For many organisations, this means that a robust contingent strategy is key to agility.
The term contingent workforce is used to describe a group of workers who are engaged by organisations on a non-permanent basis. This can include freelancers, independent professionals, temporary contract workers or consultants. Organisations can manage their own contingent workforce or outsource to a managed service provider (MSP).
Prior to Covid-19, the market for temporary and contractor employees was growing faster than that of permanent staff. In fact, temporary and contractor employees made up to 41.5% of the workforce for the average enterprise (Ardent Partners). Post Covid-19 the contingent workforce is expected to continue to increase as it offers organisations increased flexibility and cost benefits. Given future uncertainty, flexibility and managing costs will be key as organisations look to position themselves for opportunities on the other side. This means that effectively managing and growing your contingent workforce should be a top priority.
As an ever-evolving portion of the workforce, there is still no single source of truth that defines how organisations can manage their contingent workforce in a strategic, unified, consistent or cost-effective manner. This means that companies often fall into the trap of paying too much, taking unnecessary risks, operating sub-optimally and ultimately failing to leverage great talent across their business.
In our experience, the most successful contingent workforce programs are led by procurement teams, in conjunction with strongly aligned partners from both HR and the business. In addition, we’ve seen that effective and efficient programs are underpinned by robust processes and complementary technology.
So how do you know if you need help with your contingent workforce program? Here are the top 10 critical questions you should be able to answer if your program is operating efficiently:
- How many contingent workers are you paying across your organisation today and what is the cost?
- What is their location, role, reporting line, start and end dates?
- Do you have robust processes for hiring, on-boarding, managing and off-boarding contingent workers?
- Do you have the right technology in place to streamline the end to end management of this workforce?
- What is the total cost of each worker, including what they are earning versus the other costs you are being charged, such as supplier mark ups and statutory on-costs?
- How do their salaries compare to employees in equivalent permanent roles and/or the external market?
- How are your contingent workers performing for your business? Are you ensuring low performers are exited quickly? Are high performers given opportunities to apply for your permanent roles?
- Do you know how often contingent workers run over their contract period, or your reutilisation rate?
- Does your business classify contractors correctly as PAYG, Independent Contractors and SOW?
- Do you have the right checks in place to ensure you are compliant with all legislative requirements?
Did you answer all these questions with ease? If not, now is the time to revisit your contingent workforce program strategy by getting in touch with an expert. Hudson RPO‘s Managed Service Provider (MSP) Solution helps companies make the smartest, most effective use of their contingent workforce spend. If you would like to have a confidential discussion with an experienced Consultant, please feel free to leave your details and we’ll be in touch.