Hidden risks are abundant in the contingent workforce, ranging from rogue spending to inefficiencies in operational processes, worker misclassification, and a lack of visibility and control over staffing agencies. To truly benefit your business, we have compiled a quick list of four tips to help you mitigate these risks and enhance the profitability of your organization.
With the overall appeal of hiring contingent workers focused around cost reduction and improved workforce quality, letting hidden risks run freely through your contingent workforce can completely negate those benefits.
Here is a quick list of four tips that will help you mitigate those hidden risks and improve the profitability of your organization.
A quick recap: What are the hidden risks of a contingent workforce?
The first step to strategizing a successful contingent workforce management program is to identify the areas of risk for your business. Here are the top ways in which organizations lose money due to poor contingent workforce processes:
- The misclassification of non-employee workers.
- No visibility or control over their contingent workforce program.
- No standardization of vendor rates across your company’s hiring managers.
- Fragmented staffing agency processes across your business, often a result of using a manual spreadsheet to manage your vendors and contingent workers.
- The inability to track staffing agency performance.
- Hidden costs and rogue spend that goes undetected and staffing agency processes.
How to mitigate the risks associated with a contingent workforce
To help your business mitigate these risks and optimize your contingent workforce for best results, we’ve listed four areas of contingent workforce management that your organization needs to focus on.
1 - Centralize the management of your contingent workforce: Many organizations (especially those with smaller contingent workforce budgets) are still using manual spreadsheets to manage their contingent workforce. Multiple spreadsheets end up getting saved across your business by different hiring managers, data gets stored on emails instead and your business is left with no visibility and control over its contingent workforce. Instead, it’s absolutely crucial you centralize the management of your contingent workforce in one location.
2 - Automate your processes: When you manage your contingent workforce processes using manual, time-consuming methods you leave room for human error and data miscalculations. You can resolve these issues by automating processes such as sourcing, onboarding, time entry and approval, analyzing vendor performance, and payments for accurate insights into your contingent workforce program.
3 - Consolidate vendors in one location: A contingent workforce program involves a number of staffing agencies, and leaves your company with thousands of data points. To use this data strategically and analyze your staffing vendors, it’s crucial that you consolidate all staffing agency data into one centralized location. This will ensure all hiring managers are following standardized rates/agreements and that your business has complete visibility into all staffing agency spend.
4 - Properly document your contingent workforce data: Incorrectly identifying the relationship between your organization and nontraditional workers can lead to worker misclassification and hefty penalties. That’s why it's important that you properly document all of the information around your contingent workers, ensuring they can’t be classified as full-time employees. Not only does this mitigate the risks associated with misclassification, but proper documentation also improves your visibility into your contingent workforce program.
How a vendor management system will help
A VMS is a software platform that allows your organization to facilitate all of the processes involved in managing your contingent workforce program, including managing your staffing agencies and your non-employee workers.
A vendor management system will centralize, automate and consolidate your entire contingent workforce process into one easy-to-use solution. That means you’ll be able to manage your staffing agency relationships, analyze vendor performance, pay contingent workers and much more all from one seamless platform.
The result? You'll gain complete visibility and control over your contingent workforce, saving your business money and ensuring that you are able to make better strategic vendor partnerships that improve your workforce quality.
Interested in learning more about the benefits of a Vendor Management System?
Whether you are looking for a new VMS Solution, or just getting started, we are here to help. With years of experience in the staffing and procurement industries, our team of experts look forward to answering any questions that you may have. See how easy Conexis is to use by taking a quick 2 minute Self-Guided Tour. Contact Us for a Free No-Obligation Consultation to discuss your workforce challenges (and get immediate actionable insights) or Book a Personal Demo Today!
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