The contingent workforce has been steadily gaining in popularity over the past decade. And no wonder! Non-permanent workers, contractors and freelancers offer a range of benefits for today’s organization, from increasing scalability to reducing labor costs.
But when managed incorrectly, a contingent workforce can have a negative effect on your business and can even reduce your bottom line.
If you aren’t getting the ROI on your contingent workforce that you should, or want to avoid problems and risk, consider these best practices:
- Ensure HR and procurement work together
Contingent workers aren’t employees, but they aren’t your typical ‘procurement category’ either. They are temporarily part of your workforce, that can be viewed as either a human resource or a ‘temporary service’. This leaves a lot of grey area when determining whether they should be managed under procurement or HR.
So who do you get to manage them? The answer is both. Procurement can use their expertise of managing costs, while HR can ensure contingent workers are providing quality work and help improve retention by engaging workers (within the constraints of the law, it’s important not to misclassify temp workers as employees).
Your organization should ensure that both HR and procurement teams work together. Otherwise, you risk wasting money and mismanaging your resources.
- Have business-wide procedures
It isn’t just disjointed HR and Procurement departments that can create problems. Another major issue businesses face with their contingent workforce management program is inconsistent procedures. This is usually because hiring of contingent workers is managed by individual hiring managers. This can lead to fragmented processes, higher spend, poor workforce visibility and compliance issues.
To help reduce all these risks, you should ensure there are clear procedures for managing contingent workers. This includes training the staff responsible for hiring and managing, as well as completing internal reviews to ensure procedures are being followed.
To help alleviate the burden of doing all of this, you should consider a vendor management system, which aggregates information and helps standardize processes.
- Take advantage of technology
Managing your contingent workforce involves a lot of information handling and repetitive tasks. Both can take attention away from your core business and increase the need for more resources.
The good news is contingent workforce technology has come a long way. One particularly beneficial technology is a vendor management system (VMS).
A VMS is a software platform that centralizes the management of your contingent workforce. It provides clear visibility over your workforce and helps manage every stage from sourcing and onboarding to payment. Best of all, it can help streamline and even automate processes so that your staff can spend less time managing workers and more time working with clients.
- Get outside support (if needed)
If your contingent workforce management program is out of control and you have limited resources to fix it, you’ll need external support. By working with a managed service provider (MSP), you gain access to experts who will evaluate your situation and streamline your contingent workforce processes. Expert advice will ensure you are meeting government regulations, obtaining the best talent, and receiving the best rates.
However, with the implementation of the right vendor management system, you can do all of this internally for a fraction of the cost - as long as you set up your contingent workforce prog
- Don’t treat your contingent workers like employees
It’s crucial that contingent workers are managed according to their status, as a non-employee worker and not in the same manner as traditional employees. Businesses that misclassify their workers are subject to hefty fines and lawsuits.
Typically, a worker is presumed to be an employee unless the employer can prove that:
- The worker is free from control and direction in the performance of services
- The worker is performing work outside the usual course of the business of the hiring company
- The worker is customarily engaged in an independently established trade, occupation or business.
If you’d like to learn how the Conexis VMS platform can help your business optimize its contingent workforce, book a free demo today.