4 March 2021

Contingent Workforce Management Terms: Your Complete Glossary

John Clark
John Clark

For organizations with smaller contingent workforce budgets, it can be easy to fall into the trap of hiring contingent workers to fulfill staffing requirements without any real management program put into place. 

In fact, most of these businesses are still using manual spreadsheets, in-house databases or Sharepoint-type websites to manage their non-employee workers. 

The truth is, no matter how small or large your company’s contingent workforce is, creating a program that combines both contingent workforce knowledge and vendor management software (such as a vendor management system) will lead to cost savings, better workforce decisions, process efficiencies and vendor consolidation.

To truly understand your organization’s contingent workforce and to redefine how you manage your contingent workforce program, Conexis VMS has created a glossary of the most important terms you’ll come across when building your strategy.

Key contingent workforce management terms you need to know

Alternative staffing 

Alternative staffing is a generic term that refers to the hiring of individuals on a part-time or as-needed basis. The term pretty much refers to any worker that doesn’t fall under the regular, direct and full-time employment. Alternative staffing arrangements typically refer to those working under short-term contracts.

Assignment

Assignment refers to either the period of time a contingent worker is working with a business, or the task or duty that is being performed. Once the assignment is finished, their contract with an organization is up. 

Bill rate

The bill rate is the amount that a company will pay to a staffing agency, per hour, for both the services of the agency as well as the services of a temp worker. Bill rate is a combination of both the pay rate, any applicable statutory costs and the supplier markup. 

Contingent worker

Contingent workers are a category of workers who are not considered employees of a company. They could be defined as freelancers, independent contractors, temporary workers or independent consultants.

Want to learn more about the different types of contingent workers? Check out our blog ‘Your Guide to Understanding the Different Types of Contingent Workers’.

Conexis VMS 2021 Trends eBook

Contingent workforce management

Contingent workforce management is a strategic approach to managing non-employee workers, and the vendors used to source them, in a way that reduces costs, improves compliance, and ensures organizations meet their staffing requirements.

Contingent workforce program

A contingent workforce program is a company’s entire strategic solution to manage and organize their contingent workforce needs. This program focuses on cost, quality of workers, program efficiencies and level of risk within the program, as well as vendor management and evaluation. 

Compliance

Contingent workers must be classified correctly, meaning compliance is a crucial aspect of any contingent workforce program. Failing to comply with local compliance regulations could result in hefty fines for a business.

Direct sourcing

Direct sourcing is the process in which a company leverages its own internal talent pool to hire contingent workers, as opposed to working with a staffing agency to fulfill their staffing requirements.

Freelancer

A freelancer, or freelance worker, is a term commonly used for a person who is self-employed and not necessarily committed to a particular employer long term. They typically work on short-term projects with defined deliverables, and have less mainstream hot skills such as graphic designers or content writers. Freelancers fall under the independent contractor category. 

Gig economy

The gig economy is a term used to define a workforce that is characterized by shorter-term contracts and freelance work, as opposed to permanent jobs. The gig economy is also known as the on-demand economy. 

Independent contractor (IC)

Independent contractors are self-employed and are not represented by a staffing agency. It’s an umbrella term of workers - such as freelancers, consultants and gig workers - who are able to work from where they want and whatever time they want. They are typically paid by the hour on a time and materials basis.

Markup 

This is a percentage added on top of a temporary worker’s hourly pay rate, that is paid for the staffing agency’s services. 

Margin 

While markup is the extra percentage that a staffing agency charges it customers for its services, margin refers to the profit that the staffing agency earns as a percentage of the selling price. 

Master vendor

A master vendor is where a single staffing agency assumes full responsibility for all of a company’s staffing needs. They will fill the roles themselves, or if they cannot fulfill the roles they will outsource them to other staffing agencies.

Non-employee

A non-employee is any worker who is not an employee of any organization. This could be anyone in the contingent workforce, such as a freelancer, consultant, independent contractor or temp.

Pay rate

Pay rate is the direct compensation that a company pays to a staffing agency to cover a temp workers' hourly, daily, weekly or monthly earnings.

Rogue spend

Rogue spend is spending that occurs on sourcing, engaging and hiring contingent workers in scenarios that are not accounted for, not approved, and have not followed a strategic approach. This typically occurs when spreadsheets are used over vendor management software. 

You can learn more about rogue spend and how to prevent it in our blog ‘What is Rogue Spend in Non-employee Workforce Management?

Service level agreement (SLA)

A SLA is a document that describes the minimum levels of service quality a supplier should comply with. This typically involves key performance indicators such as time-to-submit and time-to-fill. 

Staffing agency

A staffing agency is an organization that matches companies and job candidates. A staffing agency places temporary workers into organizations by matching their staffing requirements and price points.

Need help choosing the right staffing agency? Read our blog ‘How to Choose a Staffing Agency for Your Company’s Unique Requirements’. 

Talent pool

A talent pool is an internal pool of potential temporary workers, such as former employees, retirees or previous applicants. 

Temporary worker

A temporary worker, also known as a temp, is a worker who is employed by a staffing agency that sends them to work for a different company for short periods of time. They are usually used by companies to meet seasonal demand, fill temporary positions or to scale up rapidly. 

Time-to-fill

Time-to-fill is the number of calendar days between the time a business publizeses a role vacancy to the moment that position is filled. 

Time-to-hire

Time-to-hire is the time it takes to fill a position once a staffing agency has made contact with a potential candidate, rather than from the time the position is opened up like time-to-fill. 

Time to Submit

The time it takes for a staffing agency to submit its first candidate against an open requirement. 

Turnover

Turnover is the number of contingent workers that prematurely quit their assignment, or perhaps never show up, before they have been completed.

Vendor

A vendor is a person or company offering a service or product for sale. In the contingent workforce, a vendor refers to a staffing agency who fills job requests.

Vendor management

Vendor management is the process of properly managing staffing agencies so that companies are able to monitor and track their performance. This ensures organizations are meeting their workforce targets and that you make better vendor decisions moving forward. 

Read more about how vendor management is beneficial at our blog ‘5 Benefits Your Business Will Realize From Improved Vendor Management’. 

Vendor management system (VMS)

A vendor management system (VMS) is a cloud or web-based platform that allows a company to manage their entire contingent workforce program in one centralized location. A VMS automates all processes involved in contingent workforce management and leads to significant cost savings, vendor consolidation, workforce visibility, process efficiencies, vendor performance tracking and many other benefits. 

 

Do you have any further questions about your contingent workforce management program and how a vendor management system can help your business optimize the program and realize true ROI? Contact Conexis VMS today. We have developed a VMS designed specifically for organizations with smaller contingent workforce program spend.

Conexis VMS 2021 Trends eBook

John Clark

John Clark

A Co-Founder of Conexis, and Staffing Industry Analysts’ (SIA) top 40 under 40 recipient, John has more than 15 years experience in the Contingent Workforce, Managed Service Provider and VMS technology space. John has designed, built and run dozens of client workforce programs across multiple industries, managing over $1bn in spend. John’s expertise sits in both program design and delivery as well as VMS technology implementation and management.

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