Businesses today have significantly increased their use of temporary workers to cut down on labour costs, access highly-skilled candidates during the worsening skills shortage and to improve their agility or ability to adapt to changing market conditions.
In fact, roughly 25-30 percent of the US workforce is now contingent, and more than 80 percent of large corporations plan to “substantially increase” their use of a flexible workforce in the coming years, according to a new report from Intuit.
The problem is, despite the benefits that come with a non-employee workforce, there are a number of challenges too.
With so many data points and non-employee workers and vendors to manage, manual spreadsheets, in-house databases and Sharepoint type sites simply aren't effective methods to get the job done. Yet the majority of small to medium-sized enterprises still use them.
In the first part of this two-part blog, we’re going to take a look at what exactly non-employees are, why they are important for the future of work and what management challenges they bring your organization without effective solutions in place.
What are non-employee workers?
A non-employee worker, or contingent worker, are temporary candidates who are full-time and permanent employees but provide services to an organization. These workers are typically defined as consultants, independent contractors, temps, advisers and freelancers.
Contingent workers are not considered employees of a company, as they sign a contract on a temporary basis. This means, unlike an employee, they do not receive a company salary or benefits (their compensation is typically based on an hourly rate), and they usually work from where they want (either in your workplace or remotely) and perhaps even when they want.
Why is the non-employee workforce the future of work?
The non-employee workforce has grown in recent years for a number of reasons, and is now considered by many research institutions to be the future of work.
In fact a new study from Ardent Partners, The State of Contingent Workforce Management 2020, found the top reason businesses use contingent labour is to access highly-specialized skills (68 percent). This was followed by overall workforce enhancement (62 percent), the faster speed of delivery of talented workers (51 percent) and the ability to diversify their workforce (47 percent).
Today’s non-employee workforce is a dynamic, flexible way for organizations to access highly-skilled workers, and create an agile workforce of qualified candidates that can boost innovation, productivity and the ability to rapidly change to market conditions.
What challenges does it bring?
Despite the benefits that a non-employee workforce brings your organization, it also comes with a number of challenges. That’s because the non-employee workforce is complex. It comes with thousands of data points, hundreds of temps and a wide range of vendors that must all be managed properly.
Yet many organizations are still using manual and time-consuming Excel spreadsheets, in-house databases or Sharepoint type sites to manage their contingent workforce. This results in time-consuming and inefficient processes that prevent true visibility into your non-employee workers and the vendors you use to source and engage them.
Unfortunately, failing to implement an approach to automate and centralize your non-employee workforce management will result in wasted money, fragmented internal process, reduced access to highly-skilled candidates and a complete lack of transparency into program spend and performance.
The key to visibility and transparency
The key to gaining visibility and transparency into your non-employee workforce, no matter the size (even if your spend is comparatively low compared to some enterprise organizations), is the use of a vendor management system (VMS).
Interested in learning how a VMS solution works and how it will significantly improve the way you manage your non-employee workforce?
Please contact the Conexis VMS team of experts today. We would love to answer any questions you may have.