Contingent Workforce Management: Everything You Need to Know
by YOSS Community Writer, on October 8, 2019 at 3:00 PM
Contingent workers are contractors, consultants, freelancers, and other people who work for a company on a temporary basis. Generally, they are brought in to work on a particular project and when it’s done, they move on.
Contingent workers are already a large part of the modern workforce, and it isn’t a trend that you can expect to slow down. According to the Intuit 2020 Report (PDF), between 25 and 30 percent of the workforce is contingent. Plus, more than 80 percent of major corporations plan to dramatically increase their use of contingent workers in the future.
Why Do Businesses Use Contingent Workers?
There are many reasons why the business community is turning to contingent workers:
- Flexibility: these workers can be scaled up and down quickly to meet changing needs.
- Cost: there is less downtime with contingent workers who are usually experts in what they are hired for and thus able to be productive immediately.
- Talent: you can have access to a wide range of specialists who would be too expensive to employ full-time.
- Administration: contingent workers are normally self-employed or employed through an agency, thus making administration easier and more affordable.
- Efficiency: you can use their talents at particular times, like during seasonal work spikes.
There are some downsides when using contingent workers and they include the following:
- Control: the independence of contingent workers can mean that you don't have as much control over work processes.
- Legal: there can be insurance issues with these workers, who probably are not covered under workers' compensation insurance. Also, you must make sure that they meet the legal requirements for your independent relationship.
- Morale: in addition to managing the morale of your contingent workforce, you need to see that they don't affect the morale of your permanent workforce that may see them as threatening.
Contingent Workforce Management
There are 5 aspects of good contingent workforce management.
Hiring is a critical aspect of contingent workforce management. Much of the power of using this type of workforce is the ability to staff a new project quickly. If your primary need is for low-level workers (e.g., data entry), you may be best off working with a staffing agency.
For high-level workers (e.g., data scientists), you will mostly be working with freelancers. There are various ways to find good freelancers, ranging from word-of-mouth to working with firms like YOSS. To systematize this, you should set up a talent pool.
A big part of contingent workforce management is knowing when and where to use it. The only way you can determine that is by seeing what does and does not work. Analytics can help you do this. An analytics program will also allow you to determine the ROI of different efforts, what kinds of workers and worker supply chains are best, and more.
If your company uses business intelligence, your contingent workforce should be a part of it. This way, the data you collect can provide insights not only into your contingent workforce management but your company as a whole.
Most companies allow each department to manage their own contingent workers. However, in order to best utilize the resources applied to your contingent workforce, you must be able to see it as a single system.
This is an area where vendor management software (VMS) like Tradeshift can be helpful in managing these workers both on the departmental and institutional level.
4. Risk Management
Just as with regular employees, there are risks associated with contingent workers. These range from regulatory compliance (e.g., worker classification) to contract management to liability and insurance.
Your HR department should be able to help you with risk management. There are also contingent workers who specialize in setting up risk management systems for contingent workforce management efforts.
5. Worker Management
Contingent workers need to be managed differently than regular full-time workers. Much of what we previously discussed about remote workers is true of contingent workers:
- Set expectations: even more than permanent employees, contingent workers need to know what is expected of them. There isn't time for socialization and slow onboarding. Make sure they’re able to do the work they were hired for.
- Supervise, Engage, Trust: although contingent workers tend to be more independent, they still need to be supervised. In addition to providing guidance, this will increase morale because they feel like they’re part of the team. At the same time, trust your contingent workers and remember that they are professionals.
- Provide Resources: don't allow your contingent workforce to languish because they don't have access to the resources they need to do their jobs. Address whatever security concerns there may be, and then provide the necessary resources.
The business world is turning more and more to contingent workers, but contingent workforce management is about more than worker management. As discussed above, you will need a system in place to do it well.
If you need a source for great contingent workers to fill your talent pool, YOSS offers great resources for contracting with the very best tech talent.
YOSS can help build your talent pool, allowing your company to stay connected with existing and new talent. Our mission is to make agile staffing easy for companies like yours so see how YOSS can help you manage your workforce below with YOSS Talent Pools.