There has been a significant increase in contingent workforce over the past years and even more so in the last year due to the Covid-19 outbreak and the instability it created in the world.
We are increasingly seeing the new generation of employees pushing for more flexibility in their work life and to be able to run their own business at the same time as being employed. A 2017 study has found that 75% of workers from the younger generations plan to start their own business.
What does this mean for businesses? It means they will need to adapt to new ways of working, be more flexible and accept that contingent workforce is playing a significantly increasing role in their business.
Because the instability created over the last year many companies have had to lay off people. Most recently, since the economy started to open up again, companies have been faced with a significant lack of talent. To quickly overcome this issue many businesses have decided to hire a more contingent workforce.
Despite being ‘forced’ (we use the word force very lightly) into hiring contingent workforce, there are significant benefits for this way of working for both employers and employees. For the sake of this article, we are going to refer to the employer.
The benefits of hiring contingent workforce
- Flexibility – Since we have previously referred to economic instability, we are going to expand a bit on this. Hiring contingent workforce allows you to adjust to periods of increasing or decreasing demand, allowing you to hire more people when needed and adjust your workforce during quieter periods, especially in the current economic landscape. Hiring contingent workforce allows companies to respond faster to changing market demands.
- Access to industry experts – every sector has it’s ‘industry celebrities’, those people that you would like to bring onto your projects but who wouldn’t necessarily want to be become a full-time employee in your company. These types of industry experts can also bring fresh new perspectives into your company and even benefit your full-time employees.
- Fewer training needs – contingent workers are usually highly specialized in their field, making it easier for you to bring them on your projects. Often companies need certain skills on an ad-hoc basis – rather than spending time and money to train full-time employees, companies can choose to hire contingent workers to help out when needed.
- Fewer costs – usually companies pay fewer taxes for their contingent workforce and no employee benefits. Moreover, the costs associated to onboarding and training are far lower.
Why manage your contingent workforce?
Effective management allows your company to achieve the full benefits of hiring contingent workforce. Without proper management companies might be missing out on finding resources that are already utilised in one part of the business, resulting in the company spending time and money on finding new contingent talent, even though it already has access to it.
Proper management ensures that your contingent workforce will not become disengaged with your company and will help them maintain a positive attitude towards your organisation. One important point to remember is that it is much easier for contingent workers to seek job opportunities somewhere else.
Best practice for contingent workforce management
- Performance management – Many organisations don’t measure the performance data of their contingent workers or they do so outside of their HR systems. This can mean losing out on having valuable data available or easily available for a significant part of your workforce.
Performance management for your contingent workforce allows you to assign the right skills to the right projects and identify the people with those skills much faster. It also allows you to maintain a quality pool of contingent workers.
- Follow the same processes across the organization – although it requires some effort, creating a detailed plan that brings together all the departments from your organisation into following the same processes will greatly benefit the way you are managing your contingent workforce.
The main issue you should avoid is allowing each department to create its own management processes. This creates a fragmented approach and increases administrative tasks related to your contingent workforce.
- Make use of technology – we cannot stress enough how many challenges related to contingent workforce management could be solved by using the right technology solutions. Processes play a huge part as well, but after deciding on the processes, you need to have the right infrastructure to ensure those processes will be followed by the entire organisation in a way that is not time consuming.
Very similar to the way you manage your procurement operations through a P2P platform, many software vendors offer innovative technology solutions to help you manage your contingent workforce. These types of solutions allow you to have clear visibility over your entire contingent workforce, from contracts, expenses, time logs, performance reviews, payments, compliance, onboarding and more.
Coupa for example, an industry leader in Procure to Pay software solutions, provides an extensive functionality of their platform for sourcing, procuring, onboarding, and managing contingent workforce and resources including staff augmentation, SOW agreements, and MSP (Managed Services Provider) relationships. Find out more about Coupa Contingent Workforce here.
Due to the increasing preference for this type of employment, both from the employees and the businesses, it is important to have a clear plan in place, the right information and the appropriate technical solution to properly manage your contingent workforce.
Want to learn more about setting up an effective contingent workforce management programme? Reach out to our consultants at [email protected].