Contingent Workforce Management: Shifting Strategies to Improve Visibility

One of the greatest challenges that companies face when managing their contingent labor is the lack of visibility into spend, headcount, and vendor management. This lack of visibility creates chaos and confusion for companies looking to make better decisions on both permanent and contingent talent strategies. Most companies second-guess their hiring and talent management decisions when they don’t have insights into how, when, and why they are using non-employees.

When it comes to contingent workforce management, companies are constantly asking, “ Are we doing this right?” This is often difficult to answer and nearly impossible to measure. According to Aptitude Research, cost control, visibility into use and spend, inefficiencies, and lack of ownership of technology were identified as the top challenges in contingent workforce management. 

Without insights into how to manage non-employee labor, companies can’t really  value the strategies or technology they have in place. They often view their approach to contingent labor as reactive rather than strategic and instead of looking ahead and planning for workforce needs, they tend to seek  contingent workers only when they have an immediate void to fill. Increased visibility can help turn contingent labor into a more strategic initiative. 

Headcount, however,  is not the only area where companies want more insights. We found that over 60% of companies lack strong visibility into spend, fee models, vendor performance, and worker engagement. 

Why Is Visibility a Challenge?

Companies that lack visibility into contingent labor may not have clearly established who owns this initiative, invested in the right partners, or clearly defined their performance metrics. Visibility is not just a challenge for employers. The BLS has difficulty reporting on contingent workers or tracking all categories of the extended workforce. Additionally, companies also lack insights around costs and rates. Some of the reasons that companies lack complete visibility into contingent workers include:

  • Lack of Planning: Companies often make last-minute decisions around non-employees based on project needs or demands during different times of the year. Staffing vendors will typically increase costs without providing any visibility or standardization.
  • Inconsistent Pay Rates: Companies may have inconsistent pay rates for the same level of resources within an organization, or vendors may change pricing without providing an explanation. As pay rates vary, companies do not always have a clear picture across their organization.
  • Inability To Forecast the Budget: Companies think about contingent needs in the short-term without looking at what they are currently spending, what they have left to spend, or preparing for future projects.

What Should Companies Consider?

With greater visibility into contingent workforce management, companies can better control costs, manage vendors, and empower workers with a better workplace experience, which in turn helps them attract and retain top talent. Companies should consider partners that offer complete visibility and can establish and report on clear metrics for success across the entire workforce. We also found that companies should consider the following:

  • Support Two-Way Visibility: Companies should consider suppliers and vendors that will provide visibility into spend and headcount. But visibility and transparency needs to be bi-directional. Companies should also provide visibility to suppliers, so that they can get talent quickly and with less administrative work.
  • Understand Cost Control: Most companies do not pay attention to cost until it is too late. According to this study, 39% of companies are not tracking costs for contingent workers and 42% of companies looking to reduce spend are just trying to control these costs. Controlling costs represents a growing concern that companies may be spending more than they should. Many aspects of managing contingent labor can impact program spend, including lack of budget visibility and how budgets are being allocated.
  • Invest in the Right Provider: Traditional VMS providers and contingent workforce solutions do not provide enough visibility to empower organizations to make better decisions around spend and vendor management. Companies should consider providers that offer deeper insights, real-time dashboards, and workforce planning capabilities. 

As companies increase their investment in contingent labor this year, improving visibility should be a priority. Companies need to have deeper insights into headcount, spend, and the overall success of their extended workforce. On June 8th, I will be joining Dan Beck, COO and co-founder at Utmost, to talk about what companies can do to improve visibility, use the link below to register.

[Webinar] - Total Talent Management is the Key to the Future of Work

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Join Utmost's COO and co-founder Dan Beck and Aptitude Research founder Madeline Laurano on June 8, 2021, at 10 am PT | 1 pm ET for a discussion on how companies are starting to think critically about how they source and retain talent, talent strategy ownership, technology needs to support total talent management, and what components of visibility are required to make better business decisions.

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