A proven outcome resulting from comprehensively managing your entire contingent workforce, including your independent contractors, is a sizeable and measurable reduction in costs.
At a high level, a lack of visibility of your contingent workforce headcount and services procurement spend can translate into some significant challenges for an organization. To name just a few:
A thorough analysis of your total spend and vendor base, serves as a baseline to optimize current spend and identify savings opportunities. Managing the number of service providers and staffing vendors you deal with is the first step to enhancing your buying power. By consolidating your services procurement activities between a handful of best-of-breed vendors, you can more effectively negotiate margins, rate and long term (volume) discounts.
In addition, you can create a sense of partnership among your preferred suppliers and more effectively share information to support your sourcing objectives. In the medium to long-term, creating healthy competition within this pool of quality vendors will help drive down costs and simplify the management of your procure-to-pay process.
Perhaps the greatest challenge faced by most organizations using various forms of contingent workers is properly accounting these individual within your organization. Why? Because these resources are often sourced and retained directly by hiring managers; rogue hiring and spending that escapes traditional accounting and control.
Not only does the time-to-fill stretch out far beyond the acceptable norm, but the entire procure-to-pay process, from “procure-to-pay ” as the expression goes, becomes bogged down and convoluted.
Rogue recruitment and spend is by definition highly inefficient since hiring managers are generally venturing into unfamiliar territory. They are subject to information asymmetry, a lack of market information and often hire or pay for human capital in excess of 40% above competitive market rates.
Hiring managers are not to blame. Yet, how could a vehicle with real, historical and strategic information help them make more informed decisions? This all comes together with the help of a well planned workforce management solution. Furthermore, beyond the hiring decision, a poorly managed contingent workforce, is prone to costly (double) time sheet data entry, fraud and reporting errors, on top of a slow and cumbersome recruitment process. This is the kind of marketplace chaos that your organization can convert into tangible savings opportunities.
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Last year at HCMWorks we wrote an article about a study by The Economist that found the demand for contingent workers would skyrocket over the next five years, with more than 61 percent of top bosses expecting the use of contract labour to increase.
The report surveyed executive decision-makers at 210 US and UK companies with at least 2,000 employees, finding that contingent workers account for more than a fifth of the workforce at over half (58 percent) of those businesses. A figure set to grow over the coming years.> Read More
The contingent workforce is always changing. Whether it’s the growing pool of workers, new methods of sourcing talent, changing workforce laws or optimizing your contingent workforce management program, there is always something new to learn and implement.
Making sure your organization stays on top of these changes is a crucial element of ensuring your contingent workforce is consistently optimized so that it can maximize results for your business.> Read More
Organizations have significantly increased their use of contingent workers over the past decade, helping to compete with rising labour costs, improving access to top talent and adapt to rapidly changing market conditions.
In fact, new Ardent Partners research shows that 41.5 percent of the average enterprise’s total workforce is considered non-employee, which includes temporary workers, independent contractors, professional services, gig workers and freelancers.> Read More