By now, your company probably knows just how beneficial tapping into the contingent workforce can be. The use of “non-permanent” workers will help your organization fill skills gaps, assess your workforce needs on an ongoing basis, improve your efficiencies, cut costs and much more.

That’s why the contingent workforce has grown significantly in recent years. A report from Intuit Canada estimates that freelancers, independent contractors and on-demand workers will make up 45 percent of the Canadian workforce this year (2020).

Accessing the top talent in your industry at the best rates is crucial to your company’s bottom line, and the contingent workforce can help you do that. Unfortunately, however, most businesses (no matter the industry) are managing their non-permanent workforce incorrectly.

The result? Today’s businesses are struggling to deal with the hidden costs associated with a poorly managed contingent workforce. Here are four reasons why your contingent workforce management program is resulting in poor cost management:

1 - You are paying inconsistent rates

Any organization’s contingent workforce management strategy should be centralized and unified across the entire company. That means all hiring managers know exactly which vendors to use and how much to pay for talent.

The complex nature of contingent workforce management, however, makes this impossible to implement for most organizations. A successful program requires a team of knowledgeable contingent workforce experts to implement successfully - and it’s unlikely your company has that in-house.

This generally results in a fragmented program for most companies, where hiring managers use their own initiative to hire workers at the price they think is acceptable. This leaves your entire company paying an inconsistent rate across its contingent workforce.

2 - Poor decision making from workforce managers

The decisions that your hiring managers make are vital for the success of your company. Good decisions will drive company growth, while poor decisions can lead to inefficient processes, wasted money and poor hiring choices.

With a lack of insight into your contingent workforce through poor management, these decisions are made almost impossible. Incorrect information will lead to bad decisions across a range of areas, including vendor relationships, workforce hiring, sourcing methods, future planning and much more.

3 - You aren’t forecasting future needs

Any successful contingent workforce management strategy should give you the visibility and control you need to forecast your future needs accurately. This could be anything from preparing to scale your workforce up or down, accessing expertise that you don’t hire in-house or preparing for changes within the market you operate.

Unfortunately, poor contingent workforce management strategies lead to last-minute scrambles to fill positions. The result? More expensive talent acquisition decisions as your organization panics to fill workforce gaps.

So, what’s the solution?

An improved contingent workforce management program will lead to significantly better cost management for your business. With contingent workforce management programs being so complex, however, how exactly can your company ensure its strategy is a success?

The simple solution is through outsourcing a managed services provider (MSP).

An MSP with contingent workforce expertise, such as HCMWorks, will develop a strategy and give you access to a world-class vendor management system (VMS) that improves your workforce visibility, saves your company money, gives you access to top talent and ensures that you’re working with the right vendors for your specific needs.

Want to learn more about how an MSP can revolutionize your contingent workforce management program, bringing you complete control over cost management? Contact the HCMWorks team of experts today.