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HCMWorks Insights

How Contingent Labor Management Also Helps You Minimize Costs

Posted by Julia Fournier on 20 Oct 2015

As an ever-changing and complex ecosystem, your contingent workforce needs to be properly managed in order for your organization to maximize its value. This is especially true as you add more and more non-permanent workers to your staff, all of which will be typically managed through different departments using different processes and procedures. Disjointed efforts in contingent labor management may not only reduce productivity and performance and increase your risks and liabilities, but also increase costs.

Your organization needs effective contingent labor management in order to minimize costs and maximize value.

Heightened Efficiency

When your contingent workers are being sourced by various hiring managers, when they’re being paid different rates on different schedules, and when they’re being managed with spreadsheets or pen and paper, it’s easy for your processes to quickly become inefficient.

Managing your contingent workforce in a disorganized way will only lead to an increase in administrative errors, a duplication of efforts, and a fragmented flow of information. This will inevitably lead to higher expenses: your administrative and operational costs are sure to increase. But with a contingent labor management program you can minimize costs. The more streamlined and efficient your processes and procedures are thanks to automation, the less expensive they’ll be.

Great Sourcing Capabilities

Sourcing contingent workers is no easy task. Your spend in this indirect procurement category could be significant. The more non-permanent workers you hire, the higher your costs will be, so you need to be careful to get the best value for your dollar. By implementing effective contingent labor management, you can get greater insights into your budget, your project needs, and the value of each worker you’re considering hiring. With a program in place, you’ll be able to make more informed decisions that minimize costs associated with bad sourcing.

Greater Performance

If you cannot track and measure the performance of your contingent workforce, you might end up paying high costs for poor service. And you won’t realize it until it’s too late and the project is completed. Contingent labor management can provide greater visibility into your contingent workforce’s performance, so you can ensure that regulations and requirements are being followed and be alerted to performance issues before it’s too late to rectify the situation.

Outsource to a Managed Services Provider (MSP)

Though many business owners have come to realize that they need effective contingent labor management to maximize value and minimize costs, many are unsure of how to go about it. It takes the creation of a strategic end-to-end process for true effectiveness. If you want to get it right, you should consider outsourcing the responsibility to a managed services provider (MSP). These experts understand that your contingent workforce needs specialized attention and they have the knowledge, experience, tools, resources, and technology required to effectively manage your contingent labor.

Contingent Labor Management Is Now a Necessity

Though organizations have been using contingent workers for a long time, it’s now becoming more prevalent in the business world. They no longer make up a small percentage of the total workforce; they are now becoming more and more critical to organizations’ core strategies.

Though this business decision has great advantages, such as increased flexibility, reduced payroll costs, and greater skill sets, it’s vital that business owners now take a proactive and strategic approach to managing their contingent labor. Inefficient management processes will only lead to poor performance, more errors, wasted time, and higher costs.

A contingent workforce management program is necessary if your organization uses a large amount of contingent workers as part of its business strategy. It is the only way to optimize performance and minimize costs to get the best value for your dollar.

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