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HCMWorks Insights

How to Better Manage Your Contingent Labor Spend

Posted by Julia Fournier on 15 Dec 2015

Contingent labor is becoming more and more popular, but as a contingent workforce becomes a larger part of a company, spending can quickly get out of control. Taking advantage of hiring professionals as needed definitely benefits a business, but uncontrolled contingent labor spend can quickly become a death sentence. Luckily, there are several ways to keep that under control. Specialized departments, careful management of the hiring process and detailed reporting can all contribute to lowering the cost of contingent workers.

Managing Contingent Workers

Small companies often rely on contingent workers to help meet a deadline in a pinch, or to add talent in a new area of expertise. In the case of smaller businesses, someone may have to manage the new hires in addition to their usual duties, but for a large company tapping into the contingent workforce it is recommended that management of new employees be carried out by a dedicated person or team. With one clear person in charge, there is only one person to contact when requesting information about new hires or rates, or informing them of new requirements. If several people are responsible for workforce management and a group scattered throughout the company carries out these duties, missteps like extra interviews after filling a position, conflicting schedules, or hiring of unsuitable candidates are more likely to occur.

Hiring Manager

Keeping a close eye on how extra workers are brought aboard is another important step for controlling contingent labor spend. Accomplish this by setting a single person or small team to the task of hiring across all departments, allowing the process to be streamlined and easily monitored. A team that is just large enough to handle the task comfortably reduces the need for oversight and keeps internal costs down as well. Going as far as drawing up a form that outlines the qualifications needed by a new hire and simply filling it out and passing it onto the manager further streamlines the process and makes it easy to clearly understand what type of worker to seek out.

Tracking and Reporting

Once the hiring manager or department finds a candidate that meets the requirements, they send you a formulated message outlining the candidate and their skills. Based on this, you decide to offer an interview, and you can hire or reject the candidate based on the outcome. This sounds simple, but enacting such a policy can be difficult. Once it is in place however, contingent labor spend can be carefully tracked and adjusted. Adding or removing contingent workers, keeping the department an appropriate size, and ensuring clear communication between the departments that require workers and the department that seeks them out all work together to ensure that no more is spent than is needed.

Putting It All Together

Contingent workers bring many benefits to a company, but poor management can quickly erase the effects of these benefits. The skewed perception of contingent workers as being outside of the company that hired them is a large contributor to the inefficiencies often seen when managing them. It is best to treat them as any other employee. Just because they may be moving on once their project is completed, there is no reason to change how management and communication between them and the rest of the company takes place. Following interdepartmental structures that are already in place when developing models to control contingent labor spend not only makes sense, but also is often the simplest way to get a model in place quickly that everyone involved can agree on. Once steps for finding, deciding on, and hiring contingent help are decided and put in place, spending should fall, and productivity should rise.

The thought of revamping your workforce management process can be daunting. Consider engaging a workforce management solutions provider that can help you with change management and program adoption to ensure consistent processes are followed. You will gain visibility and control of your contingent labor spend.

 Exploring Your Contingent Workforce Ecosystem

Tags: Contingent Workforce Management

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