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HCMWorks Insights

How to Improve Cost Management in Your Contingent Workforce Management Program

Posted by Julia Fournier on 27 Dec 2019

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.

This represents a significant part of your company’s workforce budget. To ensure you are optimizing your contingent workforce spend, it’s important that you gain control of your spend and realize cost savings with an effective management program.

Unfortunately, due to the complex nature of contingent workforce management, many organizations are failing to adequately control spend, manage their supply chain and optimize the processes for managing non-permanent workers.

Thankfully, there’s a wide range of strategies that will improve your contingent workforce management program and improve cost management techniques. HCMWorks has listed four of the key methods here:

1 - Improve visibility

Many companies are unaware of the potential they have for significant cost savings and efficiency gains due to a lack of visibility into their non-permanent workers.

That’s because most companies’ contingent workforce management programs aren’t centralized or unified. They have different department managers hiring temporary workers at different rates, without tracking the total cost or performance.

By tracking this data in a centralized location, your company will have the in-depth data it needs to make insightful and informed business decisions. You’ll know exactly how much you’re paying your workers, how they are performing and where your company can improve its hiring decisions.

2 - Develop better sourcing methods

To stay competitive, your business needs to keep up with the ever-changing needs of your customers. To create an agile and flexible workforce that meets those needs, you need to be able to place the right workers where and when you need them most.

You don’t have to always look in the same location for your non-permanent workers. Developing flexible sourcing methods will improve your access to top talent at a moment’s notice, such as:

3 - Analyze contingent spend

If your organization is to find actionable ways to reduce spend and improve cost management, then it’s crucial that you adequately track and measure your current contingent labour spend.

By measuring your current and historic contingent workforce spend, you’ll have the visibility needed to forecast future workforce targets. No longer will you be forced to engage contingent labour at when it’s too late.

4 - Implement a VMS solution

Wasting time and money on inefficient administration processes within your contingent workforce management program? A vendor management solution (VMS) is the answer to your problems.

By storing your entire contingent workforce data in one centralized place, your company will be able to easily access important information, such as payment, compliance, onboarding and performance data. This streamlines your processes, reduces expensive administrative errors, saves time and unifies your entire contingent workforce management program.

How outsourcing to an MSP will help

The contingent workforce offers your business increased flexibility, reduced costs, lowered risk and much more - but implementing a successful contingent workforce management is complex.

That’s why many organizations turn to the help of an outsourced managed services provider (MSP) with specific expertise in the contingent workforce. By outsourcing, your company will gain access to the right processes, tools and metrics required to effectively manage your contingent workforce.

This includes more effective organization, increased workforce visibility, improved efficiencies, better sourcing methods and much more. Once this is in place, your outsourced MSP will be able to work with you and help you realize a measurable reduction in costs.

Ready to learn more about implementing an effective contingent workforce management program? Contact HCMWorks today and learn how we can develop a successful cost management strategy for your company’s contingent workforce.

Helping a Client Manage their Contingent Workforce More Efficiently

Tags: Contingent Workforce Management

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