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HCMWorks Insights

Three Strategies to Help Manage Contingent Workforce Costs Part 1

Posted by Julia Fournier on 8 Jan 2018

It can be difficult to keep track of your contingent workforce, and Peter Drucker’s adage, ‘you can’t manage what you don’t measure’, applies. You may have hiring managers in different branches of your company engaging contingent or non-permanent workers, creating unseen workers who are not entirely visible to your human resources department.

Visibility and the ability to aggregate HR / Vendor data across an organization can be a challenge, but opportunities exist in several areas to help manage contingent workforce costs. Let’s look at a few strategies.

1. Better Sourcing of Your Contingent Workforce

One way to help keep contingent costs down is having access to the best possible talent who will be readily available for the job you have to fill. Without quick access to the right talent, you will be rushing to fill the positions and more times than not, overpay drastically for the workers that you retain. Or the contractor you engage in haste might not deliver at the same productivity as a more suitable worker.

On top of this, you need to utilize the the right resources at the right time to access the best talent for your organization, it goes without saying that you pay a large premium when you source through your supply base. When left unchecked, sStaffing vendors in North America tend to markup anywhere from 30% to over 75% on your labor.

So how can you reduce spending on your contingent workforce? A popular method for sourcing talent is referral candidates, who tend to be your best hires as employees will tend to only refer someone who is a good fit for the job, has a decent work ethic and fits well with your organization.

Furthermore, internally sourced workers are usually the most cost-effective hires you can source. Having a solid attraction strategy will give you better quality candidates and will save you from vendor markup cost, and multiple sourcing costs. An example of an effective attraction strategy would be a referral bonus for the person who refers the successful candidate.

Develop an internal talent pool for your company, a central database that contains contingent workers who have previously worked for you, people who have proven their skills, and have the work ethic you are a looking for..

This speeds up the process because the candidates have previously been screened, interviewed, vetted, been inducted into your organization and have demonstrated their ability to produce tangible results for you. Within this talent pool, you can include candidates who are deemed as high value, be that via referral or people you know.

10 Ways to Reduce Costs & Risk of Your Contingent Workforce

Check back in a few days time for the second half of this blog with the second and third strategies to help manage your contingent workforce costs.

If you are interested in discussing your contingent workforce sourcing or exploring other ways to manage your contingent workforce and better manage costs, get in touch with one of our contingent workforce management advisers.

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Tags: Contingent Workforce Management

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