Ask any business what their HR challenges are today, and they usually cite the shortage of human capital and the lack of skilled talent to fill open positions as one of their biggest issues. Further down the list, and of increasing importance, is reducing and controlling staffing costs.

The challenge of finding the right people to fill the talent gaps at the lowest possible cost can be a mission critical requirement for many organizations, but what is the best way to do this?

A solution that is becoming more universally accepted is to implement a managed contingent workforce solution that provides access to a vital source of quality talent with carefully managed costs.

A managed services program, or MSP, is a combination of process, practice, and technology that allow you to centralize and consolidate all your temporary workers, from both staffing vendors and directly sourced.

An MSP enables you to easily streamline, simplify and manage your contingent workforce supply chain from requisition to payment, and everything in-between. The outcome is increased visibility on contingent headcount and spend, reduced costs and greater compliance with federal and state regulations.

What is important to understand is that there are lots of ways that your MSP partner can help you save money, beyond the basics of rate rationalization, process streamlining, program standards, etc. 

Selecting a staffing supplier based on the lowest pay and bill rates or focusing solely on cost of hire are not necessarily the only, or the best solutions to cost control, especially in a market where skills gaps continue to widen and business leaders repeatedly cite the shortage of talent as a critical deterrent to growth. A more sensible approach is to consider the total cost of hire, focusing on quality, value and return on investment.

The Total Cost of Hire

Using Independent contractors (IC) as part of your contingent workforce has its clear advantages and does not carry the typical tax and benefit burdens of a full-time employee. There are also other economic impacts from making the right hire that can be taken into account when calculating your total cost of hire.

The best-quality candidates, most closely matched to your staffing requirements, will potentially deliver greater productivity, a better quality engagement, overall superior performance, with lower turnover.

A quality IC will ease into your workplace with the least disruption to the rest of your staff and will quickly contribute to advancing your goals. They've been there and done that before ... so to speak.

Whereas mismatched ICs, whether defined by skills, experience or cultural affinity, can have the opposite impact. They can negatively impact your ability to execute plans, delay project completion, damage employee morale and require additional supervisory focus. 

The bottom line is that decisions based on initial price alone can increase other direct and indirect operating costs.

Your talent acquisition process can be adjusted to reduce the overall cost of hire without excluding the market’s best candidates. Your MSP partner can help you to explore innovative ways to save money without negatively impacting the ability of the suppliers in your network to secure the talent you need in a tight labor market.

About HCMWorks

We are a contingent workforce service provider helping organizations gain better access to talent through the use of independent contractors, consultants, temporary workers, freelancers and other non-payrolled employees. We provide the expertise, the technology, and processes to help you reduce your workforce costs, mitigate against misclassification and co-employment risks, and increase the efficiency and timeliness of your contingent recruitment process. Read more about what our clients say about us here.