Why Your Contingent Workforce Program Sucks (and how you can change that)

It’s well-known in today’s continually changing workplace that engaging Contingent Workers is a great strategy for:

  • Filling skills gaps in your business;
  • Reducing payroll costs, and other PAYG costs;
  • Gaining access to high-end talent for specific, clearly defined projects;
  • Boosting efficiency of project delivery, especially as ‘time is money’;
  • Increased flexibility of upscaling & downscaling as your business demands.

So many opportunities, so much benefits!
However, where most organisations tend to come unstuck – and hence fail to realise these benefits – is in its management. They fail to strategically navigate the complex landscape of Contingent Workforce management, so the opportunity is lost, and the concept of engaging contractors becomes a massive headache, and an epic failure!
So… read on. If you are having trouble with your current program, then the following will be very insightful for you. And like anything, what you don’t know really can’t hurt you…
[bctt tweet=”Contingent Workers are great for filling skills gaps and reducing costs says @peteroreb” username=”ATCevent”]

The Four Pillars

Every Contingent Workforce program is built around the concept of Four Pillars and these are the central tenets of a commercially successful, streamlined and risk-mitigated program. By partnering with a Managed Service Provider (MSP) or a Contractor Management Outsourcing organisation, you’ll have the Four Pillars down pat in no time.
There are a host of deliverables you should be realising if your program is working well – and the Four Pillars will help you get there.
So, here they are:

Pillar #1: Quality
guaranteeQuality refers not only to the standard of contract talent you attract to your business, but also the way you attract them, and how you manage them once they are on-boarded. Your key quality considerations are:

  • Your supply chain is robust, well-selected and operating efficiently (for example, you have negotiated better rates for your contractors from your panel of preferred suppliers);
  • When you are sourcing directly, your internal processes are streamlined & efficient (sound foreign?);
  • Payroll and contractor management are streamlined via a third party.
Pillar #2: Efficiency

If your internal processes and procedures are running like a well-oiled machine, you will have access to data that enables you to measure the performance of your contractor workforce. Key to success here is visibility:

  1. Visibility of performance metrics:
  • How long it takes you to source, approve, hire and on-board your contractors;
  • Internal processes are streamlined so you can see the commercial value of your contract talent;
  • You can seamlessly re-engage contractors because your internal processes are so slick.
  1. Visibility of your Supply Chain deliverables:
  • Keeping tabs on your suppliers, to ensure they’re meeting their KPIs;
  • Ensuring your internal processes are uncomplicated, will assist your suppliers in servicing your business.
  1. Technology:
  • Technology can take on tactical, process-based tasks, creating greater efficiencies in the management of your program;
  • The data generated from technology will also deliver better visibility of the performance of your program.
Pillar #3: Risk
shutterstock_186772571Risk comes in many shapes and sizes. The greatest potential for risk comes from:

  • Work rights and pre-employment checks: making sure your contract workers are legitimately allowed to work in Australia;
  • Worker classification/co-employment risk: where the worker may be deemed an employee by more than one employer;
  • WHS: ensuring your contractors are covered for workplace health & safety;
  • Statutory and tax payment: the right worker classification will mean the right taxes are being paid.

If you don’t have this part of your contractor management house in order, you could be breaking the law.

Pillar #4: Cost

Is the cost of your contract workforce exploding? Then, yep, your program is in bad shape! Cost blow-outs occur for a number of reasons:

  • Rogue supplier spend: where your suppliers aren’t keeping tabs on the cost of your contract workers;
  • Above market pay rates: an unnecessary cost burden, where benchmarks have not been set around contractor pay rates;
  • Unnecessary overtime costs: where a contract worker has negotiated an hourly pay rate, for example, their overtime costs can blow out, particularly if there is little awareness or transparency around how they are paid;
  • Invoice inaccuracy: where the recruitment agency is loading their margin onto charges outside of the contractor’s fee;
  • Un-managed on-costs: where workers compensation, PI, PL insurances aren’t streamlined or well contained.

So have a think about these Four Pillars and start looking into the health of your current Contingent Workforce program. You might be pleasantly surprised at how much more you can do to streamline the processes and reduce costs.
Images: Shutterstock

This article is sponsored by CXC Global.

Join Peter, along with other leading Contingent Workforce experts including Alan Wilkerson, Matthew Dickason and Antonia Mochan, to learn more at the Contingent Workforce Conference 2016. Limited tickets left. See full agenda and purchase tickets here.
CWF2016 eNews Banner

Related articles

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Sign up to our newsletter

Get a weekly digest on the latest in Talent Acquisition.

Deliver this goodness to my inbox!