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Global HR Practices

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Contingent Workforce Management: Everything You Need To Know

The modern workplace has evolved in many ways in recent years. Since the pandemic, remote work and hybrid arrangements have become the new norm. For now, at least. Businesses are integrating innovative solutions to enhance and future-proof their operations, while modern professionals leverage skills for full-time, part-time, or contract-based opportunities. 

Employees now consider freedom and flexibility as key factors in employment decisions. Therefore, businesses are managing both internal teams and contingent employees. In this blog, we discuss the contingent workforce—what it is, why it is important, and the advantages of contingent workforce management.

What is a contingent workforce?

A contingent workforce consists of employees who are bound by time or project-based contracts. Businesses often hire these employees to meet their operational demands and stay competitive in the industry. The combination of internal and contingent teams contributes to improved productivity and growth.

From a financial standpoint, hiring a contingent workforce is preferable to hiring full-time employees. You only pay for their skills when needed and are not responsible for insurance, taxes, or benefits.

Also, the availability of talent is a significant advantage of hiring contingent employees. Freelancers and contractors possess the marketable skills you require, allowing you to complete important tasks on demand. The gig industry offers a diverse skill set that is hard to find elsewhere, bridging any skill gaps in your workforce.

Additionally, the process of replacing full-time employees can be cumbersome. Amidst the Great Resignation and economic uncertainty, employees are let go or leave for other opportunities. In such cases, a contingent employee can serve as a temporary replacement until you train a new recruit.

Why businesses need contingent workforce management

Contingent workforce management involves efficiently finding and engaging non-permanent workers within a company. This encompasses various tasks such as hiring, task assignment, performance management, and payment processing. Despite some similarities, managing a contingent workforce differs from managing regular employees or using existing employee management systems. 

To effectively engage contingent workers and streamline processes without complications, it is crucial to establish a dedicated contingent workforce management system.

Managing a global contingent workforce can be complex, but the benefits are well worth the effort. Contingent workers offer several advantages, including the ability to quickly scale up resources, access niche skills for project delivery, and meet seasonal demands. To fully leverage the potential of this workforce, an efficient contingent workforce management system is essential. It should not only optimize their performance but also provide a positive work experience.

Unlike full-time employees, contingent workers have the freedom to move on to better opportunities. Therefore, it is crucial to manage their talents effectively to foster long-term engagement. Many companies make the mistake of managing their contingent workforce on a departmental basis, with only one point of contact for the workers. This approach often leads to a lack of awareness within the organization about the available talent pool and can result in unnecessary spending on additional hires.

By managing a contingent workforce transparently, businesses can maximize the potential of their existing talent pool. This includes optimizing resource allocation, improving coordination, and reducing wasteful spending.

Types of contingent workforces

  • Freelancers: This group includes individuals who are self-employed and provide services to multiple clients at once. They often specialize in a specific skill set. Freelancers offer flexibility in terms of hours and workload. They can be hired for expert tasks, saving the company the cost of training a full-time employee.
  • Consultants: These individuals or companies provide expert advice professionally in a specific field such as management, education, or marketing. Consultants bring a wealth of experience and specialized knowledge to a project. They can provide a fresh perspective and help improve business practices.
  • Temporary Contract Workers: These people are hired for a specific time period, usually to assist with a heavy workload or to cover for permanent employees during absences. Temporary contract workers provide a short-term solution to workload fluctuations without the commitment of a permanent hire.
  • Outsourced Workers: Workers from external firms or vendors who are contracted to perform specific tasks or functions. Outsourcing can help a company focus on its core competencies by delegating non-core tasks to specialists. This can also lead to cost savings in terms of labor and overhead costs.
  • Gig Workers: Workers who operate in a gig economy, taking on piecemeal work often facilitated by a digital platform like Uber or TaskRabbit. Gig workers offer extreme flexibility and can be a cost-effective way to get routine tasks done.

Each type of contingent worker offers unique advantages, but all provide flexibility and potential cost savings. Companies can mix and match these types of contingent workers to best meet their needs.

Contingent workforce management best practices

Much like any other form of management, it’s always a good idea to identify and learn some best practices to ensure productivity, organization, and progression. Also, striving to provide the best possible work experience for contingent workers is incredibly important for well-being and fulfilment—both prove critical for high-quality, enthusiastic work structures.

Consider the following contingent workforce management best practices:

  • Define and Document Policies: Specific guidelines and processes should be set for contingent workers. These policies will provide a clear framework for managing this segment of your workforce source.
  • Centralize Your Program: To prevent inconsistent hiring, it’s recommended to centralize your contingent workforce management program. This approach can enhance coordination and efficiency source. Fortunately, Multiplier offers a unified platform for all employee data, insights, and processes—boosting collaboration, transparency, and performance management.
  • Build Effective Employment Relationships: It’s important to establish good relationships with contingent workers, as this can promote knowledge sharing and encourage a collaborative spirit.
  • Manage Data Quality and Security: Assess your data needs and sources and establish data security protocols. This can help ensure the quality and safety of your contingent workforce data source.
  • Prioritize Communication and Set Clear Expectations: Make sure contingent workers feel part of the team by prioritizing communication. Establish expectations on both sides to ensure a smooth working relationship.
  • Provide Necessary Resources: Ensure that your contingent workforce has the resources they need to perform their tasks effectively. This includes clear work instructions, contract templates, and specific work descriptions.
  • Enhance Visibility and Improve Expense Tracking: Greater visibility into your contingent workforce can lead to better decision-making. Moreover, improved expense tracking and cost savings can result in a more efficient and profitable operation.
  • Get External Support and Stay Vendor Neutral: Engaging external support and maintaining vendor neutrality can help ensure the best outcomes for your contingent workforce strategy.

Steps for a solid contingent workforce strategy

Developing a solid contingent workforce strategy requires careful planning and execution. Here are some steps to help you get started:

  • Define Your Business Objectives: Understand what you want to achieve with a contingent workforce. Are you looking to fill short-term needs, bring in specialized skills, or reduce costs? Your goals will guide your strategy.
  • Assess Your Current Workforce: Evaluate your existing staff and identify any gaps in skills or resources. This will help you determine what kind of contingent workers you need.
  • Identify Suitable Roles for Contingent Workers: Not all roles are suitable for contingent workers. Determine which tasks can be effectively performed by non-permanent staff.
  • Establish Clear Policies: Develop policies for hiring, managing, and compensating contingent workers. Be sure to comply with all relevant labor laws and regulations.
  • Choose the Right Hiring Channels: There are many ways to find contingent workers, including staffing agencies, job boards, and freelance platforms. Choose the channels that best fit your needs.
  • Implement a Management System: Use a system to track and manage your contingent workers. The Multiplier platform makes HR infinitely simpler and more efficient. This ensures productivity remains high, mistakes are avoided, and the stress of HR tasks is a thing of the past.
  • Provide Proper Onboarding and Training: Even though contingent workers are not permanent employees, they still need to understand your company culture and how to do their jobs effectively.
  • Evaluate Performance Regularly: Regular performance evaluations can help you ensure that your contingent workers are meeting your expectations and contributing to your business objectives.
  • Maintain Good Relationships: Treat your contingent workers well. Good relationships can lead to higher-quality work and make it easier to attract and retain top talent.
  • Review and Adjust Your Strategy Regularly: As your business needs change, so too should your contingent workforce strategy. Regularly review and adjust your strategy to ensure it continues to serve your business well.

Establishing a successful contingent workforce requires ongoing effort, but it can provide your business with greater flexibility, cost savings, and higher-quality work. Use these tips to help you create an effective strategy that works for you. By focusing on your contingent workforce strategy, you’ll be able to ensure that your organization is leveraging this valuable resource in a way that meets its goals and objectives.

Contingent workforce management with Multiplier

Overseeing and effectively managing a global workforce can present formidable, often headache-inducing challenges. This becomes even more complex when dealing with a contingent workforce comprised of contractors who come and go on a regular basis.

Fortunately, Multiplier’s EOR and payroll solution is the go-to for global hiring, ensuring efficiency and compliance. Embrace borderless, flexible, and efficient hiring with hassle-free contact generation from a single dashboard. Want to know more? Talk to our experts.

Ria Thomas
Ria Thomas

Product Marketing Manager

Ria is a meticulous Product Marketing, Growth, and Content Strategy professional. She has a passion for all things digital marketing and possesses a particularly sharp acumen when it comes to Product & Product Marketing.

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