Five Ways Employers Can Better Manage Contingent Workers

176436790Although the global economic crisis of 2008 is officially in the rearview mirror, many companies are still hesitant to bring their full-time staffing numbers up to pre-recession levels for fear that they will have to undergo layoffs if the economy takes another dip. The reality is, these economic seesaws – and their subsequent business impacts – have become increasingly common over the years. As a result, more organizations are focusing on developing agile workforces that can more readily accommodate their shifting business demands.

A top business priority, the need for agility is leading a significant number of HR leaders to turn to contingent and contract labor to deliver the flexibility they require to remain competitive. According to respondents to our 2015 Talent Trends Survey, nearly half (46%) are taking under consideration every type of labor – permanent, temporary, contractor and statement of work (SOW) consultants – when it comes to their workforce planning efforts.

The majority of companies are already incorporating contingent workers into their workforce. A Staffing Industry Analysts survey showed that 75% of firms reported using contingent workers in 2014 due to variable or unpredictable work levels. The trend is expected to continue into the foreseeable future, with 69% of companies in our survey saying that they believe they will need a higher percentage of contingent workers over the next five to 10 years compared to the percentage they use today.

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And, it’s not just businesses that are clamoring for more flexible employment options. Increasingly, candidates are seeking work arrangements that allow them to schedule their jobs around other commitments and priorities. From experienced retirees who want to remain in the workforce in a lesser capacity to specialized freelancers who seek out project-based work, skilled workers are looking for contingent job opportunities that support flexible hours and deliver a more accommodating work environment. The Millennial generation, in particular, ranks work-life balance as a top priority. By supporting a variety of scheduling options, companies can enhance their ability to attract and acquire the specialized talent they need.

The growing number of contingent workers on the market, however, means that organizations are faced with increased complexities and potential compliance risks if this workforce is not managed effectively. To address the challenges, companies are implementing new, innovative methods for hiring and engaging contingent workers, helping to ensure that these workers are fully integrated into the organization’s culture and processes.

Before you can begin to bolster your workforce by hiring temporary, contract or SOW labor, you’ll want to consider these five best practices:

  1. Know the strategic value of contingent workers for your organization. Explore how flexible talent might be better leveraged to help you achieve your business goals. Look for areas where your company may benefit the most from the increased agility that contingent workers can provide.
  2. Implement a robust strategy. Before beginning the hiring process, be sure that your company is adequately prepared to bring on contingent workers. Ensure that you have insight into your contingent labor spend and vendors. Prepare hiring managers for the shift to a blended workforce. Create a consistent approach to onboarding temporary workers.
  3. Manage your risk. Hiring and managing a contingent workforce can introduce new compliance challenges. Make sure that you have the appropriate processes and policies in place to minimize the potential for non-compliant practices. Gain a firm understanding of the regulations associated with employing temporary workers, including any country-specific policies if you are hiring for international locations.
  4. Consider talent holistically. Take a big-picture view of the talent that your company currently has – and the talent that it still needs. Ensure that you have the information you need to be able to consider all modes of employment, all types of labor and all skill sets. Connect the dots between HR, recruiting and procurement to maximize efficiencies and make better data-driven workforce planning decisions.
  5. Look externally for expert insight. Seek support from an outsourced managed services provider (MSP) so that you don’t have to be the authority on how best to manage a contingent workforce. Help your company reduce risks and costs, enhance visibility, maintain compliance and capitalize on a contract workforce by working with an experienced MSP.

The use of contingent labor can benefit your company in many ways, including creating an agile workforce that can respond to changing business demands and providing much-needed skills that aren’t easy to access in a tight talent market. Understanding and implementing these best practices can ensure that your organization is well-positioned to take full advantage of the benefits of a flexible workforce.

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Nathan Gibson

Nathan Gibson
Nathan Gibson is vice president, MSP/PICS for Randstad Sourceright.

Nathan Gibson
Nathan Gibson is vice president, MSP/PICS for Randstad Sourceright.

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  3. […] As the U.S. economy continues to shift, more employers are utilizing contingent and contract labor to deliver the workforce flexibility they… […]

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  5. […] Although the global economic crisis of 2008 is officially in the rearview mirror, many companies are still hesitant to bring their full-time staffing numbers up to pre-recession levels for fear that they will have to undergo layoffs if the economy takes another dip.  […]

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