What is contingent workforce management (CWM)?

When it comes to talent acquisition and management, there’s no doubt that the word ‘contingent’ has become a synonymous workforce term. Never before have we experienced the level of flexibility in work that we’re facing now. The gig economy and the use of contingent workers have grown exponentially in recent years – a trend which has certainly been accelerated by the global pandemic. In line with this evolution, the need for an efficient contingent workforce management (CWM) program has become more critical than ever before for all organisations.

What is Contingent Workforce Management?

While it may be all too easy to group the entire workforce together, when it comes to effective management of talent there needs to be a separation of permanent and contingent workers due to the varied and nuanced nature in which they are employed.

Contingent workforce management is the hiring and management of non-permanent employees. This includes independent contractors, gig workers, those engaged under a Statement of Work (SoW), agency contract labour and temporary staff (find out more about the differences between each of these segments here).

Why manage the contingent workforce?

The make-up of the non-permanent workforce is complex to say the least. But it has multiple advantages, from the ability to rapidly scale resources and access to niche skills to delivering projects and meeting seasonal demand.

However, without effective management, the full benefits of the contingent workforce simply can’t be realised. As a case in point, there may be resources in one part of the business that could fill a need in another area, but due to the lack of transparency around the workers that are being engaged, costly recruitment processes are being implemented to source skills that the company already has access to.

If we also consider how fluid the non-permanent workforce is, the need for CWM to ensure workers themselves have a positive experience is key. This segment of your talent pool will have access to an array of other employment opportunities, so if they become disengaged, there isn’t always the guarantee that they can be re-employed when the need arises again.

What are the key challenges?

The flexibility that the contingent workforce affords a business is one of the greatest selling points for employing this segment – with employers able to scale the workforce up or down where necessary with relative ease. However, it is the fluid nature of this talent pool that also creates the greatest challenge.
With such a wide range of ways contingent workers can be employed, HR and procurement teams will be facing managing multiple suppliers, in a variety of sectors, locations and job roles, as well as a workforce that they arguably don’t have complete oversight on.

With differing working arrangements, how you track and engage with each section of your contingent workforce will vary significantly. As a case in point, Agency Workers will be very much driven by the agency they are deployed by, so you will likely have much closer contact and involvement with the third-party vendor than the individual.

Independent contractors, on the other hand, will be much more directly connected to HR and procurement functions.

Ensuring your contingent workforce is being employed compliantly is also a key challenge. But with the potential for the risk to be passed down the supply chain to the end-client if an individual isn’t being paid or managed in a compliant manner, or doesn’t hold the required level of employment or specific job role certification, it is a highly crucial element of contingent workforce management that should not be overlooked.

What are my options for effective contingent workforce management?

While there may be a number of challenges when it comes to managing your contingent workforce, the simple fact is, it is a necessity. Perhaps more importantly, it needs to be done right. With the gig economy growing and reliance on contingent workers increasing (not to mention the fact that more people want to be employed in a more flexible way), businesses that don’t have an effective CWM program will soon find their competitive talent pools shrink.

Of course, it is possible to manage this in-house, but it will require expert resources with the knowledge of supplier management processes and compliant employment methods, as well as access to real time data of the organisation’s contingent supply chain. For already over-stretched HR and procurement teams this in reality just isn’t feasible, which is why alternative options are often chosen.

In these instances, there are three main options for an organisation:

  • Business Process Outsourcing (BPO): Or employing contingent workers under a Statement of Work. We mentioned SoW above as a segment of the contingent workforce, but it is possible to drive elements of your CWM through this employment model. In essence, you would engage a third-party professional services company to deliver specific work for a defined cost and period. The people who deliver the work will likely be employed by a services company or operate through a Limited Company, so you would have an agreed contract in place with the company itself to deliver the work.
  • Utilising a Vendor Management System: This is essentially software that facilitates contingent workforce management. It’s often cloud-based and hosts a wealth of data that informs your CWM, but it will require management either internally or through another management solution. As with all other tech platforms, it is only as good as the data going into it and the processes and governance which surrounds it.
  • Engaging a Managed Service Provider (MSP): This is an outsourced provider that manages all or part of your contingent workforce recruitment – including the VMS. This is often the preferred choice for effective CWM due to the access it grants businesses to expert knowledge and experience of compliance, vendor management and technology platforms.

Getting your CWM in order now

Clearly effective contingent workforce management is a necessity. As non-permanent workforce numbers continue to grow, ensuring that you have the programs in place to best manage and deploy this segment of your company now is key to ensuring your business can flex and adapt in the future.

To find out more about Guidant Global’s Managed Service Provider (MSP) solutions, contact our team today.

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If you’re looking for a workforce solution that exactly meets the selection criteria for your organisation but not sure where to start, look no further! Based on our experience we've put together the first instalment of our MSP handbook, 'The complete guide to securing a first-generation MSP solution for your business'.

The aim of this guide is simple: to give you the full picture of what benefits an MSP partner provides, and information to help you decide if it's the right solution for your organisation.

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