What Is Contingent Workforce Management? Definition, Importance, Benefits

Working with a large team, one that is still inefficient when it comes to tackling a particularly difficult problem, can be challenging. And trying to complete the task in a specified duration is the biggest challenge. This got businesses thinking and the solution was to make use of contingent workforce. And there soon came into the picture, companies offering contingent workforce management services.

What Is Contingent Workforce Management?

Contingent workforce management is the process of managing temporary, on-contract, or freelance workers for a business. Contingent workforce management is also called contingent labor management. Contingent workforce management is generally provided by a third-party staffing service provider. This is why it is generally called contingent workforce management services.

What Is the Importance of Contingent Workforce Management?

Contingent workforce management offers several benefits, many of which will be very helpful for startups and mid-sized enterprises, as they can structure their workforce as they grow. Some of the benefits of contingent workforce management are:

1. Cost Savings

There are a lot of cost-savings in using a contingent workforce hiring and management partner. They will be more familiar with the best practices and reduce the risk of fines and bad hires.

2. Flexibility

Companies can scale up or scale down their workforce as required. The workers are all temporary or freelance workers and need not be offered the benefits employees are offered.

3. Access to Specialized Skills

Since contingent workforce hiring and management are managed by a third party with great experience, they can find suitable candidates with specialized skills and the right experience.

4. Improved Productivity

By hiring experienced people or those with specialized skills, companies can raise the quality of work in a project and reduce the time taken to complete tasks, boosting productivity.

5. Risk Mitigation

When working with a third-party contingent workforce management solutions partner, the risk is also reduced as high-quality talent is engaged and best practices are followed.

What are The Challenges of Managing a Contingent Workforce?

1. Issues with Compliance

Businesses often need to navigate pay and work timing compliance across multiple countries, which might prove to be a major difficulty. And lack of compliance can lead to penalties and heavy fines too.

2. Limited Loyalty

When managing a contingent labor force, this is a major problem. The temporary or freelance workers you hire may lack loyalty and commitment.

3. Issues with Knowledge Transfer

Because the temporary workers may be taking over the duties of a full-time office worker, there is little coordination between them when it comes to knowledge transfer.

4. Onboarding and Training Complexities

When onboarding the contingent labor, great care must be taken to clearly explain the policies and seek acknowledgement, so you are sure they have understood. A point of contact must also be provided.

5. Inconsistent Performance Management

The performance management monitoring of the contingent workforce is done through a portal, and there are generally no face-to-face meetings. If they are assigned various tasks, there could be inconsistency too.

6. Security Concerns

The temporary and freelance workers provide their data to your business on a regular basis, with or without their knowledge, and it is your responsibility to ensure its safety on a self-service portal.

The Role of DEI in Contingent Workforce Management

The principles of diversity, equity, and inclusion play a big role in contingent workforce management. Some of the ways that DEI principles can help contingent workforce management are mentioned below:

1. Fair sourcing practices

Source from several different channels, to bring about more diversity when hiring a contingent workforce.

2. Transparent communication

Be open and clear in your communication so that the intended goal is achieved and put everything in an e-mail so there is a record.

3. Inclusive onboarding and training

Make the onboarding and training more interactive and inclusive. This way you can also hire people with special abilities as part of the contingent workforce.

4. Performance evaluation criteria are personalized

When managing the contingent workforce, it is essential to ensure that the performance evaluation criteria are personalized and not the same for everyone.

5. Addressing bias

Bias must be addressed at every stage of the staffing process, be it at sourcing, screening or onboarding. Special training must be provided to keep bias out of the process.

What are the Hiring Trends in Contingent Workforce Management?

1. Prioritizing Skills Over Degrees

Many companies hiring contingent workforce are doing so by prioritizing skills over degrees. This helps them hire experts who will bring out quality at work.

2. Adoption Rate of Contingent Staffing is Increasing

More and more businesses are adopting contingent staffing, and this has led to the growth of contingent workforce and practices that encourage it in companies.

3. Online Platforms Are Becoming More Popular

Online platforms that help manage contingent talent are becoming more popular. These platforms also enable monitoring performance and managing attendance too.

4. Growing Interest in Managing Compliance

There is a growing interest among companies in managing compliance. This is because many workplaces have a workforce that is spread across geographies, which brings in different rules related to employment.

5. Growth of remote work

The growth of the contingent workforce has also led to the growth of remote work and the infrastructure to enable it. AI has also helped in this instance by streamlining operations and making them suitable for remote workers.

Key Factors to Consider in Contingent Workforce Management Solutions

1. Onboarding Process

The onboarding process suggested by the contingent workforce management partner must be smooth and well-integrated into the staffing process.

2. Performance Management

Contingent workforce must have clear metrics and feedback mechanisms to ensure that performance management helps the business grow.

3. Compliance

The contingent workforce management services partner must also have a clear idea of how to classify contingent workers and what their rights and responsibilities are.

4. Cost Control

A great contingent workforce management solutions partner must be aware of the latest trends in the industry and control the costs and keep contingent workforce management effective.

What Are the Best Practices for Managing Contingent Workforce?

1. Set Up Structured Processes

To reduce the increased expenditure, lack of compliance, and the possibility of other issues, it is necessary to set up structured processes for contingent workforce. Structured processes also lead to increased productivity when it comes to contingent workforce.

2. Establish Clear Communication Channels

Workers and managers must have clarity in communication. In addition to this they both must have a clear way to communicate with the HR too. This way it is possible for the contingent workforce to communicate any concerns they have and for managers to address them soon or the HR to act as a bridge between the two.

3. Streamline Onboarding Processes

The onboarding process must be perfected not just for permanent hires but for freelancers and contract staff too. By clarifying doubts, they have about the company or its policies, and by sharing the knowledge that is necessary to use the tools at work, HR can ensure greater quality of work in the future.

4. Track and Recognize Performance

Monitor the progress made by contingent workforce and recognize any achievements. While it is necessary to reward permanent employees, the contingent workforce must not be ignored and their contributions to making the business grow must be acknowledged too.

5. Conduct Regular Compliance Audits

Contingent workforce management must also have regular compliance audits which ensure that the compliance is on track and that the stakeholders are performing their duties well. It will also ensure that there are no penalties levied on the business or a need to pay heavy fines.

What Is the Future of Contingent Workforce Management?

With many companies hiring contingent workforce, the future of contingent workforce management is very bright. Third-party contingent staffing services are also becoming more and more relevant, and with AI and technology bringing in greater accuracy and cost savings, such contingent workforce services are also very cost-effective and reliable.

Are You Looking for a Contingent Workforce Management Partner?

Alp Consulting has rich experience of over 25 years in recruitment and staffing.  We are a contingent workforce management partner who can help meet your contingent workforce needs without sacrificing compliance, control or ease of management. Our timely contingent workforce management solutions have been praised by several Fortune 500 companies, and we are looking forward to serving you next. When can we talk?

Frequently Asked Questions (FAQs)

1. What is contingent workforce management?

Contingent workforce management is the process of managing temporary, on-contract, or freelance workers for a business. It is also referred to as contingent workforce management.

2. Why is contingent workforce management important?

Contingent workforce management is more cost-effective, there is increased productivity and excellent risk mitigation. Companies also have access to specialized skills which can impact on the whole team, saving a lot of time in solving difficult problems.

3. What are the key benefits of using contingent workforce management?

The key benefits of using contingent workforce management are the ability to save a lot when it comes to hiring expenses, less long-term risk for companies and greater flexibility in hiring and contingent workforce management.

4. How can organizations effectively manage external contributors in workforce ecosystems?

A lot of the contingent workforce hired work as external contributors for the business. When working on a contract basis or as a freelancer, such businesses must avail themselves of the services of a staffing company like Alp Consulting, which will greatly simplify the process.

5. What challenges are associated with contingent workforce management?

The challenges associated with contingent workforce management are security concerns, limited loyalty, and issues with compliance. There is also a greater risk if the contract signed is not adhered to, as it can affect project continuity.

6. How can contingent workforce management help businesses save costs?

Contingent workforce management can help businesses save costs by reducing the need to rehire, effectively using the existing resources, and by making use of advanced technology for more accuracy and lowered risk.

7. How can businesses mitigate risks associated with contingent workforce?

Businesses can mitigate risks associated with contingent workforce by managing resources in a better manner and opting for contingent workforce management services. A reputable staffing company like Alp can be of great help.