For some organizations, managing a contingent labor program never seems to fit in the organizational chart. With bigger problems to address, executives typically lump temporary staffing into a Human Resources, Procurement or a Hiring Manager's workload. What tends to happen in this scenario the individuals assigned to the project do not have the experience or resources needed to effectively manage a full-scale or even a short-term contingent labor program. Thus, the debate begins.
Simply stated: chances are you don’t need a managed staffing program if all of the following aspects of your contingent labor program are accounted for.
- Solid talent supply chain; which is accurately forecasted
- The ability to report on key performing metrics
- A firm understanding of which departments manage which aspects of the program.
If all of these areas fall into perfect alignment, then congratulations! You’ve passed go and can collect your proverbial $200. For the remaining procurement professionals, it's time to determine who within your organization should be managing its contingent workforce program.
contingent workforce trends
According to Deloitte Consulting Firm, thirty percent of the procurement budget is allocated to contingent workers. To complicate matters further, there used to be a clear delineation between who within the organization was responsible for hiring and paying full-time, or direct hires versus temporary ones. Today however, the management of contingent and direct hires is more of a blurred than ever as new best practices promote the alignment of managed service and RPO programs to yield ultimate cost-savings.
Additionally, today's workforce composition is changing. The demand for more freelance, temporary and contracted workers stems from a shift in employee preferences (consistently due to work life balance) and the need for the organization to have a more flexible workforce.
Furthermore, this Monster article accurately describes why more and more companies are outsourcing their temporary employment programs. Some of the most common reasons we've seen include:
- Temporary labor is a permanent corporate strategy
- Client expectations continue to rise as VMS and MSP capabilities evolve and become more sophisticated
- Clients prefer Statement of Work (SOW) service for well-defined projects
- Contingent labor enables the organization to instantly tap into the market for quality or specialty labor
Tips to Self-Manage Contingent Labor
At the end of the day, someone in your organization is responsible (or will be) for temporary staffing. What was never a relaxed process is now becoming even more of a test due the rise of temporary labor. Highly regarded as the “new norm,” many organizations will need to create visibility and accountability around this unfamiliar process.
This is where managed services comes into play. One of the main reasons to call on a Managed Services Provider (MSP) is to centralize the efforts needed to hire contingent labor. The other primary reason is to reduce the risk associated with temporary staffing. By not having some of these things covered you are risking increased costs, non-compliance with employment laws and damage to your employment brand.
On the occasion where you have the chance to sit down with your leadership team or the decision maker to discuss contingent labor, here is a helpful checklist to ask that will determine whether you can self-manage contingent labor, or if it is a better business decision to outsource this function.
About the Author: Matt Rivera serves as Vice President, Marketing and Communications and is responsible for overseeing all aspects of Yoh’s marketing and brand communications. Matt holds a degree in Journalism/Public Relations and has been working in the staffing industry for more than 25 years. Prior to this role, Matt held many different roles from branch recruiting and proposal writing to technology management and online marketing.