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Should we self manage our own Contingent Labor program?

When deciding to self manage your program, you take on the responsibility of ensuring all temporary staff is not only cost effective but compliant. With an increased workload and growing popularity among businesses in the use of contingent labor, more and more companies are reconsidering their approach to contingent and temporary workers. 

Self managing your contingent workforce (CW) program is really another way of saying you decide to in-source this department and the functions around CW management; including sourcing, hiring, on-boarding, payrolling, compliance standards, and productivity and/or project checks and balances. 

Many companies successfully manage their own CW programs, and it can be a very productive and cost-effective approach that proves to be invaluable to the organization. For other firms, however, there is uncertainty over how to approach CW management, and whether they should keep it in-house or turn to an outside organization.

Making the decision is never as easy call. In one respect, by keeping it in-house, you agree to take all of the tasks that go into managing a mix of contingent labor; all with varying compliance and contract measures. The problem that arises is managers, who are often either unfamiliar or completely new to the process, don't understand the full scope of work required to efficiently manage the program. 

Obviously, you have the other side of the spectrum, where you decide to outsource this function. But, not all contingent workforce programs are created equal, and even some of the best providers can't offer savings if the program isn't the right fit. 


4 Key Areas to Assess Within Your Organization to Determine Whether to Self-Manage or Outsource Contingent Labor MGMT

If you are struggling with whether to keep your CW program in-house or shop it around, consider not every company is ready to for a Managed Staffing Program (MSP). Before even making the case for contingent labor management, you need to assess four key areas within your organization. 


Look at the structure of your organization

  • How confident are you that you know at least 95% of all staffing providers that are sourcing talent into your organization?
  • Is there a single repository of these known staffing providers and a recommended way in which they should be engaged?
  • Are there consistent and single contacts within each staffing provider or is each and every hiring manager dealing with their own contact person in their geography?
  • How robust is your reporting over the use of the network of staffing partners that you are working with?
  • Is there consistent and historical pay rate information for similar skills that is accurate and accessible?
  • Is anyone assigned the responsibility for improving the way in which contracted labor is brought into the organization?


Understand who is currently responsible and who should be

If there is a fair degree of oversight and control, the next question is to determine what employee or employees currently are responsible. Responsibility may rest within the functional area where the majority of contracted labor is sourced (such as the IT department, for instance), with one or more employees in human resources, or with one or more employees in your procurement department. Once identified you must decide if it is in the best interest of the company for these employees to invest the effort in managing this process.

  • Do you want a person in a functional department whose main job is to maintain oversight and control over quality and cost issues related to the use of contracted labor?
  • Do you have a firm grasp over all of the processes and players involved in the use of contingent labor?
  • Have all of the steps involved in managing a program, selection of vendors and contract negotiations, on-boarding , off-boarding etc. been defined?
  • Have cross departmental competing priorities been reconciled?
  • Do you know how many people it takes (or should take) to manage the full scope of the program and how will you manage all of them effectively?

Honest examination and answers to these questions will help you identify whether or not a self-managed program will work for your company.


Do you have a culture that is open to partnership? 

For a managed staffing program to be successful, the selected partner must serve to reflect and propagate your culture. They must be given access to hiring managers where demand is most prevalent, and be allowed to develop relationships with these hiring managers that will allow the partner to intimately understand not just the specifics of talent demand, but the nuance of what differentiates that demand. If your company does not have the willingness to sincerely hand over this sort of access and involvement, then a managed program is unlikely to match your needs. If, on the other hand, you are eager to gain outside perspective over how talent demand should be met and how staffing providers should be engaged, an outsourced partner approach may be worth considering.

Do you understand the consequences of self management?

It is extremely important to understand that if a conscious decision is not made to either outsource or in-source the management of the staffing program inevitably the company will slowly create an internal management process that is, in effect, acting as a self managed program. As this informal program develops, it becomes extremely difficult to do two things.

  1. Make investments into the improvement over embedded managed staffing processes
  2. Make a decision in the future to change course and employ a managed staffing partner.

What we mean here is that if an informal program is allowed to develop it may do so in a reactionary mode that is not ordered towards advancing the talent acquisition strategies of the organization. Therefore, processes will be stretched to their limit, data collection will be tangled and reporting duplicative and inconsistent. Changing any or all of this will ultimately become a very difficult project. Selecting to completely change course will also become a more painful decision because the informal group will have grown in size and the decision becomes more than a process decision it becomes a personnel decision.

Self managed programs can be very successful; the key is to determine whether or not they fit your strategic direction and your operational approach. We would recommend and encourage you to engage potential managed staffing service providers even if you feel as though you are leaning towards a self-managed program. Be transparent in your inquires and you will find that they will offer you valuable perspective that will help you make the right decision for your company.

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