Contingent labor is rising: According to a McKinsey survey, 70 percent of executives plan on hiring more contingent workers after the pandemic than before. As remote and hybrid workplace plans become mainstream, companies increasingly rely on contingent workers to fulfill their evolving staffing needs. Like homeowners seeking a remodel, many organizations recognize the need to upfit and update their contingent workforce programs.
Some firms have tried to do it all and realize they can only take it so far. Like home improvement, most of us can paint a room a new color. That’s the equivalent of negotiating pricing with your vendors. But if you want to knock down walls, finish a basement to create a home theater and office, or put in a pool and outdoor kitchen, that’s a different level of expertise. And we haven’t even talked about whether all these home improvement projects will provide a return on your investment! After all, nobody wants to spend $100K on home improvement projects if it only raises the home’s market value by $25K.
If HGTV has taught us anything, it is that when you are looking to create something unique, it is best to engage the experts! Regardless of what you may think of shiplap, hiring the “Fixer Upper” team of Chip and Joanna Gaines allows buyers to touch up and redesign the home, optimizing the space available inside and out and do it to code. Ultimately, the projects they take on deliver equity and value to the home buyer.
In redesigning or building your dream contingent labor program, it is wise to engage the experts who have been there and done that. Like on “Fixer Upper” or “Love It or List It” hiring a consulting team specializing in third-party labor delivers specific expertise to build your dream home of a contingent workforce solution.
Put down the hammer and check out these four ways to ensure a smooth and successful start to your contingent labor program:
Bring in the right skill sets and ability.
Many companies have seen contingent workforce programs fail because they did not recognize their lack of contingent labor expertise. The reality is that most HR professionals are educated and tasked with a focus on managing employees – not contingent workers and suppliers. They typically are not trained as negotiators as a procurement specialist may be. And lastly, their experience in technology solutions is limited, especially regarding how they can be used not only within the organization today but also how it is leveraged by hiring managers and suppliers now and in the future.
The reality is contingent labor is managed differently than an employee base. Co-employment risk must be considered, and technology will be critical to crafting a scalable solution that can evolve as an organization grows organically or through acquisition. Having experts in the space will lay the foundation for your organization to design a program that works now and in the future. This becomes their prime responsibility and focus of their efforts – not just another “responsibility as assigned” bullet point on their job description. The new program will be implemented timely, allowing value to be recognized sooner vs. later.
Becoming a “Client of Choice.”
If you don’t have access to the latest data on competitive market rates, your pay strategy may be inconsistent and out of touch — or lack a strategy altogether. Tapping into a centralized, updated, and comprehensive salary database is critical to forming a coherent and cost-effective salary strategy among your contingent and permanent staff. Experts know that it is more than just looking at pay rates but also the bill rates suppliers will charge their clients. They look at factors such as payment terms, size of the supply base, conversion terms and frequency of clients for specific roles, the worksite locations themselves, insurance and indemnification terms, and rules of engagement between suppliers and hiring managers. You can’t pull every cost savings lever at once and expect the supply base to support your organization long-term. Those programs are doomed to struggle. Now more than ever, clients must identify the best way to become a “client of choice” for the supplier community.
Technology is the infrastructure, but not the entire solution.
Having a singular system of record in place for all contingent labor stakeholders – sponsorship and program teams, hiring managers, suppliers, and contingent workers – is crucial to recognize the value in cost containment, compliance, automation, and visibility. Effectively deploying a vendor management system (VMS) is essential for success as the program launches. Contingent workforce consultants will help guide your firm through the selection process, ensuring that the platforms can be configured to your organizational needs today and tomorrow.
But make no mistake about it, technology is the infrastructure, not the solution. The solution relies on a combination of the technology and the contingent workforce program team (internally managed or through an MSP provider) who can analyze the data and leverage other account experiences and relationships to bring insight on how the program can be refined to optimize the supply base and drive compelling value while establishing your organization as a “client of choice.” An outsourced model may be the best path to success if you don’t have that solid internal program team expertise.
Understand the value delivered. . . and LOVE IT!
An HGTV staple, “Love It or List It,” focuses its production on recognizing the value of two different options; (1.) renovating the current home and increasing the value of the property, or (2.) identifying the cost associated with moving into a turnkey dream home. Your contingent workforce program will deliver not only hard dollar savings in the way of lower bill rates and savings strategies, but also soft dollar savings related to invoicing consolidation, audit visibility to ensure rate compliance, and risk mitigation savings against potential penalties for improper worker misclassification. In other words, you not only can get your dream home of a contingent workforce program, but you can have the confidence in knowing it was built to code!
Regardless of your industry or company size, Evaluent brings the subject matter expertise to help you build a dynamic, optimized, and compliant contingent workforce solution. We’ll help deliver a workforce solution that delivers process automation, scalability, and best practices that work for your unique business culture. And if you seek a third party to lead your program, we’ve got you covered with MSP solutions tailored to your organization’s needs and visions!