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Attracting contingent talent

Contractor Management
Direct Sourcing
CXC Global8 min read
CXC GlobalJune 27, 2024
CXC Global

The growing importance of contingent talent

The contingent workforce management market reached a value of $171.5 billion in 2021 and is projected to soar to $465.2 billion by 2031, showcasing remarkable growth with a compound annual growth rate (CAGR) of 10.5% from 2022 to 2031. This growth underscores the growing preference for flexible, temporary employment options like freelancers, external consultants, and short-term workers.

Companies, motivated by the desire for cost efficiency and workforce adaptability, are increasingly incorporating contingent workers into their operations. This approach leads to reduced overhead costs linked to permanent employment and helps in managing fluctuations in seasonal demands.

According to the McKinsey Global Institute (MGI), 20 to 30 percent of the working-age population in the United States and the EU-15, or up to 162 million individuals, engage in independent work.

This trend is growing as leading companies increasingly turn to contingent workers in uncertain economic conditions. These companies want greater flexibility in their talent investments but at the same time, struggle with talent shortages in specialist skills. The result? Greater competition and difficulty to win over contingent talent.

So, that’s what we’ve covered here: the best strategies to attract quality contingent workers, suited to your business’ needs.

Developing an effective EVP for contingent talent

Understanding contingent workers’ preferences

Engaging contingent talent as part of your workforce mix, is an effective way to address skills gaps, improve labour and hiring costs, and quickly access specialist skills needed in your business.

But you need to take the time to understand their drivers and motivators. Focusing on their unique goals and crafting your value proposition as an employer will allow you to engage and build the right contingent workforce.

The motivators of contingent talent are often not dissimilar to those of permanent staff. You see, contingent work isn’t simply a means to an end for most of these workers; it’s a career-oriented choice. So, understanding their motivations and aligning these with your workforce plan, is key.

From our research, we know that contingent talent:

  • Want to feel valued, respected and recognised
  • Want to feel part of a team, even though their roles are different to permanent workers
  • Value the sense of continuity when permanent workers are being laid off
  • Value the hands-on experience of working with emerging digital tools prevalent in most industries, and having the first-hand experience of working in an organisation as it digitally transforms
  • Isn’t always motivated by a higher hourly rate. Training, support and a pleasant work atmosphere are also in high demand, but not always available for this pool of talent.

We conducted a webinar recently on gaining a competitive edge in contingent talent acquisition. You can watch it here.

Steps to create a compelling EVP

Your Employee Value Proposition (EVP) needs to include a Contractor Value Proposition (CVP) which reflects those factors contingent talent in your industry deems most valuable.

We’ve uncovered three key areas your business can consider, to creating a compelling CVP for contingent talent in your industry. These are:

­Career growth opportunities: Although competitive wages do garner greatest appeal, career growth opportunities are also a major attraction factor. The opportunity to grow sought-after skills and advance career opportunities will enable you to attract quality contingent talent over your talent competitors.

Competitive wages and benefits: Competitive wages are the most direct benefit you can offer contingent workers. Coupled with competitive wages, consider other benefits like voluntary or supplementary benefits (which can reap tax advantages), lifestyle and company wellness benefits, paid leave, and family assistance benefits.

Ensuring a pleasant working atmosphere: A happy, pleasant working environment is a major motivator for contingent talent. This is especially so for younger workers who value workplace rapport, team building and the social side of working, over job security. So, crafting your CVP to include these factors along with benefits like flexible working arrangements and family-friendly policies, will greatly assist your ability to engage the best contingent talent in your industry.

Integrating contingent talent into Total Talent Management

Building a unified Talent Management Strategy

With increasing numbers of organisations planning to hire contingent workers, there’s a growing trend proving valuable for a cohesive, integrated workforce: total talent management. Integrating contingent talent into the company workforce strategy makes increasingly good business sense, as the silos between permanent and temporary staff are dissolved so your business can engage the right talent and the right time, regardless of their classification.

‘Total Talent’ […] refers to the entire scope of human resources of ‘talent’ including employees and non-permanent workers, such as independent contractors, temporary workers, part-time workers, seasonal workers, offshore workers, SoW workers, professional services, outsourced services, and freelancers.

Source: CXC Blog

But integrating contingent talent into your total talent solution is one thing; tracking those workers to ensure your business is optimising them and staying on the right side of compliance laws is another. This is where Vendor Management Software (VMS) offers a vital solution. Being able to track your contingent talent and have full visibility of them, will ensure your total talent management approach is streamlined, compliant and vastly superior.

A VMS will enable your business to:

  • Establish standardised processes, including the channels through which your hiring managers source contingent workers and the rates at which they engage staffing vendors
  • Accurately document contingent workforce data
  • Centralise the management of contingent workers
  • Access valuable reporting on contingent workforce performance, tenure, redeployment and compliance tracking.

Creating a supportive company culture

The process of building a robust total talent management strategy must factor in processes and policies that are inclusive of contingent workers, and beyond that, extend to an inclusive culture that demonstrates that the company values all workers. And of course, inclusion of contingent workers in the broader company workforce strategy must be undertaken in consideration of workplace compliance laws.

Inclusive company policies, factoring in contingent talent, look something like this:

  • Inviting contingent talent participation in company events
  • Offering contingent talent performance reviews
  • Inclusion in team updates and changes
  • Enabling contingent workers to enjoy flexible workplace practices
  • Providing mentorship opportunities to contingent talent
  • Providing access to training and professional development

Complementing your inclusive culture, is to have a centralised management protocol for your contingent workforce. Errors, overpayments and non-compliance are all common outcomes of contingent workers who are managed under a dispersed ownership structure, where different business units take responsibility for the contingent talent in their team. A centralised management approach, via a single team or external partner, allows you to consistently have visibility of these workers, and offers you control over your contingent labour spend, their value, compliance and productivity.

Overcoming common pain points

Lack of visibility of the Contingent Workforce

Although it’s important to have insight into what’s going on inside your extended workforce, many businesses with contingent talent in their ranks, lack the processes and technology to provide accurate reporting and workforce analytics on this cohort.

Identifying the right partner for your business (like CXC) and the right technology (like a VMS) to assist in gathering, analysing and managing this program data and extracting optimal output from it is crucial for shaping a comprehensive workforce planning strategy; one that is inclusive of your contingent talent and that is reflective of a total talent management solution. In addition, attaining industry-specific labour market insights will also allow you to better understand exactly which solutions will provide the best and most important business outcomes for your organisation.

H4: Legislative implications

As the use of contingent labour increases, so does compliance challenges. Governments aim to correctly classify workers for taxation and benefits, while companies must adhere to proper hiring and engagement protocols.

Misclassifying contingent workers can have severe consequences like lawsuits, penalties, financial settlements, and reputational damage. To mitigate compliance risks, contingent workforce program managers must document their adherence to laws, regulations, and company compliance policies. Alternatively, engaging an external specialist with the right technology will provide a truly watertight solution.

Limited internal resources

If you have limited resources across your organisation to manage your contingent workforce, centralising and outsourcing the management of these workers is the ideal solution. This will ensure consistency, efficiency, transparency and cost-savings to your organisation, allowing you to optimise the return on your investment in these workers. A centralised approach using an external partner will also allow you to better track, monitor and manage these workers while maintaining legislative compliance.

Leveraging MSP and Contractor Management Outsourcing

Introduction to MSP and Contractor Management Outsourcing

Leveraging an MSP and Contractor Management Outsourcing (CMO) will allow your organisation to attract and keep (or re-attract) the best contingent workers in your industry. But what are the differences between the two?

Contractor Management Outsourcing

Contractor management outsourcing (CMO) is when an organisation outsources the engagement, payment and management of its contractors to another organisation. CMO providers act as an intermediary between companies and the contractors they engage and manage those workers on the company’s behalf. The result? Reduced costs, simplified engagements, and a more consistent, positive HR experience for contractors.  

Managed Service Provider

A managed service provider (MSP) is a specialist organisation that delivers, manages and optimises business-critical services for another organisation. Traditionally, MSPs provided outsourced IT services to companies without the internal infrastructure or resources to manage this themselves. 

But an MSP is also an effective way for businesses to manage their contingent workforces, allowing them to reduce costs and increase efficiency.

Advantages of utilizing these services

Streamlining recruitment processes

By collaborating with an MSP or CMO, you streamline the management of your entire contractor supply chain through a single point of contact. This simplification eases HR and administrative tasks, allowing you to dedicate more time to your core priorities.

Ensuring compliance

MSPs and CMOs understand the legal and compliance concerns related to temporary workers. By utilising either of these services instead of handling your contingent workforce internally, the risk of issues such as worker misclassification is significantly decreased.


With an MSP or CMO, you can efficiently expand or downsize your workforce as needed. This ensures you always have adequate staff and avoids unnecessary expenses during slower periods.

Cost savings

CMOs and MSPs bring in new vendors and negotiate improved deals with existing ones, leading to potential reductions in your staffing expenses. Additionally, you’ll typically be provided with a single global invoice saving you time and minimising potential complications.

Final thoughts

Businesses at any point in the supply chain can utilise contingent workers to gain a competitive edge. To stand out and appeal to these workers, it’s crucial for companies to distinguish themselves as an employer of choice. Otherwise, they risk losing top contingent professionals to rivals both within and outside their sectors.

Human Resources and operations executives need to dedicate time to grasp the preferences of these workers, implement suitable organisational modifications, and establish a reliable pool of contingent talent to stay ahead in the game.

To discuss the management of your contingent workforce, contact CXC today.

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About CXC

At CXC, we want to help you grow your business with flexible, contingent talent. But we also understand that managing a contingent workforce can be complicated, costly and time-consuming. Through our MSP solution, we can help you to fulfil all of your contingent hiring needs, including temp employees, independent contractors and SOW workers. And if your needs change? No problem. Our flexible solution is designed to scale up and down to match our clients’ requirements.

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