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With the evolving world of work, how are you optimising your workforce with contingent workers? To answer that question, you need to be able to objectively assess your contingent workforce programme by the metrics that are important to your business — those metrics that triggered you enough to undertake both the engagement and management of contingent workers.
Evaluating your contingent workforce programme
To begin your assessment, think about why you implemented your contingent workforce programme in the first place. What are your reasons behind this? Organisations these days rely on contingent workers due to the following reasons:
- Reduce the overall talent headcount.
- Reduce the cost of the existing contractor population.
- Mitigate the risks of engaging contract workers.
- Implement better processes for engaging and managing contract workers.
There are many other reasons and metrics that could apply to your business. Only by looking into your performance across each measure can you, hand-on-heart, determine how well-managed your contingent workforce is.
We’ve seen a number of organisations decide to get their act together and lift their game in the contingent workforce management stakes. They may start to outsource payroll, establish a preferred supplier list (PSL) for sourcing contracts, and negotiate better sourcing rates. But oftentimes, they become stuck. With so many moving parts, it’s hard to keep a handle on contract worker performance, tenure, risk – and the success of the approach in its entirety.
As it turns out, the most reliable means for ensuring you’re getting the best possible bang for your contractor workforce programme is to be scientific. Stands to reason therefore, that the combined power of a vendor management system (VMS) and a managed service provider (MSP) – fit for the purpose of your workforce & business – is an incredibly reliable and informed approach. Data-driven, even. Sounds good? It is.
How do these two frequently thrown-around acronyms work? Let’s explore that.
What is an MSP?
An MSP is an outsourced partner, like CXC, that manages the contingent worker programme of an organisation. An MSP usually provides deep workforce management expertise to an organisation’s contingent workforce programme by overseeing the engagement of quality talent from a range of sources, such as:
- Recruitment suppliers
- Directly sourced contractors.
- Internal talent pools.
- Other external talent pools
The MSP may be directly responsible for all or only some components of the contractor workforce programme, which include:
- Vendor engagement and management
- Requisition management
- Vendor rate negotiation
- Timesheeting of contractors
- Compliance management for all vendors
- Consolidated billing
The good thing about MSP is that it goes above and beyond the day-to-day transactional elements of contractor management. As a strategic business partner, the MSP provides an agile, responsive, informed, and consultative service to help organisations mitigate risk, improve contractor quality and output, reduce workforce spend, and boost contractor investment. The MSP advises organisations on the best model for their business, given their strategic workforce management prowess.
Benefits of combining MSP and VMS
The MSP model is most effective when powered by a vendor management system (VMS), a cloud-based software that enables the MSP to run the contingent workforce programme and all parties to it, such as the recruitment agencies, the hiring managers, and the contractors themselves). Key functions of a VMS include:
- Contractor requisitions
- Timesheeting
- Expense management
- Reporting
Combining the power of MSP and VMS enables your organisation to establish a centralised workforce management system, which enhances your integrated talent management and engagement approach.
When you use VMS, it is securely accessible to your organisation’s hiring managers, recruitment suppliers, and contractors. It enables your business to have better insights into the operational efficiency of your contingent workforce, provides deeper, more accurate performance insights of your contingent workforce management programme, and it eliminates manual processes — freeing up your time to focus on more important aspects of your business. In short, VMS is an MSP’s best mate.
The combination of MSP and VMS is a powerful, low-risk, high-return approach to contractor management. And it’s an incredibly clever way to stay informed about the performance of your contingent workforce programme. Other tangible benefits of combining MSP and VMS include:
1. Better supplier relationships
The MSP works with a host of suppliers that are parties to the contingent workforce. Oftentimes, the MSP will introduce new suppliers to the client as a means of better managing the programme. This is a huge bonus for the client: Access to new, proven, and trusted suppliers that they may otherwise have never come across.
2. Risk mitigation
The VMS will track the compliance status of suppliers (and their contract workers) as well as directly sourced contractors. While at the same time, the MSP manages the direct relationship with suppliers, protecting the client from any potential risk, such as worker classification and legislative non-compliance: Both are real risks to your business, which the MSP, backed by the VMS, can assist in avoiding.
3. Data-driven insight
Trends, performance analyses, workforce opportunities, supplier performance, ROI, rate stablisation – these data are essential to measuring the success of your contingent workforce programme. The VMS can deliver these. But these data or metrics only get powerful when coupled with the expert analytics of the MSP. The MSP has the extensive experience to evaluate these data and help you achieve visibility of the workforce and make informed business decisions. The combined power of the MSP and VMS give clients an incredibly solid position to extract the greatest value from both the contingent workforce and the suppliers.
4. Cost containment
Keep in mind, the MSP has exceptional visibility of talent supply and rates in their markets. As a result, the MSP is in a great position to negotiate better rates from recruitment suppliers and SOW vendors while ensuring the client is provided a high-quality contractor workforce. Also, with an MSP lead VMS, costs are further reduced as the client can better leverage internal resources and focus on their core business, leaving the MSP to manage the contract workforce programme.
5. Quality talent
With their exceptional expertise, the MSP will know suppliers’ strengths for the different talent needs of the client’s business. Hence, they can channel requisitions to the right supplier, knowing a high-quality contractor will be the outcome.
It’s worth your time and consideration to evaluate your contingent workforce programme as the use of contingent labour continues to grow.
Don’t forget that in some company cultures, this approach to accountability and data-driven decision making can face resistance. You may need to instil behavioural change to get people on board —no easy task. But with so many proof points to leverage, presenting these internally will have the combined MSP/VMS understood and, in time, a higher-performing contract worker population in place.
Optimise your contingent workforce programme with CXC
At CXC, we specialise in empowering businesses like yours to navigate the complexities of workforce management. Our approach is designed to address your unique needs, helping you not only stay ahead of the competition but also achieve sustainable success. With our MSP solution, we can guide you through the process of optimising your contingent workforce programme, streamlining operations, and unlocking new efficiencies.
If you’d like to discuss how an MSP can work for your business and enhance your contingent workforce programme, get in touch with us today.
