By now, you’re likely aware of the many benefits available to your organisation, from tapping into the talent pool of contingent workers. Benefits such as access to highly specialised skills, reduced talent overheads, improved project efficiencies… and much more.
But one of the potentially significant downsides, is the unintended – even unknown – cost explosion, and risk that can occur, courtesy of your contingent workforce.
You see, if you’re not operating under a strategic management structure when it comes to your contingent workers, it’s most likely your business is engaging (and paying) more contingent workers than you may realise.
And do you know what the really bad part of this scenario is? It’s not the additional cost. It’s the potentially disastrous likelihood that you’re engaging and paying non-compliant workers. They may be misclassified, or they may actually be deemed ‘employees’: all of which could lead the ATO to heavily penalise your business.
And as you well know, nothing is worth that.
So, it’s time to do some contingent workforce accounting. And get full visibility of these workers in your business.
We recommend considering the following factors, when it comes to managing your contingent workers.
You Can’t Manage What You Can’t See
We recently started working with a large Australian corporate, who estimated that 10 percent of their workforce was contingent. Once we completed a workforce audit, we estimated this number was closer to 30 percent.
The problem? There were a few.
- Under-managed workers weren’t on the right pathway for meeting business goals. They were more focused on the goals of the person that engaged/managed them
- Under-performance was a big issue. External workers are notoriously under-managed, and therefore not operating at optimum levels. Especially in organisations that don’t have a central management system or visibility of their contingent workforce
- Security and other workplace breaches were uncovered at an alarming rate
By taking a macro management approach to your contingent workforce, you’ll achieve full workforce visibility, better productivity, and higher performance. Win-win-win.
It’s no secret that Procurement, HR and IT aren’t always in sync, when it comes to the contingent workers of many organisations.
For example, the motivations and KPIs of Procurement can often be misaligned with that of HR. This makes for a complex and challenging scenario, especially when you add external workers to the dynamic. These workers aren’t integral to the business – and they’re unfamiliar with cultural pressures and management priorities.
So, to achieve full visibility and comprehensive management of contingent workers, you need to achieve cross-functional collaboration.
Your key operational lines of business must work cohesively and consistently, when it comes to contingent workers. This includes the involvement of line managers and oversight of the executive.
Contingent Workforce and Your Technology Stack
A contingent workforce management partner (like CXC) will be able to recommend the best technology for your business.
The technology you use to manage your contingent workforce must integrate with your business systems. Unfortunately, in our experience, the concept of a ‘one size fits all’ solution for total talent management, continues to be illusive. From HR Management solutions to Vendor Management systems, the key considerations you need to enable better contingent workforce visibility includes:
- Reporting capabilities. Your VMS must offer timely, accurate and actionable insights about the contingent population of your workforce. Reporting is key to contingent workforce management and visibility
- Workforce tracking capabilities. Most of the leading HRIS platforms will allow you to track worker output, rates of pay, location, contract tenure, reporting lines and more
- Combining the management of your entire workforce population, tracking prospective hires, managing vendors, including transactional HR tasks, can be achieved via digital integration. You can do this via custom-built integrations, an open API (application programming interface) or third-party platforms. Compatibility is the priority here. And collaboration between HR, IT and business leadership.
As you can see, there are many factors associated with keeping your contingent workforce contained, visible and productive. For some of you, this will initially be an enormous task. Recruiting the services of contingent workforce management experts is unequivocally worth the investment. Why? Because you’ll achieve optimum contingent workforce productivity, visibility and ROI sooner, and with greater precision.
If you’d like to discuss how to achieve optimum visibility of your contingent workforce, you can reach me here.