3 Factors to Improve and Measure Contingent Workforce Quality

Contingent workforce quality: it’s one of the major factors driving leadership teams, business owners, hiring managers and HRDs in today’s skills-competitive market. And it’s overwhelmingly the major selection-criteria for organisations looking to source contingent talent.

If you’ve met anyone on my team, or read any of our content on this blog, you’ll be familiar with the strategic approach we, at CXC, take in the management of our clients’ contingent workers. It’s an approach Staffing Industry Analysts lay claim as a must-do: the four pillars of a successful Contingent Workforce Management Program. These four pillars are:

  1. Quality (of the contingent workers in your organisation)
  2. Cost (of the workers, their output, the overall Contingent Workforce Management program, the ROI)
  3. Efficiency (how quickly and effectively your contingent workers are in-and-out of your organisation)
  4. Risk (mitigating all legislative, statutory, IP and business risks that can be associated with taking on contingent workers).

The four pillars, which have become an industry standard, are a proven model for ensuring contingent workers are managed in a strategic, high-ROI framework: a collaborative, no-fuss, 100% focused approach.

And of the four pillars, the first – Contingent Workforce Quality – is arguably the most critical. Sure, none of these pillars works in isolation, and they’re certainly not undertaken in a purely linear format. However, like all strategic management programs, the foundations need to be set right in the early stages if they are to succeed. And if your contingent workforce management program contains low-quality talent or – even worse – talent you’ve merely placed to fill a void, it won’t succeed.

It’s that simple.

What’s not so simple, is having a system in place to ensure you can acquire a stream of high-quality contingent talent into your business, consistently and repeatedly.

Consider this the cornerstone of your contingent workforce program.

In our experience, there are three main factors that will ensure your worker quality is up to scratch. I’ve outlined each of these below:

FACTOR ONE: Your Talent Source

Talent Suppliers:

Most organisations with an MSP, work with a number of talent suppliers. And the best way to ensure quality talent is to engage quality vendors into your program.

There are a number of measures you can deploy to determine the quality of contingent talent from your talent suppliers. Here are a few:

  • Are you suppliers prolific with sending you talent recommendations, rather than adopting a rigorous screening process? In this instance, they’re relying on YOU to screen for quality, rather than ONLY sending you quality talent to interview. It’s a waste of your time and I’d be seriously considering the value of suppliers who conduct business in this way. They’re not doing the heavy-lifting they’re paid to do
  • Look at disengagements from each of your talent suppliers. If the conversion to FTE is healthy (and in-line with your goals), or disengagements are positive, you’re clearly acquiring quality contingent talent. If disengagements are consistently negative from a given supplier, it’s worth placing greater scrutiny on their candidates, processes and KPIs
  • Do your suppliers have adequate measures across contingent workers who had negative disengagements? Are they ensuring you don’t re-engage these workers? Are there checks in place? If not, you need to address your quality control measures

An important point to note here as well is this: the quality of the requisition will directly correlate to the quality of the contingent talent you engage. Make sure your managers are acutely aware of (and adequately trained in) the specifics of raising a quality contingent worker requisition.

Talent Pool:

We talked about this issue on the blog recently, with respect to sourcing the skills your business needs. Have a read here.

Taking the time to procure, nurture and organically grow a talent pool of perm and contingent workers, gives you the best option for quality control of hires.

Contingent workers from your talent pool are often previous hires who have proven their value to your business. They’re faster to productivity. And they’re eminently low(er) risk.

Unlike perms­ – the vast majority of whom are passive candidates working full-time – contingent workers are typically ‘on’ in respect of self-marketing. They’re attuned to new opportunities. Even when they’re engaged in a contract, they’re wanting to meet organisations with whom they see future work openings. So… your candidate marketing will be key.

You can also refer to this article for additional strategies to help grow your talent pool, through candidate marketing and other quality sourcing methods.

And don’t forget, a quality pool of contingent talent needs to be segmented, managed and nurtured… like any business relationship. If you offer value, you’re consistent in your communications and engagement approach, and you show candidates respect, you’ll reap significant talent dividends for your business.

FACTOR TWO: HR Analytics

For the purpose of both acquiring and measuring the quality of your contingent talent, there are a number of HR analytics that can help you maintain a consistently high-quality contingent talent profile.

Data is increasingly critical for HR and talent management decision-making. Here are a few of the crucial data points you need to sustain high-level contingent workforce quality:

  • Number of re-engagements: do you repeatedly re-introduce contingent workers back into your business? It’s a great measure of quality talent. Keep this measure in mind, as you harvest your contingent talent data
  • Contract extensions: if you’re experiencing regular extensions on your contingent worker contracts, you’re clearly working the quality score of these hires. Not only do extensions demonstrate a quality contingent worker, but they also save you time, productivity and sourcing costs where projects go beyond anticipated timeframes
  • Rate of contingent talent leaving the business: if the workers in your program choose to leave or are dis-incentivised to return, there may be a number of factors at play. Poor culture fit. Poor fit with management. Or, it may be time for you to reassess your program in its entirety. Turnover of continent workers may indicate a lack of synergy between your offer of contract work and the market’s needs
  • Milestone and project completion: this is a time-based measure, and is particularly important when you’ve armed the project with contingent talent. Time-to-completion – on-time or marginally beyond expectation – signifies quality contingent workers, that were right for the project. Empirical, historical scores are the key for the future planning of contingent talent usage (talent you can cherry-pick from your contingent worker talent pool)
  • Project talent cost: if your contingent workers remained on the project for the duration if there was little contingent worker turnover, minimal absences, and evident talent engagement throughout, these are again, quality measures to lean upon for future project planning
  • Billable hours per contingent worker: productivity and output measured against revenue earned for every contingent worker, will provide a clear understanding of the worker’s value and business impact

FACTOR THREE: Technology

 HR tech is a burgeoning segment in the world of IT and workforce management, and can greatly assist your contingent talent-hiring and quality measures. I’ve outlined two of the major plays in HR tech for managing contingent worker quality, below:

VMS (Vendor Management System)

A VMS is a web-based, typically software-as-a-service (SaaS) application that acts as a mechanism to procure and manage staffing services, with a particular focus on contingent worker placement and management.

VMS functionality typically includes job requisition, order distribution, consolidated billing, and sophisticated reporting capabilities. The analytics from most quality VMS systems offers full visibility of all the performance benchmarks for both your talent suppliers and your contingent talent.

Hence, a VMS has the analytical power to offer better insight and management capability in relation to the quality of your organisation’s contingent talent.

The Talent Cloud: Online Marketplaces

Sure, there’s an abundance of low, low-quality talent available online to do almost any job you can imagine.

But, there’s also a LOT of options for sourcing high-quality, hard-to-find skills. From designers to board directors, the platforms that offer high-end talent are absolutely worth your time and attention for sourcing quality contingent workers. And once you’ve engaged them, if they’re a successful hire, they then become part of your contingent workforce talent pool.

The platforms with senior-level, quality talent include:

Also, check out our recent eBook which covers the best of the talent cloud, here.

So in summary…

The level of contingent workforce quality in your organisation will absolutely play a critical role in the success of your contingent workforce program. Honing your knowledge and applying these recommendations as a starting point will enable you to set a solid foundation for your contingent talent program; and will also allow you to integrate contingent workers as part of your successful workforce strategy. Finally, check out our videos on the four pillars of a successful contingent workforce program: Quality (here), Efficiency (here), Risk (here), and Cost (here).