A Guide to Contractor Management Services

With many talent sourcing services and recruitment platforms available today, what type of workforce management strategy can employers and organisations adopt that would best fit their business goals? Employers who are already working with independent contractors and contingent workers know what they can bring to the table.

Surely, a contingent workforce can be managed in-house. However, HR may find it overwhelming to manage external talents and meet their needs as part of the organisation’s workforce. On the other hand, independent contractors must also adhere to the policies and requirements set by the company. 

Seeking professional advice from an Employer of Record about contractor management solutions is the best approach when it comes to dealing with contractors. 


What is contractor management?

Contractor management is the process of managing external contractors who are employed by an organisation to complete the work, timelines and deliverables they were hired to do. There are third-party services that offer contractor management services such as CXC


Why do organisations need independent contractors? 

Most independent contractors have specialised and in-demand skills

Independent contractors are highly educated and credentialed professionals. Having access to this pool of specialised talents provides a competitive advantage for an organisation. They are highly skilled and experts in their own fields, which can be tapped specifically whenever they are needed over a certain period of time, especially for scaling or expansion. 

Independent contractors are cost-efficient

Independent contractors are not officially part of the permanent workforce. They are not entitled to company benefits because they are their own business entity. Organisations will spend less time on onboarding and they don’t need to train contractors because they are hired for their on-demand skills.

Organisations can build a flexible and on-demand workforce

One of the essential lessons the global pandemic has taught the world of work is to have a flexible workforce that can deliver even in limited situations. The contingent workforce soared during lockdowns. Aside from delivering one-off projects, they already have logistical capabilities such as invoicing and time tracking to perform their business with an organisation.


How can contractor management services help organisations? 

Contractor management solutions paved the way for more advanced tools. In addition, the contract management market will continue to grow due to the adoption of AI-based technologies. According to PricewaterhouseCoopers, organisations can save up to 2% of their annual cost by using contract management. 

It’s a solution to skills gap and talent shortages

There are emerging technologies that require the knowledge of an expert such as cloud computing, cyber security, artificial intelligence and data analytics. A lot of industries now are transforming their systems to be able to adapt to the latest developments in digital technology. Organisations can decide whether they have the resources to reskill their existing workforce or hire new talents who are capable to deliver using the latest tools and technology.

Employers can focus more on growing their business

Working with contractor management services gives employers and managers more focus on other important matters for growing their business. They no longer need to spend a lot of time on operational and administrative tasks such as hiring employees, payroll and compliance.

Manage their international contractors across all locations

CXC has the network and technology to manage international contractors in various locations. Moreover, they have a simplified global payroll that can handle multiple currencies. Our team is equipped to comply with the ever-changing labour policies and requirements in different countries and territories.


How to avoid the risks involved when working with independent contractors?

There are also risks involved when working with independent contractors such as worker misclassification, intellectual property and co-employment issues among others. Here are three ways to mitigate risks with independent contractors:

  • Review employment contracts thoroughly

    Misclassification is a complex risk because it involves a clear definition of the employee-worker relationship and terms of service. The guidelines for independent contractors vary in every country. 
  • Independent contractors must not have the same tasks as permanent employees

    Independent contractors are typically hired for their specific skill sets to work on separate tasks that can’t be handled by existing employees. If authorities found out that contractors are working similar obligations in the same office and using the same facilities, employers might be questioned which could fall under worker misclassification.



CXC is a global HR outsourcing organisation with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks. 

Contact CXC today to start enabling your future workforce.