Let’s be honest….how well-managed is your contingent workforce… REALLY?

Written by Peter Oreb, CXC Global, CEO

Originally published in ATC Hub News

To answer that question, you need to be able to objectively assess your program, by those metrics that are important to your business: those metrics that triggered you to undertake both the engagement of contract workers, AND the management thereof.

Think about why you implemented a contingent workforce program in the first place. Was it to….

  • reduce your overall talent headcount
  • reduce the cost of your 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 which could apply to your business.

Only by REALLY delving 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 who decide to get their act together and lift their game in the contingent workforce management stakes. They may start to outsource payroll. Establish a PSL for sourcing contractors. Negotiate better sourcing rates. You know…. taking steps in the right direction. But very frequently, they become unstuck. With so many moving parts, it’s hard to keep a handle on contract worker performance, tenure, risk – AND on 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 management buck, 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. Sound good? It is.

How do these two frequently thrown-around acronyms work? Like this:

An MSP is an outsourced partner (like CXC Global) that manages the contingent worker program of an organisation. For the purpose of example, let’s say…. Medibank. The MSP brings deep workforce management expertise to Medibank’s contingent workforce program by overseeing the engagement of quality talent from a range of sources, such as:

  • recruitment suppliers
  • directly sourced contractors
  • in-house talent pools
  • other external talent pools

Based on Medibank’s business needs, the MSP may be directly responsible for all or only some components of the contractor workforce program, of which there are many:

  • vendor engagement & management
  • requisition management
  • vendor rate negotiation
  • timesheeting of contractors
  • compliance management of all vendors
  • consolidated billing

The beauty of the MSP is that it goes above & beyond the day-to-day transactional elements of contractor management. Rather, the MSP is a strategic business partner, providing an agile, responsive, informed and consultative service to help clients like Medibank mitigate risk, improve contractor quality & output, reduce workforce spend, and boost Medibank’s return on contractor investment. The MSP advises Medibank of the best model for their business, given their strategic workforce management prowess.

The MSP does this most effectively when powered by a VMS: cloud-based software that enables the MSP to run the contingent workforce program and all parties to it (such as the recruitment agencies, the hiring managers from Medibank, the contractors themselves). Key functions of a VMS include:

  • contractor requisitions
  • timesheeting
  • expense management
  • reporting

The VMS is securely accessible to Medibank’s hiring managers, recruitment suppliers, and contractors. It enables Medibank to have better insights into the operational efficiency of their contingent workforce, provides deeper, more accurate performance insights of the contingent workforce management program, and it eliminates manual processes. It’s an MSP’s best mate.

Combined, the MSP and VMS is a very 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 program. Other very tangible benefits include:

tree-realtionshipBetter Supplier Relationships:

The MSP works with a host of suppliers, who are party to the contingent workforce. Oftentimes, the MSP will introduce new suppliers to the client, as a means of better managing the program. This is a huge bonus for the client: access to new, proven and trusted suppliers that they may otherwise have never come across.


A photo by Mickey O'neil. unsplash.com/photos/GSzD6vGIWKMRisk Mitigation:

The VMS will track the compliance status of suppliers (and their contract workers) and 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 very real risks which the MSP, backed by the VMS, can assist to avoid.


tree-insightData-Driven Insights:

Trends, performance analyses, workforce opportunities, supplier performance, ROI, rates stablisation – the works. The VMS can deliver these. But this data only gets REALLY powerful, when coupled with the expert analytics of the MSP. The combined power of the MSP and VMS give clients an incredibly powerful position to extract greatest value from both the contingent workforce AND the suppliers.


urban gardening breeding

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 whilst ensuring the client is delivered 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 program.


tree-qualityQuality 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.
Pretty impressive, really. And worth your consideration, in today’s workforce where the use of contract labour, is only growing.

Don’t forget, in some company cultures, this approach of accountability & 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.

If you’d like to discuss how and MSP might work in your business, please give me a shout here.