One added benefit of building a contingent workforce is their ability to reduce your human resource overhead. This enables businesses to be more agile and focus their resources on key projects and business functions, compared with an entirely permanent workforce. But with contingent workers, there are a set of hidden, often untracked, costs (in various guises) that can escalate if they are not managed.
Contingent workers can deliver significant value to businesses. It enables them to access top talent and skills on demand, meaning businesses can access the talent they need and pay for it only when required. As part of a global talent strategy, the cost-saving potential of the contingent workforce is evident. As well as reducing overall costs, bringing in contingent workers with specialized skills can bring significant productivity gains and expertise that can accelerate project progress. To maximize the opportunities for these workers, it is important to track both the tangible and hidden costs associated with them.
Labor rates are the most visible cost associated with the contingent workforce. However, organizations must also manage increasingly complex billing rates from vendors, which often have many variables. While these costs are visible and stark, a number of more obscure costs are associated with the contingent workforce. To understand the overall cost of a contingent workforce program, you need to consider some of its more complex, less visible elements.
Many organizations have little visibility over their pool of external talent. Some are unable to see how much their business is truly spending on contingent workers and their management.
With these challenges in mind, having a vendor management system (VMS) simplifies your ability to track, visualize, and use all the data generated by your contingent workforce. This will enable your business to stay on top of outgoings. It’s time for employers to take control and get the most out of their external talent pool.
A vendor management system can identify all contingent staff engaged by your organization and help create a plan to achieve complete compliance. It can also identify whether your organization is engaging with your contingent workforce in the most efficient way. Each role carried out by a contractor is reviewed to establish whether there’s a better, more cost-effective way of providing that resource. A VMS helps to create a plan to help you enforce these changes, ensuring business continuity and delivery is maintained at every step. As the nature of the workforce changes, if your business isn’t future-proofed, your organization lags behind your competitors. A VMS can record, track, and govern the use of contractors to ensure that you are taking advantage of these agile resources. To learn more about what a vendor management system can do for your company, download our free guide.