Transform the way you manage your growing contingent workforce

By: Christopher Dwyer, Senior Vice President of Research and Managing Director of the Future of Work Exchange

It’s no secret that the external workforce has become a strategic powerhouse of skills, expertise, and innovation. For even the smallest organizations worldwide, reliance on external talent can drive new ideas and products and help businesses thrive and grow.

Ardent Partners and Future of Work Exchange (FOWX) research finds that, in 2024, nearly 50% (49.8%) of the average enterprise’s total talent is considered “non-employee,” a stunning figure that has only risen prominently since The Great Recession of 2008. Today’s external workforce is a beacon of opportunity, enabling businesses with top-tier, flexible talent that can be leveraged in an agile and scalable manner, a factor that, considering the fast-paced and globalized competition that every organization faces, places contingent labor as one of the most critical attributes of modern business today. 

For many organizations, the reality is this: they need more than traditional talent. While the contingent workforce is aligned with something, the hard truth is that more organizations must utilize the proper tools, technology, or processes to manage this growing segment of the global workforce effectively. 

The Core Challenges Businesses Face as They Grow Their Use of Contingent Workers  

According to Ardent and FOWX research, over 70% of all contingent labor in businesses is unaccounted for in corporate planning, budgeting, and forecasting…translating into a mere 30% visibility into the entirety of the average extended workforce. 

Is that a problem? It sure is. 

Disjointed spreadsheets, inbox overload, regulatory oversights, and obscured spending data have hindered organizations' strategic management of their extended workforce. Not to mention the fact that utilization of contingent labor has increased by nearly 250% over the past decade. 

Ardent and FOWX research has long identified a procurement-oriented metric as a significant reason to exert more control and oversight of the extended workforce: for every dollar that is actively and managed, the greater company can reap anywhere between 10% and 20% cost savings from the introduction of efficiencies, automation, and enhanced talent management processes. 

From the HR/human capital side, as well, there are tremendous benefits to centralized extended workforce management: businesses that have had contingent workforce management (CWM) technology in place for over three years report a 70% higher rate of non-employee workers meeting or exceeding pre-defined objectives and goals than those that don’t.  

Many organizations managing external talent are often caught in a challenging position: they know they need better processes, but traditional solutions feel out of reach. Enterprise software has historically been designed for larger businesses that can dedicate resources, functional support, and IT personnel to months-long implementation times. 

For teams managing contingent workers through spreadsheets and manual processes, time and resources are significant barriers to adopting workforce management technology. Without dedicated program staff or extensive budgets, implementing traditional vendor management systems (VMS) may have seemed impractical. 

However, the landscape is changing. Today's organizations don't need to choose between manual processes and complex enterprise solutions. With modern, streamlined technology that's both easy to implement and cost-effective, businesses of any size can now manage their external workforce strategically and efficiently. 

The Move to Strategic Extended Workforce Management (and Why It Matters) 

For organizations in particular verticals (such as utilities, gas, oil, energy, etc.), the utilization of contingent labor falls between 45% and 55% of the total workforce. For others, the average sits near the global stat that Ardent and FOWX have long promoted: 49.8%. 

The deep penetration of extended talent in many organizations is reason enough to double down on optimization. Here are the key benefits of transforming your approach to contingent workforce management: 

• Drive better visibility into overall external talent spend, which, in turn, creates monumental opportunities for cost savings through supplier optimization, supplier consolidation, increased efficiencies, etc. 

• Streamline compliance and reduce risk through automated onboarding and offboarding processes, ensuring consistent documentation and proper system access management. 

• Improve operational efficiency by automating manual processes, from initial requisition to final offboarding. 

• Grow the business through innovation, new ideas, and the overall transformation of talent.  

Eighty-one percent of companies cite workforce flexibility as their top challenge, solidifying the notion that, to thrive and succeed, “talent” must be the average organization’s most vital competitive differentiator.  

To maximize the value and impact of their extended workforce, businesses must revolutionize their talent approaches, enhance workforce management, and leverage technology. 

The VMS Factor: How Companies Achieve Scalability, Flexibility, and Optimization 

For as long as contingent workers have existed, so have VMS solutions. Once incarnated as “eProcurement for staffing suppliers,” VMSs have evolved alongside the extended workforce over the last two decades by transforming the ways businesses attract, engage, hire, and manage their non-employee talent, optimizing procurement and human capital processes and providing a real-time gateway to accurate workforce intelligence. 

While a VMS was once considered only for larger, enterprise-sized organizations with more complex CWM programs, today's VMS solutions are much more reachable for all businesses, even those without gargantuan technology budgets (and resources). 

As VMS technology evolved over the past several years, so have its former barriers for entry: Some VMS companies, like Beeline, now offer easy-to-implement, VMS technology that eschews lengthy implementations and resource-heavy efforts in favor of a solution that is more template-based allowing for quick and easy activation and workforce management. 

What do companies with a growing contingent workforce venture to gain with a VMS?  

• Fewer manual-intensive processes concerning the engagement, hiring, recruitment, and management of external workers. 

• Better visibility into the spend, skillset, and project-based attributes of the extended workforce. 

• Greater control over professional services (“services procurement”) and related types of labor that are often very intricate and spend-heavy, and; 
• Automation of the end-to-end lifecycle of contingent workforce management, which optimizes processes, drives down costs, boosts savings, and enhances both the candidate and hiring manager experiences. 
  

The Future of Extended Workforce Management 

Many rising market leaders are often against a wall when it comes to improving the majority of their organizational functions, citing inertia, lack of resources, lack of budget, etc. These organizations often lack the infrastructure to optimize their contingent workforce, caught between basic staffing solutions and enterprise-level technology that is too complex for their needs. These companies struggle to balance compliance requirements, cost control, and talent quality without dedicated teams or robust technology. At the same time, their extended workforce needs to grow.  

However, times are much different now than a few years ago. The extended workforce knows no bounds and is actively growing in size and prominence for businesses of all sizes. There are three keys for organizations to shape their future and optimize their growing contingent workforce: 

1. Reimagine extended workforce management as a value-added, strategic series of activities with near-limitless benefits for the greater organization, including superior talent quality, increased cost savings, better spend control, and enhanced compliance and risk mitigation. 
2. Evaluate VMS options geared toward the business needs of your growing contingent workforce. A solution like Beeline Professional offers a quick-to-activate VMS tailored for organizations with limited resources. The pre-configured templates, workflows, dashboards, and reports are built on years of industry experience, giving value in only weeks.  
3. Set realistic goals for your external workforce program—visibility or cost savings are often an excellent first step. Start with quick wins that can be achieved in the first few months, then build toward longer-term objectives. Focus on steady progress in talent quality, cost optimization, and process efficiency rather than attempting an overnight transformation. 

To learn more about how you could see results from a VMS fit for your growing CWM needs in as quick as 30 days: 

• Read about Beeline Professional in the latest Ardent Partners Solution Spotlight report 

• Speak to a Beeline expert