Hard and soft costs – and cost savings
The most visible cost factors associated with the contingent workforce are labor rates, supplier margins, billing rates, shift hours, overtime hours, and payment terms, all of which must be managed to drive cost savings.
Hard, or direct, cost savings can be achieved by identifying overpayment, negotiating supplier discounts, and reducing time accounting and billing errors. Contingent workforce management technology can drive even more direct cost savings by revealing more cost-efficient talent channels – such as direct sourcing – and by ensuring that the most cost-effective labor category (e.g., contingent staffing, independent contractor, or statement of work) is used for each assignment.
Soft, or indirect, cost savings can include reducing time to fill assignments, minimizing steps in candidate screening, review, and approval, accelerating supplier negotiations, and automating the onboarding and offboarding processes. Based on our clients’ experience, substantiated by Forrester Consulting’s Total Economic Impact Report, these indirect savings can amount to millions of dollars per year.
