The COVID-19 pandemic accelerated a global shift towards agile workforce solutions, with more companies relying on temporary talent. Staffing Industry Analysts reports that 65% of firms plan to increase their use of contingent workers, highlighting the growing importance of flexible talent in meeting evolving business needs. Simultaneously, more workers are choosing contract and temporary roles for the flexibility and independence they offer.
As businesses grapple with uncertainty, efficient access to top-notch contingent talent is crucial. Managing this talent while controlling costs and risks is equally vital. Many employers have adopted Contingent Workforce Management (CWM) programs to streamline talent acquisition and deployment, enhancing visibility into workforce operations.
Contingent Workforce Management (CWM) is a fully managed service for the acquisition, management, and payrolling of contingent workers. Your CWM provider serves as a strategic partner, ensuring you access top talent, cost efficiency, and process optimization. They collaborate closely with various staffing and recruiting agencies—known as suppliers or vendors—to source contingent talent. CWM plays a significant role in the broader field of workforce management and can be particularly beneficial for large organizations with a substantial contingent workforce.
Used interchangeably, suppliers or vendors are external staffing agencies that partner with the CWM provider. They play a crucial role in the program by providing qualified candidates for the client’s job openings, acting as an extension of the CWM recruitment function.
You may have encountered the term Managed Service Provider (MSP) in your search for a Contingent Workforce Management solution. In practice, CWM and MSP are synonymous, though specific usage varies from one company to another.
MSP is a broad term for managed services, often referring to the outsourced management of a company's contingent workforce. In the realm of IT and technology, an MSP is a company that remotely manages a customer's IT infrastructure and end-user systems. In contrast, CWM specifically focuses on the management of temporary or contingent workers.
A robust CWM program is comprised of:
Recruitment Expertise: CWM providers excel at filling contingent workforce roles, whether it's a few temporary positions or an entire project team. They streamline talent procurement by consolidating the hiring process for contingent workers with standardized systems and processes.
Onboarding: CWM optimizes onboarding with a white-label approach, blending automation and personalized experiences for seamless worker integration.
Vendor Management: A dedicated team and Vendor Management System (VMS) platform efficiently help employers manage their relationships with suppliers.
Compliance Assurance: CWM providers ensure legal compliance by navigating labor laws, classifying workers correctly, overseeing background checks, and maintaining proper documentation for contingent workers.
Payroll Oversight: The CWM provider oversees payroll management, ensuring that contingent workers are paid correctly and in compliance with applicable laws and regulations.
Business Intelligence: CWM provides clients with real-time, detailed reports on contract workers to inform decisions quickly and confidently. These include analytics on workforce utilization, cost savings, and other relevant metrics.
Quality Control: A CWM provider may also be responsible for monitoring the performance and quality of the contingent workforce, ensuring that workers meet the client company's standards and expectations.
What Is a Vendor Management System (VMS), and why is it essential for CWM? A VMS is software designed to streamline processes, enhance visibility and tracking, and deliver overall cost savings. It provides a comprehensive view of your contingent workforce's demand, supply, and performance, enabling employers to forecast and plan for the future. Features of a VMS include:
End User Experience: A VMS offers a user-friendly dashboard with worker details and expenditure insights. It enables online requisitioning with Single Sign-On (SSO), automates notifications and approval routing, and facilitates online candidate submission and review.
Process Optimization: A VMS eliminates paper-based workflows, maintaining a record of approvals with time and date stamps. It also tracks estimated end dates for contingent workers and automates worker notifications. Centralizing the ordering process ensures efficiency.
Compliance, Accuracy, and Transparency: A VMS grants instant access to crucial data, including headcount and spending. It offers on-demand reporting for real-time insights into recruitment performance and spending patterns. Importantly, it ensures stringent compliance and risk mitigation, guarding against legal and regulatory issues.
A CWM program manages a wide range of external labor, including, but not limited to:
Temporary Employees: Temporary workers can include individuals of various skill levels. They are employees who perform services for an organization for a specific duration.
Independent Contractors and Freelancers: Self-employed professionals who work on contract-based projects. They are contingent workers responsible for their income tax payments.
Agency Contractors: Agency contractors are supplied, managed, and compensated by a staffing agency. Fees are paid by the hiring party to the agency following the successful placement of each contractor.
SOW Service Providers: Statement of Work (SOW) workers offer professional services based on a predefined scope of work, often with specific deliverables or milestones outlined in a contract.
Gig Workers: Gig workers encompass a wide range of contingent talent, including freelancers, temporary workers, and consultants. They are often found through online talent platforms and can be compensated hourly or based on task completion.
Interns, Alumni, and Retirees: Interns, alumni, and retirees can be considered contingent workers due to their temporary or project-based roles within organizations.
A CWM program goes above and beyond the management of temporary employees—it is an all-inclusive and highly-strategic approach to sourcing and managing external labor.