Today, we’ll cover a growing challenge for businesses in this era of project-based labor: managing a contingent workforce.
The contingent workforce basically represents resources who do work for a company but are not that company’s employees. They include freelancers, consultants, temporary workers, gig workers, Statement of Work (SOW) workers, and more.
In today’s ultra-competitive labor market, finding the best ways to manage contingent labor is essential to a company’s success. Why? Because businesses need to be agile, adaptable, and able to bring in the right talent at the right time. But it’s not just about getting people in the door; it’s about managing this workforce effectively to maximize their potential while also aligning with the company’s goals.
That’s where things get tricky, and it’s why we’re diving into the world of contingent workforce management.
The Changing Landscape
Did you know that the number of self-employed workers in the United States is projected to reach an astonishing 90.1 million by 2028? (Statista 2023) That’s a significant portion of the workforce that’s not tied to traditional full-time jobs.
Naturally, this shift towards a more contingent workforce is reshaping how businesses approach talent management.
Why Engage in Contingent Labor?
The increase in the contingent talent pool wouldn’t be possible unless businesses were willing to embrace the use of contingent labor as part of their total talent strategy. Which they clearly are: According to a U.S. Government Accountability study, 18 percent of the average organization comprises contingent workers.
But why are companies using more contingent workers than ever before? For starters, it offers flexibility. It’s a strategy to manage workload fluctuations without the overhead of permanent hires. Plus, it’s a way to access specialized skills on a project basis. Think of it as tapping into a diverse talent pool only when you need it, then detaching easily once the project is complete.
Challenges of Managing a Contingent Workforce
Managing a contingent workforce comes with a set of challenges, many of which businesses don’t face with full-time employees:
- Compliance and Legal Issues: Navigating the legal landscape of contract work can be like crossing a minefield. Misclassifying employees as independent contractors can lead to heavy penalties, back tax payments, management distraction, and significant brand damage.
- Integration and Culture Fit: How do you ensure that contingent workers gel with your team and understand your company culture? Finding ways to integrate your company’s ethos into its contingent workforce hiring practices is crucial for maintaining a balanced and productive work environment.
- Quality and Performance Management: Most contingent workers today work remotely. Businesses need to demonstrate the management practices and discipline necessary to ensure the quality of work and manage remote workers’ performance.
- Efficient Management and Tracking: Keeping track of various contingent workers – including their hours, payments, and project timelines – requires robust and modern management systems. Remember, contingent workers aren’t on a company’s payroll, so they’re paid through an invoicing process typically managed by Accounts Payable.
- Onboarding: Just getting contingent labor ready to work can be a challenge, as the process differs dramatically from that of full-time workers and varies depending on the channel through which you engage them.
Prosperix to the Rescue
Enter Prosperix, a game-changer in contingent workforce management. Prosperix offers modern, innovative solutions that streamline the whole contingent workforce recruiting, engagement, and management process. Here’s how:
- Compliance Assurance: We have tools that help ensure you’re staying on the right side of labor laws, reducing the risk of legal issues.
- Seamless Integration: We facilitate the integration of contingent workers into your existing teams, ensuring a good culture fit and effective collaboration.
- Performance Tracking: With our advanced systems, monitoring the quality and performance of your contingent workforce in real-time is a breeze.
- Streamlined Management: From onboarding to tracking hours and processing payments, we simplify every aspect of the contingent workforce management process.
The Future of Workforce Management
The future of workforce management is all about flexibility, adaptability, and finding the right talent for the right role at the right time. As businesses continue to navigate a rapidly changing economic landscape, managing a contingent workforce effectively will become increasingly important.
With companies like Prosperix leading the way, businesses can leverage the benefits of a contingent workforce while minimizing its challenges and remaining compliant with ever-changing regulations. It’s about creating a win-win situation where businesses can tap into top talent as needed, and workers can enjoy the flexibility and variety that come with contingent work.
