Choosing a contingent workforce solution can be a daunting task for businesses. With so many options on the market, it can be overwhelming to sift through the various features and capabilities of each solution. And on top of that, it can be difficult to determine which solution will best meet the unique needs of your business. Let’s learn more about the best VMS solutions in the market.
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Half the American workforce is practicing quiet quitting, according to Gallup. But fear not, because a solution is very much within reach.
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Employee misclassification is often unintentional but can cause severe damage to a company’s finances and employer brand. A recent survey conducted by PWC confirms that compliance and regulatory risks pose the biggest threat to a business’s ability to grow.
With more companies relying on contingent workers in the current economy, maintaining compliance is an even more immediate executive imperative. And the changes to legislation that result from every election makes it even more difficult.
Usually, a business’s workforce includes –
Employees – Workers that are part of the company’s payroll; filing and paying certain taxes is the employer’s responsibility. These workers are entitled to additional mandatory benefits and legal employee protection.
Contingent workers – The portion of a workforce composed of freelancers, independent contractors, consultants, and temporary workers. These workers are not a part of the company’s payroll, and their taxation is done independently or by a managed service provider (MSP) or employer of record.
Employee misclassification occurs when a business wrongly classifies an employee as a contingent worker. This is of major concern for federal and state governments since misclassification results in a significant loss of public revenue (e.g., contributions to worker’s compensation and unemployment insurance), deprivation of employee benefits, and violation of employee rights. In turn, businesses face a string of consequences, including –
Misclassification cases are costly and increasingly common. And in most cases, the affected organizations resort to expensive settlements, which are an even greater financial burden.
Here are a few companies that made recent news –
Uber agrees to an $8.4M settlement against a class-action lawsuit with California drivers.
Rover Group to pay $18M to settle worker misclassification litigation.
Instacart to spend $46.5M in a settlement over worker classification.
Universal Logistics agrees to a private settlement with Teamsters Union due to employee misclassification.
As labor boards, tax agencies, and regulators worldwide become more focused on identifying discrepancies with worker classifications, businesses can substantially mitigate, if not prevent, the associated risks of misclassification audits — along with the resulting costs. Organizations realize that understanding and classifying workers can get tricky, even with effective assessment processes. Often workers fall into a grey area, and it is difficult to categorize them correctly.
Managing contingent workers is now a strategic priority for business executives, and the use of compliance services has increased by 20% since 2019. Many companies are no longer self-managing their contingent workers. Instead, they are engaging with workforce solutions partners that specialize in independent contractor compliance to provide them with the necessary research, due diligence, strategies, and centralized management to bring conformity and risk reduction to their enterprise.
With Prosperix, you can always be sure of 100% compliance. Our VMS network helps you consolidate all of your staffing relationships into a single system and tracks the entire candidate lifecycle from talent sourcing through onboarding, contract signing, assignment termination, and redeployment. Since our solution is highly data-driven, we capture and present you with all the information surrounding your contingent workers on a granular level, including details on the nature of their assignments. Working in parallel, our MSP services ensure that you manage your contingent workers in accordance with federal, state, and local laws. We keep your contingent workforce programs safe, secure, and risk-free.
Are you facing compliance issues? Let’s talk.
Understanding contingent workforce management can get confusing. Use our simplified glossary to familiarize yourself with the industry terms.
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Learn trends and tips about optimizing contingent workforce management through technology to increase hiring performance.
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In Prosperix’s latest blog post, we explore the meaning of exponential change in the contingent workforce space and introduce you to a solution capable of delivering 10x impact.
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Use this simple checklist to find the best MSP (managed service provider) for your business’s staffing needs.
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Creating RFPs requires organization, communication, and a clear understanding of how to engage the right suppliers. Here are some tips on when to use – or avoid – RFPs and some best practices.
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An AI-boosted vendor management system (VMS) could be the most efficient way to make the best of today’s difficult staffing situation
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Manually managing your staffing suppliers is tedious, costly, and risky. Experts estimate that relying on these processes doubles the costs of businesses when compared to automated solutions.
While large enterprises with high contingent labor spend typically have a managed service provider (MSP) and a vendor management system (VMS) to govern their processes, those with relatively lower spend often fail to adapt to those same tools.
Many of these smaller companies use manual systems built using spreadsheets, in-house databases, or Sharepoint-like websites to facilitate their vendor management processes. Common reasons they don’t make the transition to an automated system are perceived cost, available technology infrastructure, and fear of change. The result? A number of increased tangible and intangible costs because of missed opportunities and the added expense of their employees’ time and effort.
When you use spreadsheets to manage your suppliers, you sign up for tremendous amounts of tiresome work that yield little information about actual supplier performance. Manual vendor management results in your business partnering with under-performing vendors, overpaying staffing agencies and workers, creating critical compliance issues, and more.
Let’s explore the drawbacks in detail:
When you manually manage the staffing suppliers providing your contingent workers,
it’s nearly impossible to establish standard processes and pricing. Without consolidation across your business, you waste valuable time and still don’t establish spend transparency, diversity tracking, and efficiency. You also lack insight into how your suppliers perform and can’t track department budgets, all which contribute to rogue spend.
With dozens of spreadsheets floating around your emails, vendor data is likely dispersed across multiple channels, making it difficult to track and manage vendor contracts. Since you’re dealing with multiple vendors, the various agreements are likely to have inconsistencies when it comes to terms and rates. This only confuses your team and creates an unpredictable, poor candidate experience among your contingent workers.
Spreadsheets need to be frequently updated and analyzed. And with contingent workforce management involving multiple stakeholders, re-sharing updated excel-sheets across multiple departments is highly inefficient. This ultimately results in errors, wasted effort, and low-quality workforce decisions.
End-to-end contingent workforce management involves a range of activities including:
Using spreadsheets to govern all these tasks and trying to keep up with the seemingly endless changes creates chaos and bogs down your internal teams. Think of all the time spent on grunt work that could be dedicated to strategic business planning and other longer-term activities that will help achieve your business goals.
Using manual spreadsheets to collect data and produce high-quality performance reports is a laborious, time-consuming task. It requires your business to collect and parse data, then create the right formulas to track vendor performance KPIs. Your organization may not have anyone on staff who is able to compile and analyze the necessary data, so hiring that person is an added expense. But even if you do, there is always a risk of human error that can completely skew the results.
Any manual process is unable to offer a dynamic assessment of data to provide you with real-time performance metrics for your vendors. Access to this immediate information is a game-changer for businesses striving for consistency in program performance.
Real-time staffing vendor management allows you to:
Strong performances should be required of your supplier relationships. Engaging with poorly-performing suppliers impacts the overall performance of your contingent workforce programs, resulting in slower hiring timelines and poor candidate quality that doesn’t justify their bill rates. Real-time metrics help you gain control over vendor performance, so you can always be sure that open jobs are being filled by the most qualified suppliers.
Job requisitions perform poorly due to mediocre supplier performances or badly-designed hiring processes. And when you have no live data on the performance of your requisitions, process lags can go uncorrected. Real-time metrics help you pinpoint the reasons why your open jobs aren’t receiving the expected responses and help you institute effective processes to improve program outcomes.
Too many smaller companies (and that can mean those with as much as $25 million in contingent workforce spend) think automated supplier management is out of reach. We believe every company has the right to the latest technology and expert services to help them meet their business goals.
That’s why we developed the only solution on the market that has a networked VMS with an integrated hiring marketplace. Unlike traditional staffing solutions, our platform unites businesses, staffing suppliers, and candidates in a common talent ecosystem, putting end to fragmented processes and providing a universal user experience. Our digital hiring ecosystem helps you manage your staffing suppliers while providing access to a diverse network of talent.
The Prosperix VMS Network automates the management of your entire contingent workforce program, and the Crowdstaffing Hiring Marketplace keeps your hiring pipelines filled with world-class talent.
By partnering with Prosperix, your company can say goodbye to complicated manual processes and benefit from smooth automation using our intelligent AI that matches open positions with the best suppliers in real-time. We connect you with thousands of suppliers that have the ability to fill your jobs now.
Our clients stand as testimony to our capabilities. South Jersey Industries effectively engaged 602 suppliers and achieved a best-in-class contingent hiring experience using our patent-pending VMS network.
Curious to know how intelligent automation can transform your contingent workforce program?
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