Challenges in Managing Contingent Workers and How an EOR Can Help

Managing a contingent workforce has become increasingly complex as enterprises expand their use of flexible talent. Despite having visibility and control through Employer of Record (EOR) arrangements, many organizations still face persistent challenges—particularly around risk and compliance management, workforce integration, and performance oversight.

From inconsistent benefits and engagement gaps to fragmented onboarding processes, the need for a more strategic and integrated approach has never been greater. To meet these demands, businesses are turning to EOR providers that do more than administer—they help elevate the contingent experience and drive long-term workforce value.

Now let’s dive into the challenges organizations are facing in their contingent workforce management arrangements.  

1. Risk and Compliance Management Gaps

Although they have visibility into EOR arrangements, enterprises face ongoing difficulties in maintaining compliance and managing risk across multiple vendors and systems. This is especially true in highly regulated industries like life sciences and financial services, where only a small fraction of organizations report high satisfaction with their compliance management efforts.

2. Lack of a Proactive, Integrated Management Approach

Organizations often lack a cohesive strategy for managing their contingent workforce, which can lead to fragmented oversight and missed opportunities for optimization. This issue can be seen in sectors like manufacturing and high-tech, in which the absence of proactive planning makes it difficult to align contingent talent with business needs. Discover why a streamlined approach is critical to program success.

3. Inconsistent Benefits and HR Policy Application

Contingent workers frequently miss out on access to broader HR policies and benefits programs offered to full-time employees. This disparity not only affects workforce morale and engagement but also limits the ability to create a unified, inclusive worker experience—especially in sectors like financial services, where over 60% report this as a major concern.

4. Operational and Engagement Challenges

Common issues such as inefficient onboarding/offboarding, lack of performance oversight, and unclear professional development paths can negatively impact contingent worker productivity and satisfaction. Without consistent engagement strategies or performance management practices, many organizations struggle to integrate contingent workers into their culture and workflows successfully.

An effective EOR partner can help address these challenges and more by taking on the following responsibilities:

Streamlining Risk and Compliance Management

EOR services help centralize risk and compliance management and ensure that enterprises adhere to local labor laws and regulations, mitigating potential legal risks. With an employer of record managing contingent workers across locations, organizations can simplify the complexity of compliance, reduce vendor fragmentation, and avoid costly non-compliance issues. Leading EOR providers offer a unified platform to ensure full regulatory adherence, providing a single point of accountability for contingent workforce management.

Learn more about the latest changes in workforce legislation in our regulatory newsletter.

Establishing Proactive and Integrated Workforce Management

EORs take a proactive approach by providing integrated workforce management strategies that align contingent workers with business goals. In offering strategic workforce planning, an EOR partner ensures that businesses have visibility into workforce performance, talent gaps, and future needs. With a transformative EOR, enterprises can take a more structured, data-driven approach to managing contingent workers, ensuring alignment, engagement, and long-term workforce success.

Providing Consistent Benefits and HR Policy Application

An EOR ensures that contingent workers of all types are receiving consistent benefits and are considered in the organization’s broader HR policies. By offering standardized benefits packages and aligning the policies of full-time employees with those of contingent workers, top-tier providers help create a more positive and consistent experience across the workforce. In addition to the increased satisfaction of contingent workers, institutions that use EOR providers generally see improved retention and engagement across their workforce.

Setting up Effective Performance Management and Engagement

Companies that provide EOR services also offer structured performance management programs for contingent workers, ensuring that expectations are clear and aligned with organizational goals. They help improve worker engagement by implementing reward and recognition programs and providing clear career development pathways, allowing contingent workers to feel valued and successfully integrated into company culture. Through managing performance effectively, EOR providers also support better alignment and enhanced productivity across the workforce.

A results-driven EOR partner enables businesses to overcome key challenges in contingent workforce management by streamlining compliance, benefits, performance, and integration. In providing a comprehensive, consistent, and efficient approach, world-class EORs ensure that contingent workers are highly engaged, compliant, and fully aligned with organizational goals, driving long-term success for both the workforce and the enterprise.

Interested in learning more? Discover the report.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.