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5 Employee Retention Strategies for the Contingent Workforce

Magnit | July 30 2022

Employee retention management is among the highest priorities for CHROs today. But contingent worker retention continues to be underused at many organizations, for reasons that include:

  • Lack of understanding: the phrase itself sounds like a contradiction, so some organizations don’t even consider the approach, ignoring the damaging impact of premature talent loss.
  • Lack of emphasis: Some organizations still view contingent workers as dispensable, overlooking the increasingly strategic role they play and the related value of talent continuity.
  • Lack of resources: Even at organizations that acknowledge the potential of contingent worker retention, they may not have the data, technology or human expertise to properly execute.

Overlooking retention in this area is a mistake, however, as properly executed contingent worker retention strategies can drive a higher ROI on spend and a crucial edge on the competition. According to our exclusive U.S. Labor Market Report, organizations are waiting too long to address retention, with over 50% of workers leaving before their scheduled end-date within the first two months in 2021.

What does contingent worker retention mean?

Managing contingent worker retention means going beyond traditional staffing. That means moving from the transactional, “capture and release” approach to a digitally enabled “attract and engage” approach that is geared to building and capitalizing on individual, information-rich relationships.

Developing more direct, in-depth and persistent relationships with contingent talent requires new data- and AI-driven strategies and processes across the entire contingent worker management lifecycle. If pursued, contingent workforce retention strategies can:

  • Reduce talent acquisition costs
  • Drive better quality-of-hire and faster time-to-fill
  • Reduce onboarding/ramp-up time
  • Increase contingent workforce productivity
  • Improve brand reputation and company culture

5 contingent worker retention strategies to focus on now

How a contingent candidate is identified, reviewed and engaged will have an impact on a worker’s overall experience working for an organization. A positive worker experience improves the odds of redeploying the worker in the organization and determining if a worker will become a brand ambassador.  

Here are five key employee retention strategies to consider implementing across the contingent worker source-to-pay cycle.

1. Provide a positive worker experience from the start

Contingent worker retention management starts early in the sourcing/talent acquisition process with managing the candidate experience.  When sourcing through staffing agencies, organizations can try to manage candidate experience in a limited way through supplier selection, supplier relationship management and ongoing communications.

Increasingly, organizations are turning to direct sourcing as an alternative sourcing channel and a way to avoid staffing supplier mark-ups. But it may also be the best way to take control of the candidate experience and the full scope of candidate data.

Adopting a leading-edge, integrated direct sourcing platform:

  • Provides candidates with a modern user experience (UX) from the first touch of the candidate to the onboarding of a selected candidate.
  • Enables digital recruitment marketing and the use of analytical tools to optimize a job description and pay rates.
  • Tunes messaging to the target candidates, monitors the success of various campaigns, and refines them based on results.
  • Allows candidates to take some control of the process by, for example, creating a candidate profile and receiving AI-based feedback on how well they fit the role.
  • Enables more rapid candidate screening, shortlisting, interviewing and selection, so candidates know where they stand in the process.

2. Ensure engagement with the worker throughout an assignment

Contingent worker retention may be most significantly impacted over the course of a worker’s assignment at an organization. To deliver a positive contingent worker experience requires attention to culture, processes and worker data. 

A work environment which values and is inclusive of contingent workers is foundational. That includes:

  • Understanding and appreciating the worker’s skills and experience and ensuring employees feel that they’re are being paid at market rates across a long term assignment.
  • Clarifying a worker’s motivations and goals (for example, securing full-time employment, career development, enhancing a resume, or learning a new skill).

In terms of process, this means:

  • Offering an onboarding process that introduces the worker into a welcoming, contingent-friendly culture and work-enabling environment (including provisioning of equipment, etc.)
  • Particularly in the first 30 days of an assignment, conducting ongoing communications and temperature checking, including sentiment monitoring, to respond proactively to correct alignment issues and prevent early employee turnover.

3. Provide perks and services tailored to contingent workers

Contingent workers generally do not receive the perks or services enjoyed by permanent workers in an organization. But tailored offers for contingent workers could be introduced to enhance a worker’s experience and thus positively impact contingent worker retention.

These could include:

  • Perks that may be offered to retain employees, such as subsidized dining, gym memberships, etc.
  • Tailored services such as health or business liability insurance
  • Rapid or on-demand pay options
  • Career planning tools (for example, tools that allow workers to assess their skills, potential career paths, etc.)

4. Offer redeployment to new contingent or permanent roles

Organizations have typically not enabled the redeployment of contingent workers into new contingent or permanent employee roles. But contingent worker redeployment can:

  • Have a positive impact on contingent worker experience and in turn contingent worker retention
  • Deliver avoidance of sourcing costs, shorter fill/ramp times and potential cost savings.

Recent data suggests that on average 3% to 4% of contingent workers approaching the completion of their assignments algorithmically match open contingent roles. This pool of workers can include valuable, pre-vetted talent who would otherwise disappear and eventually move on to work for another organization.

By monitoring known assignment end dates and other internal data (such as worker skills, pay/bill rates, locations and manager assessments), specific workers can be identified for other suitable contract or permanent roles in the organization.

5. Support a continuing relationship with a talent community

Since the majority of contingent workers will leave their assignments on schedule, contingent worker retention needs to extend beyond the assignment. One way organizations can do this is by creating a talent community for contingent worker alumni that would allow contingent workers:

  • To stay up to date on new opportunities and news about the company
  • Manage and update their own worker profiles
  • Utilize tools such as skills assessments and discover options for upskilling education

 Strategy Execution: Making It Happen

Thoughtfully deploying contingent worker retention strategies provides a greenfield opportunity for organizations to achieve cost and performance benefits, including:

  • Less costly, faster sourcing of quality contingent workers through an optimized contingent candidate experience
  • Efficient (re)deployment of “known resources” within the organization that know the company’s culture, systems, etc.
  • Increased job satisfaction, productivity and loyalty

Executing these strategies will require developing new processes enabled by:

  • Technology capabilities beyond traditional VMS (direct sourcing, worker relationship management, etc.)
  • Integrated data analytics and AI (total talent intelligence)

A third-party partner that has already invested in all these capabilities and corresponding expertise can make implementation of these strategies fast and cost-effective.

For more insights and strategies on ways to improve worker retention and optimize the worker experience, check out our latest Labor Market Report.

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at

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.

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