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Why Streamlining Contingent Workforce Management Is Critical to Program Success

Amy Bogan | July 3 2023 |

Kees Stroomer

Successfully managing the extended workforce is becoming increasingly complex, and at many companies these complexities are exacerbated by fragmented, undefined ownership. Without a centralized system of record, executives and key stakeholders lack the visibility into the extended workforce need to drive program optimization. But those that invest in streamlining their CWM and centralizing ownership have a lot to gain. In this blog post we’re going to discuss:

  1. Challenges of taking a distributed approach to CWM,
  2. Advantages of streamlining CWM, and
  3. Considerations when transitioning to a centralized approach. 

What are the cons of distributed contingent workforce management?

Distributed program ownership offers a few advantages, such as more budget freedom for each team. But it also poses a variety of significant obstacles, including lack of a centralized repository for all information and data pertaining to the company's contingent workforce. Executive teams might also lack full, comprehensive visibility into the activities of the entirety of the extended workforce. In the absence of visibility into the full extended workforce, organizations can be left open to risk of compliance concerns and unmanaged costs, as well as inconsistent processes and experience for workers.

Additionally, contingent worker experience should be considered in the broader talent strategy to improve participation, engagement and outcomes. Without making that investment, companies could lose out on top, highly skilled talent to competitors, see lower assignment completion rates and even have a negative impact on branding. Recognizing and addressing the experience of contingent talent is also a vital consideration as organizations prioritize diversity, equity, and inclusion (DE&I) across their entire workforce. To sum up, the cons for distributed contingent workforce management include:

  • Increased risk of compliance issues
  • Inconsistent process and experience
  • Lack of visibility into holistic workforce
  • Rogue spend in different departments

Let’s take a look at how a centralized approach to CWM creates strategic advantages when it comes to workforce tracking, integration, experience and more. 

How do organizations benefit from centralizing contingent workforce management?  

Centralized program ownership typically requires establishing a unified coalition between procurement and HR departments, but it’s well worth the effort. Managed strategically, it enables the development of a cohesive program with clear definitions and guidelines, seamless integration into the broader workforce strategy, and a consistent and engaging experience. (Learn more about contingent worker user experience as a competitive advantage in our blog).

Here are some of the key benefits to this centralized approach that I’ve observed in my two-plus decades in the industry:

  • End-to-End Lifecycle Management: By assigning one dedicated team, businesses can much more effectively track, manage, and oversee their entire contingent workforce program. This includes managing any supporting technology systems as well.
  • Seamless Integration: Nesting contingent workforce strategy within the overall workforce strategy enables smoother integration with overall company needs and objectives. This allows companies to respond more effectively to fluctuations in demand, scaling up or down as needed in a more agile, strategic manner.
  • Comprehensive Experience: By considering the total worker experience, not just that of full-time employees, organizations can create an inclusive and supportive environment for all workers, including contingent talent.  (Learn more about how to empower contingent workers within your organization in our DE&I research)
  • Streamlined Communication: Having a single point of contact for all stakeholders within the organization, including managers and executives, enhances communication and facilitates effective collaboration. This simplifies processes and ensures consistent engagement across the organization, helping to align on and reach program goals.

Considerations When Moving to a Holistic CWM Approach  

Moving from a distributed CWM approach to a centralized holistic strategy may seem challenging at first, but the right expertise can help with a smoother transition. First and foremost, program owners should work in close partnership with internal company stakeholders such as IT, Legal, Risk and Finance , and other experts in CWM as needed, to stand up a scalable and compliant program. Partnering with a managed service provider (MSP) will also help manage the contingent worker lifecycle, optimize contingent workforce programs, and improve workforce visibility.

Additionally, utilizing a leading-edge vendor management system (VMS) can drive easier, more comprehensive sourcing and managing of contingent workers and processes. An employer of record (EOR) also helps organizations abide by legal regulations, assumes tax liability, handles payroll and benefits, and more.

In today's competitive labor market and skills economy, the extended workforce is a critical talent pipeline for organizations. By implementing a centralized approach, organizations can optimize the management, integration, and overall experience of their contingent workforce, leading to improved program outcomes and bolstering talent acquisition and retention efforts.

Looking to learn more about how your business can unlock the full potential of your contingent workforce? Download our ebook today. 

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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