T he contingent workforce is growing, and with it, challenges and complexity. Enterprises that lack end-to-end workforce visibility into this valuable labor group find themselves inundated with excessive contingent labor spend, along with security and compliance risks, potential misclassification fines, and more.
In the current landscape, contingent labor accounts for approximately 20% of the average enterprise’s total workforce. And for good reason: the non-employee workforce offers enterprises a competitive advantage by reducing cost and risk, providing quick access to highly specialized skillsets, accelerating project timelines, and so on. Therefore, it’s no surprise that more than 80% of large corporations plan to substantially increase their use of contingent labor in the coming years.
Strategically managing this labor group demands visibility into each contingent worker and across the entire workforce, from sourcing and onboarding to offboarding. Yet despite the importance of having clear visibility into the workforce, Ardent Partners estimates that the average organization only maintains visibility into 45% of their overall contingent labor, and nearly 60% of all contingent labor is unaccounted for in financial planning, forecasting and budgeting.
This discrepancy between the importance of workforce visibility and the actual limited view that many program leaders have can lead to serious problems. For example, organizations that lack real-time, comprehensive visibility into their contingent workforce and related spend find it tough to answer simple questions that contribute heavily to the bottom line:
- “What is the composition of your non-employee workforce?”
- “Do these contingent workers have access to your facilities, systems, intellectual property and assets, and will all access be discontinued when they’re terminated?”
- “Are these non-employees properly classified?”
- “Are you paying too much for certain skillsets?”
- “Are you deploying your contingent workforce strategically?”
If you lack the visibility to answer these questions, then you’re greatly minimizing your contingent workforce ROI. When enterprises are spending an estimated $270 billion worldwide on contingent labor annually—a figure predicted to explode over the next decade to a nearly trillion-dollar market—strategic, insightful decision making around your contingent workforce is vital.
The good news is that the right technology can empower you with the deep insight needed to deliver a top-notch contingent workforce management program. A best-in-class vendor management system (VMS) consolidates your contingent workforce data and centralizes the process of managing this valuable workforce. From Procurement and HR to IT and line-of-business hiring managers, everyone has access to the same platform, with customized views based on roles.
A VMS platform gives stakeholders quick access to quality contingent talent, prevents you from spending too much for certain skillsets, provides automated controls for secure onboarding and offboarding, and much more. In this way, you can protect your company from financial and regulatory risk, elevate your workforce decision making, and day-to-day, get the most from your investment in this critical workforce.