C ontingent workforce management (CWM) is all the rage these days. That's evident from much of the industry news we hear regularly:
- The State of Contingent Workforce Management research study found that, over the next three years, the average contingent workforce will grow by nearly 30%
- 62% of enterprises perceive contingent labor as a vital component of their overall workforce
- 37% of companies surveyed stated they are planning to adopt a solution for managing their independent workers over the next 12-16 months
It seems there is no stopping this train. Even companies like LinkedIn are throwing their hats in the ring. Ardent Partners presents a compelling reason for contingent workforce management’s growing importance: By the end of 2017, contingent workers will comprise 45% of the world’s total workforce.
It is obvious that contingent labor is important for most companies, and if this trend continues, companies will need new strategies to attract and manage independent contractors, SOW-based labor, and freelancers. In fact, some experts argue that most organizations are woefully unprepared for what lies ahead.
Is your company ready for the new world of employment?
Imagine managing your external workforce with confidence, knowing that you’re concentrating on the right aspects of your CWM program and following the lead of best-in-class organizations. It is possible, especially if you know exactly what aspects of your contingent workforce management program you need to focus on to get results. Luckily, Ardent Partners research has found five critical areas of focus for a contingent workforce program.
Betting on the Future: Businesses Seek To Expand Their Contingent Workforces
CWM programs will continue to expand. This will take place out of necessity. Consider:
- 70% of organizations plan to grow their external workforce
- 38% of best-in-class organizations have formalized CWM program expansion plans
As the industry continues to evolve and grow, to succeed, organizations will need to be well prepared to drive ultimate value from the use of contract talent. The average contingent workforce program is not equipped to handle the many necessary aspects of contingent workforce management, let alone capture other, newer means of sourcing contract talent.
New Research Helps Program Managers Bring Critical Issues into Focus
While preparing the State of Contingent Workforce Management report, Ardent Partners spoke with numerous organizations. When asked about their program needs and priorities, the responses were enlightening. Respondents indicated that their organizations will focus on the following critical areas in the next 12-24 months:
- analytics and business intelligence: 73%
- talent engagement/management: 61%
- spend/supplier management: 57%
- collaboration with procurement and HR: 48%
- compliance management and risk mitigation: 44%
There is definitely a need to zero in on these areas. Here’s why:
- only 51% of external labor and services spend is formally accounted for
- 47% of respondents report a lack of total contingent workforce visibility
- 51% of respondents feel pressure to drive cost savings
- 63% of respondents identified a need for top-tier talent and skillsets
Although this is problematic, it also presents a huge opportunity for improvement. Companies that take the time to investigate the potential holes in their CWM processes increase their chances of business success.
5 Pillars of Focus for a Successful Contingent Workforce Management Program
Do you want to leverage your contingent workforce program to the fullest extent? Here’s where you need to focus your efforts.
- Analytics and business intelligence: Data is a key component of contingent workforce management. Collecting and analyzing data allows you to spot trends and irregularities. It also gives you visibility into spend, suppliers, performance, and more. Best-in-class organizations use real-time reporting, agile analytics, and deep-dive functionalities to manage their contingent workforce. In fact, 37% of best-in-class organizations use analytics and business intelligence tools to make decisions about their future use of contingent labor.
- Talent engagement/management: In most organizations, contingent labor touches multiple areas of the company. That includes IT, finance/accounting, administration, sales, and marketing. Moving forward, success will require new strategies and tactics for managing non-traditional talent. According to the 2014-2015 State of Contingent Workforce Management research study, the “talent” focus of CWM will increase over the next two years.
- Spend/supplier management: Eliminating rogue spend is just one way to realize cost savings. The bottom line is that a fragmented model will not cut the mustard. Organizations should seek to increase their effectiveness. Gaining control of your suppliers is the first step to sourcing the best contract talent at the best rates.
- Collaboration (HR, Procurement, etc.): Organizations that want to remain competitive will need to get all of their business functions operating cohesively. For example, HR and Procurement will need to work together to manage your extended workforce program.
- Compliance management and risk mitigation: Mitigating and managing risk are primary concerns when dealing with an extended labor force. To manage the inherent risks of a contingent labor force, organizations will need to address any shortcomings in existing internal processes and systems.
New strategies for a new workforce
As non-traditional forms of talent continue to grow in importance, organizations will need new strategies to attract and manage independent contractors, SOW-based labor, and freelancers. For some companies, that will mean implementing a new solution for managing their independent workers. For others, it may mean closing the gaps in their CWM program.
Now that you know what to focus on, it is time to take action. Start by identifying at least one of the five pillars above that your organization can focus on to improve its CWM program today.
How is your organization preparing for the future of contingent workforce management? Join the conversation by tweeting us @BeelineVMS