Most contingent workforce management programs progress through recognizable stages of maturity, adding value to their organizations as they mature. But not all programs achieve the higher stages, effectively leaving value on the table.
To move up the maturity curve, it is important to understand how each stage builds on the ones below and what actions you can take to raise your program to a higher level.
The four stages look like this:
- Stage 1, Reactive: External labor is hired department by department with little central oversight. Spend, suppliers, and workers are hard to see, and problems are handled as they arise.
- Stage 2, Managed: A central program governs external labor, typically through a vendor management system (VMS). Costs and risks are controlled, though often for only one or two worker categories.
- Stage 3, Integrated: Every category of external worker across every geography is visible in a single system of record.
- Stage 4, Orchestrated: Every worker type is governed as one workforce, and the organization uses its data to optimize the workforce mix for desired outcomes while minimizing risk.
The sections below describe this progression.
Stage 1 to Stage 2: Moving from “Reactive” to “Managed”
To meet the challenge of controlling the rising cost of contingent talent and to minimize risk, organizations establish contingent workforce programs, moving up the maturity curve from “Reactive” to “Managed.” At this stage, a central program governs external labor, with consistent processes, controlled costs, and reduced risk.
A contingent workforce program provides value to the business the moment it begins to consistently manage external workers. But a “Managed” program delivers its full value only when the program systematically addresses four key challenges, which we call “impact multipliers”:
- Cost control: Transparent governance to prevent staffing from off-contract suppliers, inflated billing rates, sweetheart deals, missed milestones, and project scope creep
- Risk & compliance: Governance to protect organizational and personal data, prevent worker identity fraud, minimize misclassification and tenure limit violations, and ensure compliance with all applicable laws and regulations
- Talent & sourcing: Consistent processes and regulated sourcing channels to source talent with essential skills faster and more cost-effectively in a highly competitive labor market
- Innovation & AI: Structured management and control to be certain that AI agents – the newest addition to the external workforce – are properly governed, sourced, classified, and audited – to mitigate risk without impeding innovation
The longer these multipliers go ungoverned, the more they cost your business. The sooner a program controls them, the more value it delivers. Because their effects are exponential, these impact multipliers must be managed as part of a systematic, extended workforce strategy.
There is a catch: you can’t control these four areas well if you can see only part of your workforce. That is where visibility and integration come in – the next stage of workforce program maturity.
Stage 3: Workforce visibility and integration
Today’s extended workforce spans six categories: contingent workers, statement of work (SOW)-based service providers, consultants, independent contractors, shift-based workers, and, increasingly, AI agents. To operate a strategic external workforce program, the organization needs visibility into every category of external worker – starting with the most basic data: who they are, where they are, what they’re doing, and what access they have to the company’s facilities, networks, data, and intellectual property.
If an organization has visibility into only one workforce category – such as agency-sourced temporary workers – it really doesn’t have control of its workforce. You need visibility and control of all worker types in all geographies with all extended workforce data managed by a single system of record. This system should also capture all relevant data on tenure, costs, and performance both for real-time workforce management and to provide insights for better staffing decisions.
Organizations that have achieved this level of workforce visibility and control have moved up the maturity curve from “Managed” to “Integrated.” With that foundation in place, they are ready to put their data to work.
Stage 4: Workforce orchestration?
“Orchestrated” should be the target state for any strategic contingent workforce management program. Organizations that have complete visibility into their external workforce, with all data in a single system of record, have everything in place to optimize their workforce mix to achieve desired outcomes while minimizing risk.
An “Orchestrated” program is built to face the future with confidence. It forecasts demand and scales any category of contingent talent up or down to meet market challenges and opportunities. Using best-in-class sourcing and management strategies, it optimizes the acquisition process and delivers talent when and where it’s needed most.
The destination is clear. The next question is where your program stands today.
Where should we start?
Assessing the maturity of your contingent workforce program is the necessary first step to improve the effectiveness of your extended workforce. Understanding where you are now allows you to plan how to continue up the path to maturity and deliver better outcomes for your business. The next step depends on your stage:
- If you’re Reactive: Establish a central program and a system to govern external labor, starting with the four impact multipliers.
- If you’re Managed: Extend visibility to every worker category and geography, with all data in a single system of record.
- If you’re Integrated: Use that data to forecast demand, optimize your workforce mix, and govern AI agents like any other worker.
The fastest way to find out where you stand is to compare your program against our Workforce Orchestration Model and identify any gaps. Then contact us for a free consultation. We’ll show you how moving your contingent workforce program up the maturity curve can deliver more value for your organization.
