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Best Tactics for Managing a Contingent Workforce

Contingent workers represent temporary employees that include freelancers, contractors, remote workers, and consultants, among others. They are hired by companies on a project-by-project or short-term basis, and come with no necessary responsibilities for providing permanent work in the future.

Most contingent employees are quite experienced and skilled in their fields, and offer lower expenses and requirements for employers. They can be beneficial for your organization in more ways than one, but they will come with a certain level of risk that needs to be managed to ensure successful operations. If you’re considering contingent workers as well, here are some simple management tips that might help:

Connecting Procurement and HR

While trends in the HR world might be constantly changing, one thing is for certain - fostering communication and collaboration among Procurement and HR is essential for achieving a more efficient and successful workforce. This will help to improve access to data, increase visibility, and enhance control, thus enabling you to fill any skill gaps with high-quality employees in a more effective way. Procurement will focus on risks and costs, while HR will prioritize aspects like retention and engagement, allowing both departments to work towards a shared goal of creating the most productive and cost-efficient contingent workforce possible.

Mandating company-wide processes

In an effort to reach success, you will need to create a centralized contingent workforce management program. This will help you to avoid inconsistent management and hiring strategies, while enabling more streamlined administration over compliance, performance, payroll,and other aspects. But the implementation of such a program won’t be possible if you only inform departments of changes and hope for successful adoption. Instead, you will have to construct a detailed plan for bringing all involved departments into a single centralized program.

Using a Vendor Management System

As a business leader, it’s common to lack some insight into the high number of people who work for you. It’s even more common not to be familiar with all the necessary compliance regulations, the responsibilities of contingent workers, their quality of work and tenure, and access to facilities. A Vendor Management System (VMS) will allow you to stay on top of these important aspects and reach higher visibility and efficiency across your contingent workforce program. As long as the VMS tool you’re using is high in quality, it can help to ensure compliance, improve the effectiveness of the program, and deliver significant cost savings.

Understanding the importance of W-8 forms

If you’re operating from the United States, you might have come across W-8 forms. They monitor income that is directed towards non-US citizens, and are essential when managing an international contingent workforce. Although these forms commonly cause confusion, failure to submit them or to fill them out correctly can lead to tax penalties and major legal issues. That is why it’s so important to understand the W-8BEN, W-8ECI, and other W-8 forms. They will enable you to prepare your company better for engaging and managing a contingent workforce. In case you have any issues, working with a global HR outsourcing organization can be of great help in this instance.

Choosing total talent management

Total talent/workforce management is a rising trend that enables organizations to make better, more informed decisions regarding the resources that are needed for completing projects and filling roles. These systems aim to combine contingent workers with full-time employees, thus going beyond the traditional definitions and barriers. A total talent management system will consider all available employees for fulfilling business objectives, and will include detailed assessments of the necessary requirements and resources. It might even help to improve the collaboration between Procurement and HR teams by ensuring a uniform approach to talent acquisition across the company.

Opting for external resources

Managing any contingent workforce will come with certain costs and risks. For that reason, many businesses might decide to outsource their management efforts, either in part or entirely, to third-party agencies that help to identify and mitigate the risks of contingent workforces. Such external resources can prove to be great partners, as they support your talent needs and elevate your workforce program in an effort to enhance the quality and increase the efficiency among your workforce. Partners with dependable VMS tools might also be able to manage common risks and control the expenses that come with a contingent workforce.

Treating contingent workers appropriately

Contingent workers are similar to full-time employees in many ways, such as bringing in necessary knowledge and experience, and contributing to innovation. However, they shouldn’t be treated the same, but rather according to their specific status. Under an important court ruling in California, the company has to clearly classify the employee as a contingent worker, while the organization is forced to prove several different factors under the AB5, like independent occupations, a lack of company control, and work performed outside usual courses. Depending on the specific situation, there may be exceptions to these rules.

Contingent workers are an invaluable aspect of any business, providing organizations with access to top talent at lower risks and costs. And while managing contingent workforces might be a bit more challenging, the advice mentioned above will ensure seamless operations.

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