Need for an effective Contingent Workforce Management
The contingent workforce, which includes contractors, freelancers, part-time employees, etc., is a significant part of an integrated workforce strategy. The advantages that come along with such a workforce are: cost savings, flexibility, and increased productivity. The US Government Accountability Office estimates that 40% of the US workforce is made up of contingent workers and it is expected to grow to 50% by 2020. This makes the management of HR processes for such workforce even more crucial.
It is observed that there are certain differences in the HR processes for the contingent workforce compared to the full time or permanent employees. Let’s consider hiring, the responsibility for hiring these contingent workers often rests with the project leaders or hiring managers. Companies head to staffing partners to help them with the recruitment of the contingent workforce. These employees are then employed through contracts with the staffing agency. Such agencies also assist with the payroll of the contingent workers. The problem with such approach is that it is fragmented and not quite transparent. There are various such challenges associated with managing the HR process of the contingent workforce to list a few:
Most organizations maintain lengthy lists of staffing firms to obtain the talent they need. Also, there is no system in place to manage these staffing agencies and check if the candidates recruited from these firms have had the expected screening tests and background verification. This creates a lack of visibility.
Companies often find it difficult to keep a track of the important documentation of the new hire contingent workers from the staffing agencies. Also, the misclassification of such workers could lead to legal issues and compliance risks. It is estimated that up to 30% of firms are guilty of misclassifying contingent workers.
Contingent workers are not entitled to all kinds of benefits. But the law allows having certain health, pension and stock purchase plan benefits for the contingent workforce. Some staffing agencies try to provide these benefits while most others completely neglect providing benefits to such workforce.
- Employee Engagement
Most of the organizations have an employee engagement program but very few of them include the contingent workforce in such programs.
- Time and attendance
Laws such as Fair Labor Standards Act (FLSA) require the part-time and full-time employees have equal rights in regards to overtime and minimum wage. Often organizations neglect proper management of time-offs, worked hours, in and out timings of the contingent workers which could further result in an improper payroll generation.
The above challenges make it clear that organizations appreciate having contingent workforce onboard, but when it comes to managing the HR processes for such workforce, the responsibility shifts between the staffing partners and organizations, making it dubious and complicated. This makes the presence of an effective contingent workforce management solution all the more significant.
To have an effective contingent workforce, we need to consider following strategies:
- Have a role-plan chalked out, such as which responsibility of the contingent workforce management is with whom.
- Obtain the appropriate access to the contingent workforce data to evaluate and then streamline the HR processes, such as candidate tracking, and employee engagement.
- Defining proper leave and attendance policies for such workforce could reduce the attendance errors, also taking a step ahead, utilizing chatbots for leave requests and worked hours could save administration costs and other resources.
- Proper classification of contingent workforce and process-oriented documentation for the new hires could help avoid compliance complications.
An effective contingent workforce management solution helps to completely leverage an organization’s contingent workforce, reduce the administrative costs and provide the insight needed to make the best decisions.