What is contingent workforce management, and can you handle it at your business?
A contingent workforce can be an excellent way to supplement your existing staff, during busy times, during transitions or other times when you don’t want to hire more full-time staff members but need more employees to handle the workload for a period of time.
TechTarget defines a contingent workforce as, “a labor pool whose members are hired by an organization on an on-demand basis. A contingent workforce consists of freelancers, independent contractors, and consultants who are not on the company’s payroll because they are not full-time employees of the organization. Organizations can hire a contingent worker directly or from a staffing agency. Such workers are usually added on an ad-hoc basis to a company’s workforce and work either onsite or remotely.”
This is one key reason the management of such a team can be a major challenge.
How to handle the challenges of managing a contingent workforce.
Here are some of the top challenges of contingent workforce management to be aware of and how to address them.
Issues can arise when temporary staff or contractors come up against regular employees. In a perfect world, everyone would understand that they were working towards the same goal, but sometimes contingent employees can feel left out of the culture of a business or feel that their work and ideas aren’t valued. It’s important that all business unit management sets the expectation for their employees about collaboration.
Categorization and compensation problems
While most business departments who find themselves in need of contingent workers will work with their organizational HR department to work with a staffing company to provide temporary help, there can still be employee categorization problems and compensation discrepancies.
In one department, the request may be for someone at a specialist level. If so, pay needs to be evaluated and kept consistent across departments. One solution is keeping all contingent employee and independent contractor information in a centralized HR database to allow for comparisons to be made, budgets to be analyzed, and to ensure that there is an oversight in place to help prevent these issues.
One problem that companies encounter when hiring contingent workforces is that don’t often realize their need for staffing until the very last minute. This causes stress for employees, managers, and HR staff as everyone scrambles to make sure that the labor need is covered.
Having good business intelligence is key to helping to manage most workforce challenges. Making sure that HR is analyzing work patterns and that managers are working ahead on project schedules can help to minimize last-minute rushes to hire help.
If contingent employees have a question about payroll or a day off or something else personnel-related, do they ask their immediate supervisor? Do they ask an HR team member? Should they call the staffing company that recruited them?
One of the most important things that contingent employees need to have in place to succeed is structure, which includes a clear understanding of who to bring questions or issues. Some employers utilize a contingent workforce management solution like Shortlist to help manage contingent workforce employees and ensure that communications between departments as well as between HR and staffing agencies are clear.
Bringing on members of a contingent workforce are often vital to the success of your business. Plus, more and more capable and qualified candidates are only interested in working for companies remotely or as part of a contractor or consultant-based agreement.
While it may be necessary and beneficial for your business to hire a contingent workforce at times, there are several contingent workforce management best practices to build into your processes and ensure that things go smoothly, so make sure your business is prepared.