Optimizing One of This Century’s Best Business Strategies: Contingent Workforce Management (CWM)
Over the last several years, leveraging a non-employee workforce as a driver of corporate value has emerged as a new standard. With the potential for significant cost reduction and increased program visibility, more companies are beginning to optimize their temporary labor practices.
CareerBuilder’s annual jobs forecast found that 42 percent of employers are planning to hire temporary or contract workers in 2014. Initial findings from the Staffing Industry Analysts’ 2014 Staffing Buyers Survey, released on April 25th, also found that 42 percent of organizations will increase their usage of temporary workers over the next 10 years while 37 percent expected to keep their usage the same. For SOW and project-based workers, 57 percent of organizations surveyed expected to increase their usage and 27 percent expected to remain the same.
According to a recent study by Ardent Partners, 62 percent of organizations cited contingent labor as a “vital component to achieving their primary goals and objectives” in 2014. In the coming years, Contingent Workforce Management (CWM) will revolutionize labor practices worldwide as the recognized value of a blended workforce increases and the desire for cost reduction remains a top priority for businesses across the globe.
Executives surveyed in Ardent Partners’ research identified a need for the implementation of new processes to increase program visibility, better mitigate risk and reduce overhead costs. With rapidly changing legislation, the evolution of business strategy, and new information available on the benefits of utilizing a contingent workforce, more organizations are evaluating their current practices to ensure effective and efficient management programs.
The State of Contingent Workforce Management 2014: A Framework for Success discusses the trends, value, and best practices of CWM. The highlights of this report have been summarized below.
The Three Layers of a Non-Employee Workforce
Managing contingent labor is one of the most “complex supply components the modern organization will leverage, manage and utilize,” according to Ardent Partners’ study. To ensure business and labor management success, organizations must first understand the three layers of the non-employee workforce and their individual intricacies.
These three categories are referred to as Traditional Temporary Labor, Complex Contingent Labor and Independent Contractors. Each type of contract talent comes with its own set of challenges, solutions and best practices, which are discussed in detail throughout Chapter Two of the report.
Other Trends in Contingent Workforce Management
- Ardent found that temporary labor use will “increase by nearly 30%” over the next three years.
- The pressure to discover, engage and retain top-tier talent will intensify.
- The management needs of the non-employee workforce will require more sophisticated processes.
Why CWM Should be a Top Priority for Every Organization
With the increase in the utilization of temporary labor, the need for greater program management capabilities has also become more prevalent. Ardent’s ‘Best-in-Class’ organizations report “financial, quality, compliance and visibility edges over their peers”.
In fact, these organizations achieved:
- 15-17% higher rates of compliance.
- A 193% advantage over all other organizations in contingent labor accounted for in corporate budgeting, planning and forecasting.
- A 43% higher rate of year-over-year cost savings as a direct result of efficiencies and capabilities within the CWM spectrum.
Through the optimization of their CWM programs, these companies have been able to quantify their return on investment and realize the advantage they have gained over their competitors.
Ardent Partners’ Contingent Workforce Management Framework
The framework outlined in this report points to crucial performance metrics, key capabilities and potential solutions for an optimal CWM program. This framework can be used to gauge your current effectiveness for each type of outsourced labor, help to identify any gaps in your existing program and allow you to build a stronger case for investing in an optimized CWM solution for your organization.
If you have any questions about the evaluation or improvement of your current temporary employee program, please feel free to email the Staff Management | SMX marketing team at firstname.lastname@example.org.