With 2017 fast approaching, many employers have begun to examine how to remove risk from their balance sheets and realign strategic organizational goals in the coming year. One area ripe for review is a company's contingent labor program.
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Across industries, employers have increased their use of contingent labor significantly. These professional workers now account for approximately 40 percent of the national workforce according to the U.S. Government Accountability Office. As contingent labor programs grow, however, risk and spend can grow along with them. How, then, does an employer proactively improve its contingent workforce management?
The answer is to embrace a partnership with a managed service provider.
Partner with a Managed Service Provider to Improve Contingent Workforce Management in 2017
As employers increasingly turn to contingent labor to obtain specialized skills and drive growth, they may accidentally court undue risk and spend. Consider the following ways a managed service provider partner might help you improve contingent workforce management in 2017:
1. Increased Visibility Across the Supply Chain
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When an employer partners with a managed service provider, one of the strongest benefits is increased visibility across the supply chain. By partnering with a vendor-neutral managed service provider, employers can gain insight into multiple areas of spend and performance that may not have been previously visible.
Using third-party software, such as a vendor management system, coupled with expert consultation and guidance, a managed service provider partner can increase visibility into areas of spend and supplier performance. This allows employers to carefully track value, budgetary alignment, and regulatory compliance, thereby reducing risk.
Many contingent labor programs lack this visibility, and you may be surprised to learn the true state of your contingent workforce management program.
2. Strengthened Regulatory Compliance
Compliance is a critical component of contingent workforce management. Many industries are subject not only to state and federal labor laws, but also to industry-specific credentialing. When hiring managers are responsible for contingent workforce management, the risk of noncompliance increases.
In 2016, 35 states joined the IRS and the Department of Labor in an effort to combat employee misclassification. By partnering with a managed service provider, employers are able to mitigate this risk. As an outside entity, a managed service provide can audit existing processes and documentation against current state, federal, and industry credentialing guidelines to combat the risk associated with noncompliance. These experts can also improve upon current processes that adhere to the best business guidelines, potentially saving an employer from costly audits, fines, penalties, or lawsuits.
3. Reduce Costs Associated With the Engagement and Management of Contingent Labor.
The engagement of contingent labor can be an expensive endeavor for employers. When hiring managers are responsible for this area of contingent workforce management, they often acquire contingent labor by reaching out to a handful of suppliers with whom they maintain relationships. This can lead to exorbitant fees for employers.
In partnership with a managed service provider, employers are able to realize significant cost reductions. When that managed service provider partner is also vendor-neutral, an employer can gain access to thousands of suppliers who compete in a fair and even playing field to offer the best candidates at the best billing rates. Additional capabilities may include negotiated bill rates and staffing forecasting, which can further reduce costs by preventing last-minute crisis rate.
4. Strategic Analytics to Improve Strategic Business Decisions
Central to contingent workforce management is the ability to measure the program's success. Using both small and big data, a managed service provider can often drive more intelligent business decisions. The data a managed service provider supplies can include market-rate intelligence, data on staffing supplier performance, forecasting data, and more. Using strategic analytics, a managed service provider can advise an employer on how to adjust contingent workforce management efforts to better meet strategic goals.
If your organization is seeking a way to improve its contingent workforce management in 2017, consider the benefits a managed service provider partner can bring.
Catherine Hess is the marketing manager for RightSourcing.