7 ways to strike the right balance between employees & contractors

7 ways to strike the right balance between employees & contractors

Table of contents

Choose for the task at hand Page 6

Get the math right Page 7

Understand employment laws Page 8

Use predictive analytics Page 10

Understand your contingent workforce options Page 11

Consider the effects of supplier management

Strive for Total Workforce Optimization Page12

Learn more Page 14

Page 12

7 ways to strike the right balance between employees & contractors | Page 3

Businesses often get more done, more cost-effectively, by leveraging a combination of both employees and contingent workers. Many organizations leave this decision up to managers who often lack the data or ability to make the best decisions. Consider the following research by Staffing Industry Analysts:

How companies/organizations make decisions on worker type

17% Manager makes decision independently

34% Manager follows policies

11%

Support function recommends

16% Decision made by consensus

22% Other method

How can your company take advantage of both employees and contingent workers?

Here are seven considerations to get you started down the right path.

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1

Choose for the task at hand

While there are no hard-and-fast rules, it’s wise to look at all options when you need to staff for a new project or initiative.

Contingent labor is a great way to cut costs and boost workforce agility.

Contingent workers are often better suited for: – Short-term projects – Urgent business needs – Seasonal projects – Hard-to-find skill sets – Statement-of-work (SOW)

Employees can make more sense when: – Specialized training or knowledge of your company culture is imperative – Conflicts of interest or security are major concerns – Valuable or controversial internal resources are involved – Open-ended or long-term

projects arise – Initiatives require complex interdepartmental cooperation

You’ll get the best results by matching your workforce mix to your desired outcome.

2

Get the math right

Leveraging a contingent workforce can benefit your organization in many ways. But if you treat the choice of contingent vs. permanent workers as simple arithmetic, you might overestimate the benefits of one over the other.

It’s not easy to directly compare permanent and temporary labor. Here are just some of the factors that go into the equation: – Supplier markup – Productivity levels – Possible project delays due to unexpected loss of temporary workers – Cost and risk of onboarding and offboarding contractors – Variation in regional rates and by supplier

To weigh all of these factors, you need to be able to go beyond hourly and per-project pay rates. You can do this with a vendor management system (VMS) that enables you to track all contingent workers and provides analytic tools that let you compare all available work models head to head.

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3

Understand employment laws

Misclassifying workers can expose you to significant liability, which far outweighs any cost savings gained in the process of hiring contingent workers. You need to make sure your worker classification lines up with state and federal employment laws. That means you need to stay on top of guidelines provided by the IRS and the Department of Labor (DOL) and outlined in the Fair Labor Standards Act (FLSA).

Clearly, it’s no small task staying familiar with and applying guidelines and regulations handed down by multiple entities. If you’re not already using a VMS, now might be a good time to reconsider.

Best-in-class contingent workforce programs employing a VMS have a total compliance rate of 84%, compared to only 68% for all other organizations.

- 2019 study by Ardent Partners

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4 4

Use predictive analytics

It can be tough to anticipate all of your labor needs. Basics like selecting needed skillsets or titles can get tricky, as your procurement group works to divide up tasks in the most economically advantageous way.

You need to consider different suppliers, regions, and address a host of other issues. This includes everything from who will offer the most competitive rates to where it makes sense to divide up procurement between suppliers, and where it’s more rational to go with one particular partner.

This is where the power of predictive analytics and up-to-date market intelligence comes into play. With this technology and information at hand, you can more easily understand what your organization needs from its contingent workforce, choose the right suppliers, price contracts more competitively, and make sound staffing decisions.

5 5

Understand your contingent workforce options

You want to balance cost, risk, performance, and flexibility when using a contingent workforce. But no contingent hiring model is right for all positions.

Ideally, your total workforce management program weighs the benefits of each type of staffing—including SOW-based workers and direct-hire temps—selecting the right labor model to meet each need.

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6

Consider the effects of supplier management

A contingent workforce doesn’t only change the way your organization works— it can also fundamentally change administrative burdens and costs in your business and partner ecosystem.

To realize the highest savings possible, you need to effectively build and manage supplier relationships. Here again is where a VMS can make a difference. It gives you the means to evaluate your suppliers, and automates all the key tasks around sourcing, implementing, and managing a contingent workforce program.

77

Strive for Total Workforce Optimization

As your non-employee workforce continues to evolve, your organization is likely revisiting the employee vs. contingent worker debate. There’s simply no way to stay competitive without maximizing the cost savings and flexibility that nonemployee workers of all types provide. At the same time, your company will always need loyal, motivated and highly trained employees to hold down the fort a perform mission-critical assignments. Your job is to find the best balance of the two.

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Want to learn more?

Let our team of experts help you understand more about optimizing your employee/contingent worker mix.

Enabling companies to increase profitability, mitigate risk, and attain qualified talent by utilizing the extended workforce, Beeline provides software solutions that enable companies to source and manage their extended workforce. As the world’s largest independent provider of contingent workforce solutions, we have the deepest, most seasoned team of contingent workforce experts in the industry.

To learn more, visit beeline.com.

Š 2020 Beeline 7 ways to strike the right balance between employees & contractors