Building a successful contingent workforce program (CWP)—or contingent workforce management (CWM) strategy—is critical in today’s fiercely competitive talent landscape. Never before have workers been so emphatic about how they want to go forward in their professional lives, creating opportunities for organizations looking to build a more dynamic, blended workforce.
About one-third of workers in the United States, more than 51.5 million workers, are considered contingent workers. Of those contingent workers, 59 percent are independent contractors. These numbers emphasize the ongoing and significant rise in non-traditional work models. Understanding the motivations of those who make up this workforce can help when developing your staffing strategy.
What is a Contingent Workforce Program? (CWP & CWM Defined)
A contingent workforce program (CWP) is the formalized, strategic system an organization uses to source, engage, manage, and optimize all non-permanent labor. The goal of effective contingent workforce management (CWM) is to leverage external talent strategically while driving cost savings, ensuring compliance, and mitigating risk.
This program encompasses the entire scope of non-employee talent, including:
- Independent contractors (ICs)
- Freelancers and gig workers
- SOW (Statement of Work) consultants
- Temporary agency workers
Key Benefits of an Optimized Contingent Workforce Program
Implementing a well-designed CWP drives tangible business value and leads to true workforce optimization.
- Risk Mitigation & Compliance: The program minimizes exposure to costly penalties by providing centralized control over complex issues like worker misclassification, global tax regulations, and co-employment liability.
- Cost Savings & Control: A formalized program ensures competitive rates and eliminates the financial risk associated with improper worker classification, helping you efficiently manage and control non-employee spend.
- Workforce Visibility: Centralized management enables deeper insight into contingent worker spend, performance, and tenure across all departments, giving you the data needed for strategic decision-making.
- Agility & Flexibility: A CWP allows you to quickly scale your talent up or down in response to fluctuating business demands, positioning your organization for innovation and competitiveness.
- Talent Quality: Strategic management and a focus on the contingent worker experience help you attract and retain the most in-demand, specialized talent.
4 Steps to Building Your Winning CWP Strategy
1. Give top talent the experience and benefits they seek
Workplace and schedule flexibility are expected. Competitive pay, of course, is imperative. Beyond those basics, you must clearly show what sets your organization apart from others and why your independent worker experience excels. All employees, contingent and otherwise, want to feel they belong.
Make sure the unique value proposition you communicate to candidates is tailored to their needs and preferences. Importantly, job seekers are looking for a diverse workforce, and 76% of prospective employees say an inclusive workplace is an essential factor when considering a position.
The Great Resignation showed that talent is open to multiple work arrangements and may prefer achieving income security through various engagements over a single, full-time job. Recognize and cater to this preference.
2. Embrace opportunities for a global workforce
Remote work removes location as an eligibility factor and ushers in a global talent pool. A company can source candidates from multiple countries, which is essential to filling open positions when everyone is competing for the same talent.
When managing your global workforce, it’s critical to find a partner that understands pay and taxation complexities in the countries you’re sourcing from. As an example, People2.0 has expertise in 130+ countries across the globe, ensuring full compliance with the multitude of pay and tax requirements.
3. Manage risk and compliance
Building a contingent workforce brings with it extra intricacies. Organizations must be prepared to address challenges such as worker classification, global payroll, and tax regulations. Experts will tell you that compliance is the biggest challenge, and the complexities only grow as your workforce becomes more global. As an example, a misclassification penalty can be a costly hit to both budget and reputation.
Bringing in an employer of record (EOR) or agent of record (AOR) is an efficient way to hand off employment classification compliance and payroll processing. EOR and AOR services can significantly ease the heartburn about compliance risks as your organization expands.
4. Adopt technology to grow and recruit at scale
Recruiters who embrace technology and provide candidates with a smooth, seamless experience can easily go from filling dozens of roles using traditional methods to hundreds of roles with a tech-first approach.
In the broader industry, technology is often centered around a vendor management system (VMS) and a managed service provider (MSP) for centralized oversight. Our focus builds on this foundation by providing cutting-edge talent platforms that leverage AI-driven sourcing and a user-centric experience.
AI-driven sourcing and qualifying of candidates makes recruitment faster and more efficient, and is the first step to being able to scale up the hiring process. Talent platforms, where everything from sourcing to payments is handled on a single platform, build efficiency and ease with tools like mobile apps for workers to manage their schedules and get payroll information whenever they want.
Build What’s Right for You With an Eye Toward Growth
All the opportunities that have come about through changes in the last few years—global recruitment because of remote work, employees with skills that span multiple industries, a growing pool of workers seeking flexibility—are good for business. The complexities and risks shouldn’t be ignored, but EOR and AOR services can help ease the strain that may come with payroll, benefits, and employee classification needs as an organization’s independent workforce evolves.
Ready to streamline your workforce solutions?
Connect with our experts to learn how People2.0’s EOR and AOR services can optimize your operations and ensure compliance across any market.Contact People2.0 today to learn more.
