The price of keeping your best workforce partners at arm’s length
Adapted from content originally published by Staffing Industry Analysts.
Written by Christie Heintz, PHR is Sr. Director, Workforce Success at People2.0.
Enterprise contingent workforce programs represent serious investments. We’re talking millions of dollars across sophisticated vendor management systems (VMS), managed service providers (MSPs), and programs that touch thousands of workers.
Yet many of these programs fall short of their expected outcomes. And the reason is often the same: enterprises treat their employer of record (EOR) and agent of record (AOR) partners as back-office vendors rather than the operational experts they are.
Most enterprises today rely heavily on independent contractors and contingent workers. That creates complex compliance demands that require specialized expertise. But EOR & AOR partners are routinely left out of the strategic planning conversations where their knowledge would do the most good.
The result is a program built on incomplete information, and someone else is left cleaning up the gaps.
The Gatekeeper Problem
The most damaging version of this plays out as what I call the gatekeeper dynamic. The MSP or enterprise team filters all communication between the EOR/AOR provider and the enterprise client. Nothing flows directly.
What you end up with is an inefficient telephone game. Information gets delayed, context gets lost, and the kind of consultative problem-solving that makes programs work becomes nearly impossible. Issues that could be resolved quickly instead sit in a queue.
People2.0 operates within this ecosystem every day, working alongside MSPs, VMS platforms, and the enterprises they serve across 130+ countries. When we’re brought into conversations early, we can help design programs that actually work. When we’re kept at arm’s length, we’re left reacting to problems that didn’t have to happen.
When Systems Fail without Partner Input
VMS configuration is a good example of where early involvement matters most. When systems are built without input from the providers who will actually use them, gaps appear that no one anticipated.
We see it regularly. VMS platforms that can’t handle overtime calculations correctly, forcing providers to manually manipulate timecards. Sales tax handling that isn’t set up for the jurisdictions where workers are located. Paid time off tracking that doesn’t account for local sick leave requirements.
Each of these becomes a manual workaround. Manual workarounds increase costs. They also create compliance vulnerabilities, because manual processes are where errors happen.
None of this is inevitable. Including your EOR & AOR partners in the technology implementation phase, before configuration decisions are locked in, prevents most of it.
The Continuing Education Gap
System configuration is only part of the picture. The other piece that enterprises consistently underestimate is ongoing education.
Hiring managers are often not well-versed in worker classification requirements. That creates real misclassification risk, and misclassification is one of the most expensive mistakes a contingent workforce program can make. Independent contractors and employees each come with their own regulatory requirements, and those requirements vary by jurisdiction.
An EOR & AOR partner like People2.0 can work alongside the team managing contingent labor to provide that education. Not as a one-time onboarding exercise, but as an ongoing part of the program. Manager turnover is a constant reality. New hires join without institutional knowledge. Quarterly training sessions that keep managers current on classification requirements are a straightforward way to protect the program.
The programs that see the strongest compliance and adoption rates are the ones with robust tools and resources for their users. That infrastructure doesn’t build itself.
What Integration Actually Looks Like
The highest-performing programs we work with have a few things in common.
They maintain dedicated internal teams that specialize in contingent workforce management. Those teams serve as bridges between organizational objectives and the expertise that partners like People2.0 bring to the table. They document clear engagement processes so that every hiring manager knows exactly how to bring on contingent labor, which reduces frustration and improves the contractor experience.
The metrics reflect it. Top-performing programs achieve independent contractor evaluation pass rates of 96% or higher. That’s a strong signal that hiring managers genuinely understand classification requirements and aren’t just guessing. Beyond compliance metrics, the best programs use contractor satisfaction surveys and quarterly business reviews to track time-to-onboard, assignment length, and termination patterns, then use that data to improve continuously.
The Strategic Case
The most forward-thinking enterprises understand that EOR & AOR partners bring expertise that extends well beyond payroll processing. When given strategic access, those partners become force multipliers: contributing to system design, manager education, compliance infrastructure, and program agility.
Many enterprises start by addressing immediate contractor compliance needs and expand from there as programs mature and prove successful. That natural progression works well. It builds trust and demonstrates value incrementally. But it only works if the partnership is treated as a collaboration from the start, not as a vendor relationship to be managed at arm’s length.
The business case is clear. Enterprises that treat workforce partners as strategic collaborators achieve better compliance outcomes, higher contractor satisfaction, and more effective programs overall. The question isn’t whether organizations can afford to bring their EOR & AOR partners to the table. It’s whether they can afford not to.
Ready to stop leaving value on the table? See what’s possible when your workforce partners are truly part of the team.
