A contingent workforce is a group of individuals employed by a corporation for a specific amount of time, usually for a project. The contemporary workforce is comprised of a mix of contingent and non-contingent personnel in many, if not most, organizations. Contingent employees accounted for more than half of all jobs in the United States prior to the outbreak. In order to save money, 32 percent of organizations are replacing full-time staff with contingent workers. In order to fulfil business objectives, companies must design, plan, and implement a program that combines their contingent workforce and their overall workforce strategies. There are several challenges to managing this type of workforce; therefore, here are some best practices for addressing them.
Use VMS (Vendor Management System) to your advantage
The majority of senior corporate officers claim to have little understanding of who works for them. According to a new survey by Oxford Economics and Fieldglass, just 40-47 percent of CEOs consider themselves “well-versed” on compliance, contingent worker requirements, tenure, quality of work, headcount, and facility access. This is where VMS comes into play. It’s essentially software that makes managing contingent labor easier. It’s usually cloud-based and provides a plethora of data to your CWM, but it has to be managed either internally or through another management solution. Like any other software platform, it is only as good as the data it gets and the processes and governance that surround it.
Burst the HR/Procurement bubble
As one of the main issues in managing the non-permanent workforce, there has long been a problem with HR and procurement functioning in distinct bubbles. As a result, resource overlap has developed, which could result in reduced efficiencies. While HR KPIs will focus on engagement and retention and procurement KPIs on cost and risk, each function must establish and accept a single aim. This entails breaking down departmental barriers in order to understand what drives people and what goals they must achieve. Understanding both departments’ needs and tying their priorities together motivates them to work toward a single goal: filling skill gaps with high-quality people at the lowest possible cost. Regardless of the labor market sector, they come from. You don’t want any potential employees to fall through the gaps. As a result, collaboration is critical.
Make sure you are conducting business by the book
Working with a foreign workforce can be a legislative nightmare. This claim is especially true if you are a US-based company that hires contingent workers, as this is an issue that you will surely face. Staying on the IRS’s good side, as you undoubtedly already know, is of vital importance. Consequently, you will have to get acquainted with a number of different forms, W-8 series tax forms being most prominent. Understanding W8 is critical if you work with non-payroll workers who are not US citizens, as well as US citizens who live outside of the US. W-8 forms are used by non-US tax residents to confirm their foreign status and collect tax treaty benefits. It’s important to bear in mind that the United States has separate tax treaties with different nations across the world, so withholding amounts for freelancers vary depending on where they live. In this particular case, it is of utmost importance to know the difference between W8ben vs W8eci forms. On the other hand, for tax purposes, individuals must fill out Form W-8 ECI with their country of residence, while foreign firms must fill out the form with their country of incorporation. If the form is being filled out for a different sort of entity, the country where the entity was formed, organized, or governed must be specified.
Centralize your Contingent Workforce Management System
A contingent labor management program should be consolidated in one location to be successful. Forming one centralized source for logging information and providing clear visibility will consolidate your contingent workforce management solutions, preventing uneven hiring and management strategies and allowing for seamless administration of services such as payment, compliance, and performance. Allowing different departments to come up with their own management strategies for the contingent workers is the key issue you want to avoid. This leads to a disjointed approach, inconsistency in payment methods, and tedious administration. As a result, it’s critical that you produce a precise plan that unifies all departments under a single concept.
Final word
To sum it all up, you should consider using management software to effectively manage and monitor your contingent workforce, keep up to date with the latest managerial approaches, ensure proper communication between departments and contingent workforce, provide opportunities for your workforce to learn new skills, and advance in their careers, as well as help make contingent workers feel like part of the team. You can maximize the value your contingent workforce delivers to your firm by employing the correct approach and tools.
