Contingent Workforce Solutions
A contingent workforce consists of freelancers, contractors, vendors, or any other non-employee. This person is typically hired on an on-demand basis and is not on the company’s payroll, as he or she is not a full-time employee. Currently, over 40% of the United States workforce is made up of contingent workers.
A contingent workforce is an important part of any businesses’ everyday needs. According to Contingent Workforce and Services Procurement, a study by Ardent Partners:
- Only 45% of a company’s contingent workforce is actively accounted for.
- 62% of enterprises consider contingent labor as a vital business component.
As companies take on more and more non-employees, the need to organize and maintain this database of workers becomes increasingly important. Therefore, many companies opt to use a contingent workforce solution, which is a technological solution to managing a contingent workforce.
The Importance of a Contingent Workforce Solution
Contingent workers have separate laws that apply to them, so they should be managed in a different way than full-time employees. To help Human Resource departments not to become incredibly overwhelmed, software solutions are implemented to keep track of workers and necessary documentation.
Driving the need for contingent workforce solutions is the risk of misclassification. The IRS and Department of Labor have specific rules about what constitutes a full-time employee versus a contractor. For example, contractors cannot participate in company reward programs or risk misclassification penalties. To avoid fines and paying back taxes, companies can utilize a contingent workforce solution to organize paperwork and maintain contractors as non-employees.
Contingent workforce solutions also help keep track of top talent, so companies that often bring on contractors can easily sift through workers to find an appropriate candidate. Now that companies use freelancers more and more, it’s important to organize these workers by industry, skill sets, and availability. A contingent workforce solution can make the lives of HR managers much easier by giving them access to this information immediately.
Managing Contingent Workers?
Shortlists make it easy to onboard, manage and pay your contingent workforce
How to Choose a Contingent Workforce Solution
With all of the technological options available, companies may find it difficult to select a solution right for them. Businesses should look for solutions that allow them to easily scale while maintaining a high level of organization and internal management. It’s important that contractors and freelancers can use the platform to upload all relevant information with minimal training and direction. Furthermore, when managing such a large group, companies should look for a solution that offers analytical features about their contingent workforce as well.
As companies become more reliant on the contingent workforce, organizing this group will become more difficult, which is why it’s important to invest in a contingent workforce solution now that can support these efforts.