Manage HR Magazine | Tuesday, July 30, 2024
Some common problems with contingent labor management are misclassifying employees, less access to competent candidates and inability to see program expenditures.
FREMONT, CA: After the Great Recession, there have been substantial changes in the workplace. According to estimates from the US Government Accountability Office, as many as 40 percent of American workers are presently categorized as "contingent labor." Across many industries, but particularly in manufacturing, retail, health care, and technology, the use of contingent labor has skyrocketed. Some large corporate organizations claim that up to 30 percent of their procurement cost is allocated to their contingent workforces, according to Deloitte. These programs have the potential to become more sophisticated as they get larger. Thus, managing a contingent workforce gets harder and harder.
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Obstacles to successful contingent workforce management: Companies that use contract laborers frequently struggle to keep their programs under control. Organizations have challenges with contingent labor, including access to top candidates, regulatory problems, and many others. Employers dealing with contingent labor have different rules and techniques than those dealing with traditional talent acquisition, even though both regulations and talent access are challenges.
The following are a few typical issues with contingent workforce management that businesses encounter:
Less access to eligible applicants: Having access to suitable applicants is a major factor in determining how successful a contingent labor program is. Unstructured contingent workforce management frequently results in a lack of connections with suppliers and insufficient access to competent applicants.
This over-reliance may lead to positions remaining unfilled for excessively lengthy periods of time, excessive fees for applicants, or the complete termination of an employer's contingent labor program.
Disjointed handling of the process of contingent labor engagement: Hiring managers in many organizations oversee the engagement process for contingent workers. Because of this, achieving transparency is challenging. This fragmented participation frequently results in expensive expenditures for contingent labor, a lack of clarity regarding who is really working on the site, and challenges with compliance.
Employee misclassification: Many employers have been faced with challenges due to updates to classification criteria. If non-employee labor is misclassified, there may be fines, penalties, and even legal action.
When hiring managers are in charge of managing contingent labor, their organizations are particularly vulnerable to violations by regulatory agencies. It is not appropriate for these hiring managers to be specialists in worker classification. Employers may find themselves with ticking time bombs in their contingent labor programs if there is no expert available to make decisions about worker classification.
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