What is the contingent workforce by beelinevms

What is the contingent workforce?

A growing number of companies today have a workforce made up of a combination of employees and non-employee workers. The non-employee portion of this workforce—also known as the contingent workforce, extended workforce, or external workforce—refers to workers who are not permanent or full-time employees of a company. Instead, they work on a temporary or contract basis.

This includes agency-provided temporary workers, freelancers, independent contractors, interns, and consultants. It also includes the employees of outsourced service providers who deliver strategically essential services, such as information technology (IT) project services, and non-strategic services, such as call centers, security, landscaping, and facilities maintenance. These contingent workers constitute a significant portion of the global labor force.

Growth of the extended workforce

According to Ardent Partners/Future of Work Exchange, the non-employee workforce has grown substantially in recent years, from 20% of the total workforce in 2010 to nearly 49% of the total workforce globally in 2023. This trend is driven by skills shortages and the need for organizations to create a flexible workforce that can respond quickly to market challenges and opportunities.

Categorizing the contingent workforce

Most external workers can be grouped into one of the following four categories:

1 | Temporary staffing

This includes short-term assignments with simple, repetitive tasks requiring high supervision. Sub-categories include commercial, office/clerical, and industrial staffing, with a further sub-classification for high-volume, shift-based staffing.

3 | Consulting and professional services

These projects typically involve statement of work (SOW) contracts with fixed pricing based on defined outcomes rather than hours worked. Payments are milestonebased, and workers are known as Consultants or Service Workers, depending on their roles.

2 | Professional staffing

This involves more technical, specialized, or managerial functions, such as IT, engineering, accounting, and legal services. Workers are generally called Contractors and can be engaged directly or through staffing agencies on a Time & Materials (T&M) basis.

4 | Outsourced services

This includes long-term arrangements for both non-core business activities (e.g., call centers, security) and critical processes (e.g., IT, accounting). These contracts are generally driven by service level agreements (SLAs) rather than specific deliverables.

For more definitions of contingent workforce industry terminology, see Staffing Industry Analysts’ Lexicon of Global Workforce-Related Terms.

Why it’s essential to manage contingent labor

As external workforces expand, sourcing and managing contingent talent has become increasingly complex. To control costs, reduce risks, and maximize productivity, most businesses are adopting centralized contingent workforce management programs and automating them using appropriate technology.

According to Staffing Industry Analysts, the most frequently used technology for contingent workforce management is a vendor management system (VMS). VMS platforms are designed to meet the challenges of sourcing and managing contingent talent. A VMS provides the necessary tools to increase workforce visibility, enhance operational efficiency, achieve cost savings, improve worker and supplier quality, and help mitigate risks.

Risks a VMS can help mitigate

Among the contingent workforce risks a VMS can help reduce are those associated with:

• Excessive costs due to maverick spend and sweetheart deals

• Missed project timelines and incomplete deliverables

• Security vulnerabilities and data confidentiality risks

• Compliance issues and internal governance risks

VMS platform capabilities

A VMS provides significant improvements over manual systems and processes, from handling job requisitions and candidate evaluation through onboarding, offboarding, and invoicing to reporting and analytics. Among the values a VMS delivers are:

Enhance visibility and control: Centralizes workforce management for better oversight

Typical VMS benefits

Increased efficiency: Automates processes to streamline operations

1. Enhanced visibility and control: Improves transparency across the workforce

2. Increased efficiency: Automates and streamlines processes

3. Cost control, cost avoidance, and cost savings: Leverages data for better rate negotiation and workforce strategy development

4. Compliance: Helps to ensure proper worker classification and policy enforcement

5. Higher quality: Performance measurement of workers, projects, and suppliers

6. Competitive advantage: Helps businesses stay ahead in the competition for talent

Consistent onboarding/ offboarding: Ensures quick, complete, and compliant transitions

Stakeholder benefits

Managing a contingent workforce with a VMS offers benefits for stakeholders throughout the organization, including:

• Hiring managers: Quality assurance and quicker time to fill positions

• Human resources: Policy compliance and efficiency

• Procurement: Spend management expertise and operational efficiency

• Finance: Consolidated invoicing and real-time reporting

• Legal/audit: Policy compliance and operational efficiency

The time to digitally transform your contingent workforce is now

A VMS is no longer a luxury as reliance on contingent talent continues its upward trajectory and managing an external workforce grows more complex. It is now an essential business tool.

With a VMS, companies can position themselves to navigate the challenges of contingent workforce sourcing and management. They can also leverage external talent as a strategic asset for driving innovation and growth.

In this era of constant change and evolving workforce dynamics, digitally transforming extended workforce management with a VMS is vital to securing a competitive edge and future-proofing your business. Learn how Beeline’s VMS can help you transform how you manage your contingent workforce today.

ABOUT BEELINE

For over 20 years, Beeline has empowered businesses worldwide to achieve competitive advantages with their extended workforce. Beeline Extended Workforce Platform gives companies the visibility to mitigate risks, achieve cost savings, and meet dynamic business needs. With tailored solutions that solely focus on the complexities of the extended workforce, clients leverage Beeline products that fit their unique requirements. Through thousands of integrations, clients can connect their extended workforce data from all technology stacks, including central procurement and HR systems.

Join the list of renowned brands benefiting from Beeline’s deeply seasoned experts, collaborative innovation, and industry-leading partner network. Explore more at beeline.com

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