Contingent workforce solutions: How can they enable success in the new world of work?

Blog post updated 4th of March 2024

Contents

1. What is a contingent workforce solution and why do you need one?
2. 3 key features of a contingent workforce solution & how can they enable success?
3. Contingent workforce best practices & benefits
4. Industry data & expert insights
5. Risks of poor contingent workforce management
6. Diversity, Equity, and Inclusion (DEI) in Contingent Workforce Management
7. How to effectively implement a contingent workforce solution
8. The role of AI, automation, and future innovations
9. To conclude

Now, more than ever companies are turning to external talent for a number of reasons we’ll cover in this blog. However, even before lockdown, demand for external talent was on the rise and many companies were restructuring their workforces to include more contingent workers. According to Deloitte, external talent was already the fastest-growing part of the workforce by 2019 [1] , and it seems that 2020 has accelerated this emerging workforce shift, by shedding light on the pros of external talent and distributed working.

Our recent Future of Work survey also supported this sentiment, with 77% agreeing that after seeing how well remote and distributed working can work, they now plan on updating their workforce policies to be more flexible and contingent. As working with contingent workers becomes more mainstream, and is becoming, for want of a better phrase, the ‘new normal’; the need for contingent workforce solutions has reflected this, and has also increased. So, what exactly is a contingent workforce solution, and how are they helping companies thrive within the working world 2.0? 

What is a contingent workforce solution and why do you need one?

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Contingent talent relates to external employees, for example, freelancers and independent contractors, and contingent labor solutions are platforms that streamline and enable the effective management of these external workers. Take our platform for example, TalentDesk.io, an end-to-end contingent workforce solution that enables companies to manage, pay and collaborate with external workers, all on one system. Companies today are increasingly relying on talent acquisition beyond their full-time permanent employees. A key benefit being that working with freelancers and external talent gives companies greater speed and agility in order to adapt, and as we’ve seen this year, the ability to move with the times is crucial to business success. 

Those of us that already work with freelancers, and contingent talent, know that although there are a plethora of benefits to working with external talent, without a dedicated solution, contingent workforce processes can be time consuming. For example compliant onboarding, going back and forth chasing for project updates, and struggling to arrange payments takes away valuable time from your business and can feel unorganized. This can be the case when you’re just working with a handful of freelancers, but when you are working with external talent more regularly, strategically, or at scale, that’s when things can become overwhelming. 

Working with external talent is typically different to working with internal employees; there are different onboarding and compliance practices, ways of collaborating, and payment processes. All these challenges can mean that managers can actually become less productive, as managing freelancers at scale can really take time away from their role.

For companies to thrive in the new world of work, they are using contingent staffing solutions to harness the power of their external talent and focus their internal efforts back on their business, as opposed to expending unnecessary time and on co-ordinating freelancers. Having a solution in place enables businesses to act with speed in order to meet ever-evolving market needs, make more informed business decisions and facilitate growth through higher levels of productivity.

3 key features of a contingent talent solution & how can it enable success?

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People:

Contingent workforce solutions, such as a freelancer management system, enable companies to onboard external workers with ease, with all documentation stored safely in the cloud. This makes the whole onboarding process smoother, and gets freelancers up and running quicker, thus making for more efficient and productive teams. Not only that, but having a single repository for all external talent creates greater transparency within companies, so managers from different teams and countries can filter through and work with trusted experts from within their existing network (Or even search for new talent.

Projects:

Internal and external team collaboration becomes more effortless. With a contingent staffing, freelancers can update their progress as they work, cross off tasks and share work within the platform. Clear project overviews also give managers more control in terms of finances, and having more visibility into budgets can greatly aid forecasting, resource allocation and cost saving.

Payments:

Automating and consolidating payments can save managers time (we’ve heard from our clients that TalentDesk.io has cut down their payment admin time by up to 80%). Instead of working through hundreds of different invoices, a contingent labor solution can automate the whole process and generate a single invoice per month for your entire contingent workforce.

In regards to company goals, revenue targets and ‘the bottom line’, being inefficient can cost businesses more than just time and effort. Slowing down internal employees and managers from doing their core jobs can have massive implications on team productivity. One of our clients described how important having TalentDesk.io in place is for them, and how it’s helped in this area: “We’ve been able to streamline processes which has resulted in time savings, but it has also helped better collaboration...this has resulted in better work and has improved client satisfaction, which is crucial to the work we do.” In today’s world where being able to react quickly is critical to success, businesses can’t afford to be slow due to having archaic processes in place.

Contingent staffing best practices & benefits

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Efficient talent sourcing and onboarding:

With contingent staffing, you can easily access and organise your talent using powerful search functionalities, to filter by location, skill, rating, job title, rate or CV, to match people to the right projects fast. If you don’t have an existing talent pool of trusted providers, you can also source directly through a contingent workforce solution such as TalentDesk.io, and gain access to 1.5m freelancers. Once you’ve found the right people you can onboard them and store their documents efficiently and compliantly.

Effortless end-to-end project management:

Once you have a contingent workforce strategy in place, creating and tracking tasks and projects becomes quicker and seamless. You can collaborate with freelancers, manage deliverables easily, and keep an eye on costs through real-time insights and budget burndown data.

Simplified, hassle-free payments:

Contingent labor solutions also increase payment flexibility, you can pay your external workers by word, hour, day and there are more options available. Payments are automated and consolidated so you receive one monthly invoice instead of hundreds, which not only saves your internal teams time, but it also keeps your freelancers happy with accurate payment dates. Greater transparency into your spend can also transform budgeting so you can make more informed business decisions.

Industry data & expert insights

As the business landscape continues to evolve, the reliance on contingent workers is not just a trend but a strategic shift. According to SimplifyVMS, 54% of companies plan to increase their use of global contingent talent in the coming years. This shift is driven by the need for agility, cost efficiency, and access to specialized skills. Similarly, a Deloitte study found that 41% of organizations consider external talent critical to their business strategy, highlighting the growing importance of a well-managed contingent workforce. These insights underscore the need for robust contingent workforce solutions to manage this expanding talent pool effectively.

Risks of poor contingent workforce management

While leveraging contingent talent offers numerous advantages, poor management can lead to significant risks. Compliance issues are a primary concern - businesses that misclassify workers can face hefty IRS penalties and legal repercussions. Additionally, inefficient management of contingent workers can result in project delays, budget overruns, and disengaged freelancers. Without a dedicated platform like TalentDesk.io, companies may struggle with disorganized payment processes, which can erode trust and lead to the loss of top talent. Effective contingent workforce solutions mitigate these risks by providing structured processes for compliance, payments, and project management.

Diversity, equity, and inclusion (DEI) in contingent workforce management

Diversity and inclusion initiatives shouldn't be limited to full-time employees - your contingent workforce deserves the same commitment to fair pay, ethical hiring, and workforce equality. Ensuring equitable treatment of freelancers not only aligns with broader DEI goals but also enhances brand reputation and attracts high-quality external talent. Companies using contingent workforce solutions can implement consistent and transparent hiring and payment practices, promoting an inclusive environment for all workers. 

Recent decisions by companies like Meta and Amazon to scale back traditional DEI programs highlight the complexities of maintaining diversity initiatives amid legal and political pressures. However, this shift reinforces the need for companies to double down on fair and unbiased practices, especially when managing external talent. By integrating DEI principles into contingent workforce management, businesses not only mitigate risks but also create a more resilient and adaptable workforce. When freelancers feel valued and included, companies benefit from higher engagement, better project outcomes, and an enhanced brand image that appeals to both clients and talent alike.

How to implement a contingent workforce programme

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• Matching the right people to your projects can be time consuming or lack efficiency, even when you have an existing talent pool.
• Onboarding your external talent could be more seamless and is currently disorganised.
• Managing and collaborating with freelance talent can be slow, disjointed and is taking valuable time away from core tasks.
• Your teams could be more productive but they are having to spend too much time on external talent management.
• It’s hard to keep track of and on top of budgets, payments, and forecasting.
• Your freelancers never know when they are going to get paid. 
• Your contingent talent payments are time consuming, unorganised and a headache.

Evaluate your current workforce situation:

These aren’t the only challenges that lead companies to invest in contingent workforce strategies, but if any of these points resonated with you, then it’s time to start thinking about implementing a platform to solve these issues. 

Put the right technology to good use:

In today’s fast paced world, there is no need to spend additional time on manual tasks that can now be automated. A contingent workforce solution can automate repetitive tasks as well as ensuring on-time payments and smooth operations by reducing any human error. Find a solution that can help you quickly onboard your external workers, better manage your projects, and automate your payments and improve financial visibility. Essentially, find a platform that can transform the way you work, and set you up for success. For more information on selecting a system to suit your business needs, check out our blogs on how to choose the right system to manage your contingent flexible workforce, how to get stakeholder buy-in for a contingent workforce solution, and 7 steps to successfully implement your chosen platform.

The role of AI, automation, and future innovations

The integration of AI and automation in contingent workforce management is revolutionizing how companies operate. Advanced AI tools can analyze project needs, predict freelancer availability, and suggest the best-matched talent based on skill sets and past performance. Automation streamlines repetitive tasks, such as generating invoices and processing payments, reducing administrative overhead by up to 80%. As technology continues to advance, innovations like predictive analytics and smart contract management will further enhance the efficiency and reliability of contingent workforce solutions, allowing businesses to remain agile and competitive in a rapidly changing market. 

A relevant example is from TalentDesk.io Group's latest innovation, Phoenix, an AI-powered assistant that reimagines how businesses connect with talent via PeoplePerHour. By leveraging advanced AI, Phoenix helps companies find the right freelancers faster and more efficiently, showcasing how technology continues to drive productivity and agility in the contingent workforce space.

For more information on contingent workforce management software, read our full blog. ⬅️

To conclude

Although the working landscape has been evolving for some time without significant financial commitment; the events of this year have triggered a further shift within this space. The impact on contingent staff has been realised on a larger scale, and demand has increased, as has the need for contingent talent management solutions. 

Companies are now updating the way they interact with contract talent. Now smart companies are overhauling their flexible workforce plans to include contingent workers in a more strategic way, and including external talent more prominently within their overall talent strategy to achieve their goals. The way companies today are utilising contingent talent is transforming traditional business operations, as working with freelancers has increased business agility and growth, through on-demand talent now available to fill skills gaps at the click of a button.

To successfully navigate the new world of work, companies are turning to contingent staffing solutions to streamline their operations, harness the power of both their internal, and external people, and boost productivity so that they can focus on reaching their business goals.