With the number of contingent workers within the enterprise workforce expected to rise (Magnit research shows that 76% of employers anticipate contingent headcount to increase or stay the same in the coming year), leaders must find ways to drive even greater program impact from their extended workforce and scale their successes. To adapt to today’s market and overcome talent supply issues, they must approach their non-employee workforce as strategically as their full-time workforce.
Still, at a time of skills shortages, when it’s critical for businesses to build deeper talent pipelines, many have stopped short of fully optimizing their contingent workforce management programs. Magnit’s contingent workforce maturity curve can act as a guide for this process, helping leaders understand what it means to mature their program and guide next steps toward their ultimate goals. It outlines the key characteristics of each stage and the features that signify a company has moved from one to the next.
Stage 1: Establish a Contingent Workforce Program
Businesses with ad hoc programs have only just started exploring workforce integration. In these companies, contingent workers are managed on a case-by-case basis by the department for which they work or a team that handles vendor management. At present, just under half of firms using contingent workers fall into this category.
While this approach may help companies fill skills gaps on a small scale, the benefits of leveraging contingent workers stop there. Ad hoc programs are unlikely to save companies money or drive business objectives on a large scale. As businesses progress through this stage from “ad hoc” to “fragmented,” their programs recognize the need for standardization of the CWM process but have only taken initial steps to that end. These companies are making investments in and implementing both vendor management systems (VMSs) and internally managed program offices (IMPOs) or managed service providers (MSPs).
In these companies, business leaders are exploring the benefits of integration, but the broader leadership team still views CWM as an ad hoc endeavor with little consideration given to the strategy’s scalability or potential to drive operational improvements.
Stage 2: Unlock More Channels of Talent
To move from stage 1 to stage 2, companies will need to complete their technological and operational implementations and begin to view their programs as more strategic pursuits, incorporating resource tracking, direct sourcing, and advanced analytics into their processes.
Companies in this “centralized” phase are more focused on improvement than implementation, have started assessing and evaluating returns, and are taking tangible steps to support scalability. Furthermore, program leaders are interested in building governance with an eye toward controlling costs while improving their sourcing models.
As organizations advance through this stage to a more “empowered” state, their programs are fairly advanced, with near-complete cross-functional engagement among high-level leaders. Companies with “empowered” programs engage in proactive decision-making efforts informed by extended workforce data to drive organizational objectives. These programs are the result of a concerted effort by managers and talent acquisition teams to improve processes, but their influence remains limited by a lack of comprehensive C-suite investment, as do their benefits.
Stage 3: Implement an Integrated Talent Strategy
Breadth and depth are the defining qualities of a fully integrated CWM program. These programs extend to every corner of the enterprise and leverage a comprehensive range of strategies that streamline sourcing, control spend and support holistic visibility. Fully integrated companies have advanced direct sourcing, non-employee DE&I and automation strategies in place as well as C-suite buy-in.
The fruits of the process come from engaging with solutions that support the agile, cost-effective and dynamic workforces that today’s businesses need to succeed. However, it’s important to keep in mind that maturing a CWM program is a continuous process. Critically, fully integrated programs don’t see their journey to maturity as complete just because they’ve reached the “final” stage; they understand that the process is ongoing.
It’s not about making specific investments or using specific tools. It’s about pursuing continuous improvement, regardless of where your business sits on the curve. Don’t take your foot off the gas just because you’ve achieved your first set of goals. That just means it’s time to circle back and find ways to further refine processes to drive incrementally larger program impact.
In the next part of this series, I will discuss how to overcome obstacles on the path to program maturity.