3 Expert Tips for a Successful Contingent Labor Program Implementation

There are plenty of individual strategies, best practices, processes and ideas offered by practitioners of workforce management which helps organizations build a better contingent labor program. However, they all generally tend to focus on pieces of the overall whole. This article will look at three broad themes that, if embraced and practiced, can help any organization succeed in the design, deployment and management of a successful contingent labor program.

Tip #1: Build Bridges Not Barriers

Assess your current contingent workforce practices with a comprehensive exercise involving objective evaluation of important factors such as:

Supplier Contracts

Ensure they are mutually beneficial to all parties

Workforce Management Plans 

Understand how contingent assets fit into the overall corporate strategy alongside FTEs, outsourcing relationships, free-lancers, interns and other classifications

HR Policies and Practices

Confirm all policies, including tenure and temp-to-perm practices that are fairly communicated and enforced for your contingent labor

Compliance Exposure

Evaluate risks such as co-employment, worker misclassification, and the often-overlooked compliance among supplier partners; with laws and regulations governing accurate categorization of exempt/non-exempt workers, overtime payment, mandated sick time/PTO, etc. Be sure your company isn’t exposed to risk by supplier partners.

Accounting and Finance

Review practices regarding invoice processing (centralized vs. de-centralized). Determine if your company is accruing for time and expenses that are not being processed in the current period; if contingent labor costs are accurately are being allocated to the proper cost center; and whether current onboarding practices are sufficient.

Supplier Relationships

Examine to determine if your company has grown beholden to certain suppliers who may be afforded a bit too much leverage. Ask if your program requires better performance from your supplier partners.

Bill Rates

Assess and compare to the industry/geographic average.

Nearly all of these factors require some degree of cooperation between your internal resources and your supplier/provider partners. Therefore it pays to define a strategy with a realistic plan to move your company towards best practices that focus on bridging gaps as they are identified. Change is difficult, yet adoption is vital and very challenging. Working together eases the burden. Oftentimes, the most practical way to build a bridge to the future begins with an understanding of the place from which you’re starting!

Tip #2: Don’t Let Perfect be the Enemy of Good

There will always be challenges during implementation. Plan to evaluate trade-offs to address unforeseen obstacles/challenges as they arise. For instance, consider the case of one company that didn’t have any job titles for their contractors. Rather than hold-up the contingent labor program’s implementation to classify all of those workers with the correct job title, the implementation proceeded while adding a subsequent phase to reclassify those workers.

Pursuing perfection is a common mistake when implementing VMS systems. Due to high expectations, a software solution solving all process-related challenges from the outset, is unlikely. For example, many new VMS users are stymied when trying to organize the nuances of job titles and rates or when configuring system settings in the VMS.

Some areas do need to be near-perfect such as cost codes and assignment to resources.  Important details like manager email addresses for approval routing, system notifications require accuracy as do correct locations to ensure candidates go to the proper address for interviews and know the correct long term work location. These require a focus on perfection simply because location is important for compliance and tax reasons.

However, many important goals simply can’t be accomplished in the time required to get a contingent labor program off the ground in a timely fashion. For instance, system integrations are very complex and should be considered for a subsequent phase. Supplier rationalization is another area where focus on perfection early in the game can derail the whole process. Although many organizations have too many suppliers, it’s deeply challenging to reduce those numbers in a way that’s being a positive partner with your supplier partners. It is best to get the framework of the program successfully deployed before circling back to improve the accuracy of these important contingent labor program facets.

Tip #3: Plan for a Journey, Not a Destination

For those reasons stated above, developing a long term strategic roadmap with a plan for positive progression is critical to success. During the transition from implementation to steady state operation, it is essential for the partnership to maintain an implementation presence. Ergo, it is unwise to view the “go-live” date as the terminus point of the implementation. All programs will mature through a progressive maturity model – it’s important to plan for it with your partner!

Realize that there will be changes and turnover. Ensure there’s a plan for knowledge transfer. Goals and priorities are bound to change. Schedule quarterly business reviews to confirm the program adapts, and is proactive about continuous improvement. Avoid complacency along the way not only among your internal teams but for all members of the partnership! It’s a long road and working together will make the travel easier and more productive.