Which KPIs Should You Track for Your Contingent Workforce Program?
“You can’t manage what you can’t measure,” says the old business axiom. This is why performance-minded managers employ Key Performance Indicators (KPIs) to quantify critical performance aspects in all areas of their business.
Some of the common KPIs employed for contingent workforce programs frequently correlate with workforce management success. As experts in contingent workforce strategy, we often encounter questions about which KPIs are most effective, so let’s talk a bit about them and selecting the ones best suited for driving success across your contingent workforce program.
KPIs vs SLAs
First, let’s clarify a common point of confusion. Many mistakenly conflate KPIs with Service Level Agreements (SLAs). Although both KPIs and SLAs effectively enunciate performance expectations, these terms are not interchangeable.
The Staffing Industry Analysts define KPIs as, “a set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals.” While KPIs are meant similar to SLAs for track supplier and program performance tracking, they differ in that KPIs usually don’t usually cause a contractual or fiscal consequences for failure to achieve. A KPI is a measure of performance, but the SLA is a contract that defines the consequences a provider faces if any of the KPIs established are unmet or exceeded. SLAs rely on well-defined KPIs to track performance.
Common KPIs for Engaging Contingent Workers
In order to construct the contractual SLAs, contingent workforce program managers should consider employing KPIs to set markers for performance across mission-critical activities. There are a number of buckets contingent workforce program performance metrics might fall into—Workforce Analytics KPIs, Supplier Analytics KPIs, and Spend Analytics KPIs to name the most common.
While your proverbial mileage may vary, there are the typical workforce management activities that should be monitored and measured in each of these buckets. Good contingent workforce program consultants should be able to help develop a formalized list of KPIs and the means for actively measuring against them.
Workforce Analytics
In the Workforce Analytics bucket, one typically focuses on developing KPIs around metrics such as headcount analysis, time-to-fill measures for contingent work, and other indicators of success in measuring the overall efficacy of contingent labor itself.
Supplier Analytics
For the Supplier Analytics KPIs, a program might examine supplier fill rate metrics, rate card compliance among suppliers, billings and payments analyses, and other measures of how well a supplier interacts with the workforce management program.
Spend Analytics
Spend Analytics is another crucial area to assess and measure. In this bucket, KPIs might be focused on rate card analysis, overtime utilization, and services procurement/SOW spend activity.
Advanced Analytic Processes
There is much more that can be accomplished by achieving well-defined KPIs. Advanced analytic processes can consider the cross-linkages between KPIs that straddle more than one analytical bucket.
Advanced analytic processes also provide the basis for benchmarking your individual contingent workforce program’s performance against the industry as a whole so that you can not only boost your internal achievement, but work to attain best-in-class performance against the backdrop of your entire industry.
About Contingent Workers
Contingent workers are not full time employees of a company. A contingent worker is someone who works for an organization without being hired as their employee. Such workers often come and go as business demand dictates and are often not looking for a long term commitment. They can be an independent contractor with specialized skills, temporary workers to help out seasonally, or gig workers looking for work on an as-needed basis. These alternative work arrangements can benefit companies looking to not hire permanent employees and that want to enjoy more cost savings across the board. Hiring workers this way can expedite the hiring process and greatly help with risk management.
Increase Contingent Workforce Management Program Potential
That’s about all for this blog, but you don’t have to go so soon—we’ve still got plenty of workforce management strategy wisdom to share!
Whether you’re looking to succeed as an individual in the professional realm or you oversee recurring or contingent workers, you’ll love working with our world-renowned workforce experts at nextSource! We’re a managed service provider that can help develop and implement strategies for optimal flexible workforce performance in all areas, customized to suit your specific needs. Connect with us today to help with your business operations! We’re among the leading organizations in our field to equip your human resources department with the strategies it needs to fill hiring gaps.
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