Whether 2016 was a great year for you or a rough one—financially, personally, socially— 2017 is a chance for change and new beginnings. A report from the U.S. Government reveals that 40.4% of workers now hold contingent labor positions. With this comes growing concerns for operations with many locations that may lose track of contingent hires and suffer from uncharted spending. The start of the new year presents a perfect opportunity to begin managing your contingent workforce and saving money for real. Here are our simple tips to effectively lower your contingent workforce costs:
#1 - Rate Card Management
Labor rate cards are one of the best ways to keep your spending in check. A rate card should include a job title, a job description, and the low, average and high pay rates for that position. Once completed, all of these will contribute to a comprehensive job catalog that will go out to every hiring manager.
The rate cards should be updated frequently; Most businesses don’t have an accurate or continuous view of the labor market. Because the contingent labor workforce is so volatile, having real-time accurate rate data at any specific point in time is essential.
Did you know? PeopleTicker also enables users to create custom market rate cards which automatically update when market activity changes the rate information for a skill set. Users can then easily compare fluctuations in market activity to their static internal current “buy rate” and salary structures.
Get more details on the procurement of the contingent labor market with this free guide:
It takes a great deal of cogs to move a labor management program forward. Recruiters, hiring managers and internal staff all bring important skills to attracting and managing contingent labor. Like with any process that takes so many hands, there are bound to be inefficiencies.
Auditing is a bit of a frightening word, but in this case, the opportunities for seamless contingent procurement and management means enormous cost savings. Take time to analyze all the activity generated by a centralized labor management program. Discuss all the individuals and technology and explore ways to improve or adjust each. While examining your process, be sure to answer these questions:
What is being done now?
What should be done?
What would it cost?
What will be impacted?
What will the outcome be?
It’s hard to find the time and resources for something like this, but work done today is work saved from yesterday, especially in the case of developing efficiency. If auditing your own process is simply something you can’t swing, consider hiring a managed services provider (MSP). The right MSP will understand your organization’s unique needs and meet them by developing the best process for your team. While it appears daunting to bring in an outside source for your hiring, in the long run, you save team resources.
#3 - Invest in Technology
Similar to introducing MSP, technology is a worthy investment. Although the initial costs of investing in a software to manage contingent labor rates can be high, the long-term benefits equal cost savings. A complete contingent labor management system with real-time salary and hourly rates data gathered from real participants can be one of the best tools in procurement’s pocket. Relying on survey data is simply an inaccurate way to create a competitive and cost-savings compensation plan for contingent labor because the way the data is gathered leaves far too much room for embellishments and errors.
Effective rates and salary data cannot be generated from universal job titles
Rates and salary data vary widely based on specific skill sets, often unique to each company
Indexing live job market data is vastly more accurate than historical data
Your system must address these! The changing of the years is as inevitable as the changing of the contingent labor workforce. It’s quite possible the elements of either are going to experience great change as time moves on. There are two things we can be certain of: The contingent labor force is changing, but not going away, and the yearning for cost savings in business will always prevail.
If you’re looking for a managed services provider or the technology to help you effectively validate hourly and salary rates for contingent workers, then talk to a PeopleTicker representative today!
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