Contract workforce programs provide important flexibility and value for companies across all industries and regions. Although programs are commonly managed by third parties, these days more companies are choosing to manage their contract workforces themselves.
Just ten years ago, the thought of managing an entire program internally likely seemed daunting or downright impossible. But technology has come a long way since then, and modern platforms and tools make managing your own program a viable option.
The question is, is it right for your company?
Below, we’ve summarized three helpful indicators to help you arrive at the right answer.
Third-party managed service providers (MSPs) are dedicated service models that serve on-site as resources to help drive processes and improve efficiency around contract workforce management. This service model is well-suited for large, enterprise-sized programs, but it becomes unwieldy and inefficient the further down-market it goes. This is due in large part to incentive structures.
Given the tendency to bill based on a percentage of contract labor spend, the unit economics of mid- and small-sized programs provide smaller margins. Companies with smaller programs will see diminished service, longer response times, and a host of other unsatisfying compromises.
As previously mentioned, it’s common for MSPs to charge based on a percentage of overall program spend. What this means, however, is that they’re not usually well-incentivized to identify and support cost saving opportunities for customers.
This complicates the industry’s trend to embrace cost-saving measures, such as direct sourcing, as more mainstream practices. Companies that are interested in including such measures into their contract workforce program strategy may find they receive little support for their adoption.
Through third-party management, companies tend to exhibit less control over the important details that contribute to the quality and value of their programs. Traditional MSP frameworks can feel inflexible. Small or midsize clients may find themselves paying for features or services that they don’t actually need as part of a package offering, and some of the fees can feel disproportionately high. Sometimes spending thresholds are contractually dictated, insisting that clients maintain a minimum spend. This undermines one of the core benefits of having a contract workforce program in the first place: flexibility to scale as needed.
Transparency can also be a challenge. Clients seldom have full visibility into the selection criteria of job candidates. This is especially true if the MSP has strategic relationships with select vendors, which can ultimately lead to bias when helping clients fill roles.
Owning management of the contract workforce program gives companies greater control over alignment with business needs, their employer brand, and the contractor and hiring manager experience. Modern solutions come with embedded employer of record (EOR) capabilities and integrated tool sets for sourcing, recruiting, and managing contract workers, giving users the ease and simplicity of a single platform with all the necessary resources already in place. Software automates day-to-day tasks and ensures compliance with state and federal regulations, which frees up a lot of time and energy for teams, even when working with comparatively fewer resources and staff. Overall, taking over management of the program provides a lot of flexibility for companies to choose the right candidates, create an employment experience befitting of their brand, and scale their program in accordance with business needs.
Modern technology has made managing your own contract workforce an easy and often preferable option for many companies. HireArt is the only complete platform that gives companies all of the tools they need to manage their own contract workforces. We embed global employer of record (EOR), on-demand sourcing, vendor management, and freelancer compliance into a single, unified contract workforce platform.
Learn more about how HireArt can help you manage your own contract workforce program by scheduling a discovery call today.
