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Understanding the Contingent Workforce – 11 Things You May Have Not Known

1. A Contingent workforce is a provisional group of workers who work for an organization on a non-permanent basis, also known as:

  • Freelancers
  • Independent Professionals
  • Temporary Contract Workers
  • Independent contractors
  • Project-Based Workers
  • Consultants

2. Contingent Workforce Management is the strategic approach to managing an organization’s contingent workforce in a way that it reduces the company’s cost in the management of contingent employees and mitigates the company’s risk in employing them.

3. There is near unanimous agreement among contingent staffing buyers that the use of Contingent Labor saves money – 92% reported so.*

4. On average over the last two years, the median estimated savings due to the use of contingent labor has been in the range of 9%-14% across almost all categories of buyers grouped by skills purchased, industry and company size.*

5. The average large company has 12% of its’ Workforce as Contingent Workers.*

6. A Master Service Provider (MSP) tends to be the most popular primary Contingent Management Model across Buyer categories. (*Staffing Industry Analyst)

7. Since the global recession began, companies cut back substantially on the use of Contingent Labor, however as the economy has improved, companies are now re-evaluating their staffing strategies seeking to have a more formal, optimized program in place for the use of the Contingent Workforce.**

8. Mergers and Acquisitions have forced companies to look for ways to better understand what they are spending across the entire organization including across Contingent Labor spend, and has resulted in a trend of corporate initiatives for Supplier consolidation and having preferred relationships.**

9. For companies that have had a first-generation Vendor Management System (VMS) in place to manage Contingent Labor, Statement-of-Work (SOW) or project-based services are driving new technology requirements not supported in the traditional VMS. (**Forrester)

10. The average mix of Contingents in the Fortune 100 is 20-30% of the workforce. This can be estimated to increase to 50-50% by 2020, at which point it would make sense for companies to establish the role of the Contingent Workforce Officer (CWO) as a C-Level Executive. The CWO would focus on using workforce mix modeling to get the right ratio of Temp vs. Perm in meeting Stakeholder objectives. (Staffing Industry Analyst –The Future of Staffing)

11. Internal Revenue Service (IRS) mandated 1099 Independent Contractor Compliance has evolved beyond the “20- Point Checklist” to Services Procurement, the Statement-of-Work (SOW) and SOW Management.

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