6 Steps to Creating a Contingent Workforce Management Strategy

To engage independent workers effectively and successfully, it is critical to have an independent workforce management strategy. Whether you work with independent contractors, freelancers or consultants, contingent workers must be engaged and managed differently than traditional employees. There is a distinct level of compliance risk associated with this pool of talent, and the needs and desires of contingent workers are unique.

A centralized engagement program protects you from compliance risk and ensures everyone who engages an independent worker is following company-wide procedures and processes. It can also help manage the entire contingent worker lifecycle, from finding and engaging top talent, to properly managing their time at your company and possibly re-engaging them in the future.

Here are six steps to follow for creating an independent workforce management strategy.

1. Know Your Level of Risk

Engaging contingent workers comes with inherent risk, particularly if you do not currently have clear policies for how these workers are engaged. When managers who need talent are left to their own devices, they may turn to personal networks or third parties to bring in workers who are not fully qualified to operate independently. This can put the business at risk for compliance and co-employment issues, including costly misclassification claims and audit exposure. It also makes contingent worker spend difficult to track and may be more expensive in the long run.

If you have existing policies regarding independent talent engagement, consider whether they comply with federal, state, and local laws. Look for gaps or inconsistencies and identify areas that could benefit from improvement.

2. Outline Your Program

There is no single formula for building a program to manage contingent workers. To create a successful strategy, think about the goals that are most important to your organization. What are leaders going to be looking for in a program, and what potential return on investment will matter most to them? Thinking through these questions will help you design a program that fits your specific company needs.

Once your goals are defined, outline the core components of your program structure. Determine how talent will be sourced, vetted, and onboarded, and define how performance will be tracked. Consider what technologies you may need to support program efficiency. Creating clear workflows and responsibilities early will make it easier to measure results, maintain compliance, and continuously improve your strategy over time.

3. Identify Key Players

Company executives and stakeholders must fully understand and champion your program or strategy in order for it to be successful. Identify these people early on, involve them in discussions, and answer any questions they have. Be sure to incorporate internal staff as well. If there are certain departments or managers who use contingent talent more than others, get their thoughts and opinions from the start so you can build a program that will meet their needs.

Explore: MBO’s Program Maturity Index is a self-assessment tool that helps you quickly benchmark where your contingent workforce program stands today—and where to focus to keep it evolving for long-term success.

4. Develop a Plan for Program Adoption

Developing a defined business case for an independent workforce program or strategy is an important part of securing buy-in. When stakeholders understand the return on investment associated with using independent talent and why a program is needed to manage these workers, it will be easier to roll out the program and gain support from other employees.

When building a plan for program adoption, make sure to define program goals, identify potential roadblocks along with solutions, and clearly explain how your strategy will benefit the company in the long run.

5. Develop Rules for Compliance

As discussed earlier, compliance is an essential part of a successful contingent talent management strategy. Develop clear rules for identifying, engaging, and managing independent contractors when building your program, and keep managers, stakeholders, and employees informed so they understand why compliance is so important.

Remember, worker classification is complex. As the independent workforce grows, laws continue to shift as well. It can often be difficult to understand what is required and what applies to your particular business. If you don’t have an expert on your team to answer legal questions, consider partnering with a company that can help you navigate these issues. Beyond meeting regulations, effective compliance practices build trust with your independent talent and protect your brand reputation.

6. Implement Your Strategy and Iterate

Successful internal adoption is an important part of building a sustainable program. Talk to managers about their concerns and take the time to answer any questions they have. Having these discussions early can help you generate solutions to potential pushback before it happens. Make sure employees know what to expect and who they can go to with questions.

You may also consider developing FAQ guidance documents about new policies and procedures or conducting a soft launch with a few departments to gather feedback before rolling out the entire program.

Have more questions about building your contingent workforce strategy? Our team of experts is here to help.