How Data Can Help You With Future Workforce Planning

Balancing a workforce of full-time employees and independent contractors is a challenge many modern companies are facing. A blended workforce provides opportunities for strategic growth, staffing flexibility, and access to in-demand skills. But figuring out how, where, and when to use independent contractor talent can be challenging.

Traditionally, workforce planning involves projecting a headcount of workers based on growth forecasts and budgets. Workforce planning today is a little more complex than that, but also more flexible. Companies need a way to account for a blended workforce model as specialized and project-based work shifts more towards independent contractors.  

Below, we explore the importance of data and how historical patterns can help you optimize future planning for your workforce. 

The Importance of Collecting Independent Contractor Data

Many companies commonly track detailed metrics for employees but fail to do the same for their independent contractors. This can create a huge blind spot in workforce planning efforts. Collecting the right data points on your contractor population can help you to: 

• Optimize costs with a better understanding of market rates for specific skills   
• Improve project outcomes by hiring the right independent contractor for your needs 
• Reduce compliance risk  

What Types of Independent Contractor Data Should You Track?

To build an effective data framework, companies should consider tracking the following key metrics. 

1. Skills availability and market rates: To help with budgeting and timing of projects, keep track of skills availability and market rates. Hiring managers should have a good idea of the specific skills they are looking for when hiring independent contractors. Keep an eye on the availability of these skills as well as the current rates independent contractors are charging for them.
2. Independent contractor performance metrics: Tracking the performance of independent contractors can be a delicate balance compliance-wise, but documenting metrics such as project completion times and the ability of contractors to meet deadlines is valuable. The contractors who work best with your company create an independent talent network that can be rehired to fill future workforce needs.  
3. Cost comparisons: Track the all-in costs of using independent contractors for project-based work versus employees. This can help you to correctly allocate resources. Be sure to account for both direct and indirect expenses.

How to Build a Data-Driven System

Data collection can start simply by focusing on your current independent contractor population. Focus on tracking skills, rates, project outcomes, and manager satisfaction.  

Once you are in a good flow of gathering data, you can start integrating that data into your existing workforce planning tools. Your company might use a certain type of software, but even a well-structured spreadsheet can provide valuable insights.  

Next, determine which factors have the biggest impact on project success in your company. If you can establish evaluation metrics for assessing independent contractor performance, these can be helpful to include as well. These metrics should be applicable across all departments and relevant to each independent contractor your company hires.    

Be sure to review your data regularly to identify trends, anticipate needs, and refine your hiring strategy. As you grow your database, you can begin to move from reactive to predictive planning. By establishing historical patterns, you will be able to see seasonal skill demands, rate fluctuations, performance patterns, and emerging skill gaps. Visual representations of data can be particularly helpful to spot trends quickly.  

Building out a functional data-driven system takes time but can provide some significant advantages. Data can offer valuable insight into when to scale resources up or down, improve the quality of independent contractor hiring, reduce costs by optimizing the mix of employees and contractors, and assist with better budget forecasting.  

The future of work is blended, flexible, and data-driven. Make sure your company is ready. MBO Partners offers a wealth of tools and resources for contingent workforce management. Reach out to our team for assistance with finding top contractors, handling administrative and regulatory tasks, building a talent database, and more.