Contingent workforce management practices that hinder performance

More than 60% of businesses believe their future workforce will work more remotely, and over three-quarters plan to maintain or increase their engagements with independent talent by hiring contingent workers.

With so many companies looking towards including a contingent workforce program for the future of their business, it’s important the running of this type of disparate workforce is managed effectively. But as with every new approach to staffing, it’s also vital that best practices are adhered to, and bad practices avoided.

In this guide, we will look at how companies can spot contingent labor management bad practices that may hinder performance as well as look at how they can avoid issues with temporary workers in the first place.

What is a contingent workforce?

A contingent workforce is a pool of workers whose members are hired on an on-demand basis rather than hiring permanent employees. A contingent workforce may consist of consultants, freelancers, independent contractors, and gig workers who are not on the company’s payroll because they are not employees. 

Companies hire contingent workers as part of their workforce strategy as it provides flexibility. According to a report by the US Government accountability office, over 40% of the US workforce is now made up of contingent workers, fueled by the rise in popularity of the gig economy.

What practices do businesses need to avoid when managing contingent workers? 

Having a successful contingent workforce management program can be difficult and the task comes with its own set of challenges. It’s important to ensure that bad management practices are avoided to ensure that these challenges do not become expensive problems.  

Here are a few ways a business can manage contingent workers and prevent bad management practices from occurring.

Unknown or poor engagement of workers

Most organizations acknowledge that they need help to measure engagement levels among contingent workers due to their temporary and often remote nature. This may seem obvious, but it’s extremely difficult to maximize the investment made in contingent employees if you don’t know how engaged they are in their work.

Although “worker engagement” and “contractor engagement” are popular buzzwords right now, many businesses struggle to take these concepts and apply them to contingent workforces, often leaving them to their own devices.

It’s important that organizations commit to strong communication with contingent workers to motivate them and draw them into the company ethos (more about communication later).

Poor management support

Poor management of contingent workers can negate many of their potential benefits. One of the main risks associated with the poor management of temporary workers is that it can lead to compliance and legal challenges if the workers don’t understand the regulations that govern the business. This may result in significant penalties, fines, and legal costs.

The expanding practice of hiring contingent workers can also expose companies to competitive risk from the loss of intellectual property, trade secrets, and organizational knowledge. When these workers support a business’s critical functions and interact with customers, the lines between the contingent workforce and employees blur, making it vital that managers provide the support and governance required to keep everything running smoothly.

Poor communication 

Working remotely has a risk of isolating workers from the business. It’s important to include contingent workers in an organization’s communication strategy from the outset to ensure they feel part of the team identity and have all the information they need to succeed in their role. Failing to do so can lead to quality of work or compliance issues and may foster a lack of motivation amongst staff.  

Lack of worker visibility and transparency of work

It’s important for businesses to make sure that their contingent workforce is visible to managers, owners, and other stakeholders. A company needs to be able to see where its contingent workers are in the organization, what their role is, and what they are expected to achieve. If you allow contingent workers to disappear into the background, understanding what they do and holding them accountable for their work will be far more difficult.

Have a process set up where contingent workers are monitored, record all available data regarding the work they perform and the hours they are billing you for. Use a vendor management system to manage your external workforce KPIs.

Poor onboarding process

Failing to properly onboard contingent workers increases the risk that they will feel disengaged from their work and may lead to them making mistakes due to a lack of awareness of protocols and processes.

An employee entering an organization on a short-term or flexible basis should be made to feel like part of the team from day one. Contingent workers who instantly feel at home in the company will be more productive and feel comfortable enough to ask for help if they need it.

Dangers of poor onboarding when employing contingent workers

Here are a few onboarding pitfalls to avoid when you want to implement a successful contingent management program.

Failing to make contingent workers feel welcome: Contingent workers should be welcomed into the business by everyone. Offering a warm welcome just as you would with full-time employees helps new arrivals to feel comfortable in the working environment and eager to do their best for the company.

Not giving enough information: One of the best ways to integrate new employees into a business is to give them plenty of information about their new role, the company, and the company ethos. Failing to give contingent workers a thorough introduction to the business raises the risk of them feeling disengaged and potentially making mistakes due to a lack of awareness.

Treating temporary staff differently to permanent workers: No one wants to feel like an outsider, so it’s good practice to set policies that encourage all employees regardless of their contract type to treat their co-workers with equal respect, Treat contingent workers as part of the team even if they are short-term contracts.

Not providing dedicated support: One of the most common pitfalls employers fall into when using temporary staff is expecting the individual to get straight to work with little dedicated guidance. Just like every other new recruit, a contingent worker should have access to the resources they need as well as pathways to the support that will allow them to do their job properly.

Setting unrealistic expectations: Setting goals that are unrealistic or unachievable will likely result in contingent workers feeling stressed and unhappy from the start. This may result in the quality of their work suffering. 

Summary

Avoiding bad management practices and having an effective contingent workforce management program is vital to the success of any business’s workforce in the modern world. We hope that with a little help from this article, you now feel both better informed and more able to deal with the problem head-on.