Why your current tech stack doesn’t cut it for managing a contingent workforce

Most businesses today are using outdated systems to manage their contingent workers

August 17, 2022

Most companies are managing their external workforce with a VMS and an MSP. But your contingent workers are very different from vendors and services. Why aren’t you managing them with tools that are actually designed to manage people? 

With more and more workers choosing to go freelance, companies need to increasingly rely on them instead of full-time talent. This is a huge shift in the way we work. And companies feel a lot of pain around this shift because the workforce has changed but their systems have remained the same. This creates a few different problems within your external workforce program. 

Onboarding is taking too long

One of the biggest problems you’re currently facing is the time it takes to hire and onboard a contractor. For most companies using a VMS and an MSP, this takes around 4-6 weeks. But your teams that manage freelancers often need the worker to start as soon as possible. In some cases, the work itself might even take less than 4-6 weeks to complete, which just highlights how little this setup makes sense. 

And if you’re frustrated about slow onboarding internally, chances are your freelancers are even more frustrated. Once they find a client or a project, they typically want to get started immediately so that they can deliver great results, ensure the client is happy, and get paid. If you accept slow onboarding as an unfortunate part of your process, you’re not just hurting your internal teams that need the freelance talent. You’re probably also alienating your freelance talent and making it less likely that they’ll accept your projects in the future. And why would they, when they can go to other companies where they can get started quickly and focus on the work they were hired to do?

You don’t have visibility into your external workforce

The other problem with managing external workers with processes and systems that weren’t designed to manage them is that it offers you next to no visibility into your external workforce. And without visibility, it’s impossible to improve or optimize your external workforce.

Since you’re working with different systems and vendors that don’t talk to each other, information along each step of the way — sourcing, hiring, onboarding, classification, etc — is extremely siloed. This adds a lot of work for your internal teams to ensure everyone is aligned and up to date. It also means that it’s really challenging to get a clear grasp on what your external workforce looks like, how much it costs, or where it could be improved. 

Worker classification takes too long and audits are a nightmare

With each new expensive worker misclassification case, classification becomes a bigger compliance concern. But when you’re outsourcing classification, it becomes a lengthy step in the process. You’re sending it to the vendor that manages it, who typically already has a queue of classifications they need to handle. By the time they get to yours and send it back to you it could have taken days or weeks to process each specific worker. 

This is a frustration for all of your internal workers who rely on contingent workers to do their jobs. Once they find the external talent they need, they often need them to start immediately, not a few weeks down the line. And that’s just the beginning of worker classification headaches. 

In the event of an audit, you’ll need to collect all the relevant documentation around each individual contract worker. When you outsource classification this is an enormous amount of work to collect everything from them and ensure you have everything in place for the audit. If you were working in one system that handled classification you would always have everything you needed in one place, making audits a breeze. 

Outsourcing all of the steps really adds up 

If you’re using a VMS and an MSP, worker classification isn’t the only thing you’re outsourcing. You’re outsourcing almost all of the steps of contractor management — things like background checks and employer of record services — and, in most cases, you’re outsourcing the different steps to different vendors. 

Outsourcing adds a lot of time to each task. You need to communicate what needs to be done, wait for it to be completed, and put all of the outsourced pieces together at the end so that the contractor can get started. That makes working with external workers complex where it doesn’t need to be. If you did all of these steps in the same system, you’d remove all of the communication, back and forth, and the need to put everything together in the first place. External workforce management could instantly become simple and smooth. 

Late payments are frustrating your contractors

Freelancers rarely get paid on time, and it often comes up as one of their biggest frustrations. If you’re paying your freelancers late, you’re providing them with a terrible experience. But you’re also probably hurting yourself. 

Late payments are similar to slow onboarding. Freelancers who have to spend time chasing down payments for work that has already been completed aren’t likely to take future jobs with your company. All you’re doing is potentially alienating the talent that you want for your organization. This means that you’ll need to spend even more time sourcing new freelancers, when you may have already worked with the perfect talent for that job in the past. 

A bad experience for everyone involved

All of this points to a terrible experience for both your full-time and external workers. If you remove the barriers for your teams that manage contingent workers, they can focus on finding the right talent and delivering better results for your business. They can also focus on strategic resource planning that will help your business in the future, instead of being bogged down by annoying admin. And your freelancers will have a great experience that leaves them wanting to take more projects with you down the road. 

A better way forward with a system that consolidates and centralizes

Switching into a system like Worksome can eliminate a lot of the back and forth, give you full visibility into freelance management, and speed up your process by consolidating everything into one system and eliminating unnecessary outsourcing. It also automates a lot of steps in the process, so things like worker classification and payments can happen in minutes instead of days or weeks. It solves each of the problems we’ve covered here all at once and makes it easy for you to work with the external talent that your business needs. 

Click here to request a demo and learn more about how Worksome can help you take control of your external workforce and make it work more smoothly for everyone involved. 

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