Unpacking the Vendor Network
The impact of edge cases in contract employment and what clients can do about it
Engaging the contract workforce has long been the go-to strategy for organizations that want to provide extra support for temporary or high-priority projects, and with good reason–opting for a contract hire over expanding full-time employee headcount can result in roughly 25-45% savings in overall human resources spend.*
Cost isn’t the only factor. Companies operate within sensitive deadlines and timely delivery of projects is paramount to ongoing success. This means that the time-to-fill rates for contract roles need to be tight and consistent. While generally speaking the time-to-fill ratios in contingent workforce management (CWM) have been quite good, they can still be unpredictable. Unforeseen edge cases present a significant challenge that slow down the process of sourcing, interviewing, and hiring considerably.
How Contract Workforce Management Works
Traditional contract workforce management (CWM) is usually made up of a network of separate organizations that work in collaboration to provide contract employees for open roles.
Managed Service Providers
Client organizations that don’t wish to take on the administrative tasks of sourcing, hiring, and managing contract employees internally generally use managed service providers (MSPs). These MSPs serve as the client’s primary point of contact, in charge of collaborating with multiple staffing agencies to provide quality candidates for the client’s hiring needs.
MSPs automate their workflow processes by leveraging some kind of vendor management system (VMS), which is a software solution that handles communication and dissemination of data around sourcing, hiring, and employment. However, as MSPs are not technically the employers of record (EOR) in this system, they must coordinate with staffing agencies on an ongoing basis to keep the employment data current in the VMS.
Staffing agencies serve as the EOR in this system and curate all the talent. Their tendency to focus on specific industry verticals means that an MSP might have to collaborate with several different agencies in order to satisfy a client’s hiring needs, should they happen to span a wide breadth of roles.
The Impact of Edge Cases
From the moment a client organization identifies a staffing need to the day a contractor walks in the front door, a comprehensive process of communication and coordination across multiple agencies takes place. The process is generally sound, provided nothing goes wrong. However, in the event of a failure or an unanticipated change in the process – in other words, edge cases – a lot of stress is placed on the effectiveness of communication. This is further exacerbated by the sheer volume of stakeholders that all must coordinate and respond in turn.
To put things into perspective, consider the interview process. When the hiring manager must unexpectedly reschedule an interview, the following takes place.
- Client organization notifies the MSP of the schedule adjustment
- The MSP notifies the appropriate staffing agency, under whom the candidate is employed
- The staffing agency notifies the candidate of the schedule adjustment
- If the candidate is unable to make the proposed new time, he or she must pass along a counter suggestion up the same chain of communication
The necessary chain of communication among the various stakeholders prevents timely responses to edge cases, and examples similar to that above exist throughout different stages of sourcing and recruitment. Employment and terminations can be areas of deeper complexity, as staffing agencies each observe their own standard processes around payroll, bonuses, reporting, and HR-related issues.
If all of this seems like a lot, it’s because it is. The good news is that if companies want alternatives to the traditional CWM system, options are available.
How HireArt Is Different
HireArt represents a fresh take on legacy CWM workflow models by bringing recruitment, management, and software development all under its own roof. By vertically integrating these traditionally disparate processes, HireArt reduces reliance on third-party collaboration while streamlining the entire process for total contingent workforce management.
Taking into consideration traditional systems of CWM and common edge cases, here is how HireArt compares:
Edge cases come as part of the natural ebbs and flows of business, but they don’t have to carry as heavy a burden of cost and time as they have before. Through HireArt, organizations can count on a smoother, simpler process in resolving unforeseen challenges throughout the entirety of the contract workforce management process.
HireArt is a contract workforce operating system that lets companies source, employ, and manage top-performing contract workforces. We provide our clients with the tools and visibility needed to easily manage their contract workforce and staffing vendors in a single seamless, instantly-deployable platform.
To learn more or to schedule a discovery call, visit HireArt.com
*“What You Need to Know About Burden Rates”, Justworks, August 4, 2022, https://www.justworks.com/blog/what-you-need-to-know-about-burden-rates