Importance of Data in a Contingent Workforce Program

A contingent workforce program speaks to a business owner’s need for efficiency, though the reality of these programs are often far from the imagined ideal. This is partially because common metrics often fail to account for multiple external factors and partially because organizations simply don’t have enough information to evaluate their strategy in the first place.

If you want better returns, integrating additional data can have a major impact on how much value you derive from a contingent program. We’ll look at what’s measured, how to use it, and which tools you can use to collect it.

Intro to Data in Contingent Workforce

All companies have plenty of data to work with, whether it’s observed data of worker behavior or hard data vis-a-vis final project completion. Measured data for a contingent workforce typically includes the following:

  • Number of workers: It’s not just how many non-employees are working on the project, but how many are working on any given day across your entire organization. 
  • Suppliers: If you have more than one supplier for your workforce, you need to track their performance, rates, and how much they’re contributing to the bottom line.  If you have one supplier, you’ll need to weigh worker output against the cost of each hire. More data will make it possible to secure the best workers for the best price.
  • Timing: When it takes weeks to find a person for a time-sensitive position, you sacrifice the agility that a contingent workforce was supposed to account for. When you have more data available, it’s easier to estimate project completion — particularly if you need highly-skilled professionals.

The major challenges with these multiple moving parts appear when collecting this often disparate data and attempting to figure out how each piece fits in context with the others. Developing a data strategy and utilizing the right tools and systems to help interpret the data will have a marked effect on your final outcome.

Logistics with Data Usage

When it comes to the logistics of data usage, most business owners find themselves using data retroactively instead of proactively. Trend information is important, but best-in-class programs are able to use data to help identify rocky water ahead prior to those waves crashing. Proper analytics can help business owners stay on budget by leveraging data to ensure the right contingent workers are being utilized and to identify who are making the most contributions to the bottom line. 

There’s more to data usage than pure cost savings, though. Business owners can also use data to grow an organization, particularly if they’ve had trouble scaling in the past. Data makes it possible to find reliable solutions that will work as well in a pinch as they do for carefully planned initiatives. It’s also a veritable lifesaver for SOW management. You’ll not only know who is working on what, but you’ll also know when certain tasks are falling behind. Faster intervention leads to fewer conflicts, revisions, and hard feelings.

Business Strategy Usage

In addition to the operational and logistical benefits, data usage plays a pivotal role in shaping the business strategy of a contingent workforce program. By leveraging data effectively, organizations can make informed decisions and drive overall success. Here are key aspects of business strategy where data usage proves instrumental:

  • Scalability and Growth: Scaling a contingent workforce program requires accurate information to overcome challenges effectively. Data analysis helps businesses understand program performance, identify growth opportunities, and adapt to market demands by determining the ideal size.
  • Risk Mitigation and Cost Optimization: Data-driven decision-making in contingent workforce management helps businesses mitigate risks and optimize costs by identifying inefficiencies and areas of high expenditure. This enables organizations to renegotiate contracts, improve supplier selection processes, and optimize resource allocation, resulting in substantial cost savings without compromising quality or productivity.
  • Strategic Workforce Planning: With the help of data, organizations can strategically plan their contingent workforce to meet future demands. This enables proactive talent acquisition, addresses skill gaps, and facilitates targeted training programs to enhance workforce capabilities.
  • Performance Evaluation and Partnership Optimization: This data empowers businesses to conduct objective performance evaluations of suppliers and workers, enabling them to identify top performers and optimize their contingent workforce ecosystem. By comparing key performance metrics against established benchmarks, organizations can strengthen valuable partnerships while swiftly terminating underperforming ones, resulting in cost reduction and improved decision-making.

Day-to-Day Operations Use

There are a lot of reasons to think of data much like you would any other product. The importance of data in a contingent workforce program represents a key shift from instinct-driven cultures, and it means finding ways to maximize the asset just as you would any other.

  • Cycle time: Accurate cycle time estimation is tied to everything from non-employee requisition submittal, time to interview, worker selection, to final returns. Managers need to evaluate how much time is needed for different milestones in the cycle so they can set proper expectations on how quickly a worker can start once a requisition is submitted. This is the only way to streamline the contingent workforce process. 
  • Contractor management: It’s easiest to coach when you can measure. Better daily data can help identify areas of excellence and areas for improvement for each contractor in your organization. 
  • Market comparative analysis: From rates to market trends, daily data can be used to assess how supply and demand is fluctuating from day to day. Proper rate analysis can reduce the number of unpleasant surprises for your contingent workforce, and market trend analysis can help you prepare for changing needs in your industry.
  • Supplier organization: While you may only have so much control over a third party, better data can show you where the cracks are. Whether you’re overpaying or facing multiple missed deadlines, more information means stronger performance evaluations, so you can make better decisions.

You Need the Proper Tools

If you’re wondering how you’re going to keep up with all of this analysis in the midst of the rest of your workload, it may help to know there are automation tools available. A vendor management system (VMS) is designed to take care of the daily drudgery that can easily fall by the wayside when you’re in the thick of things. For all the data flowing through your many processes, you can harness and leverage it to build stronger operations.

You can also consider how a managed service provider (MSP) would find creative solutions based on your organization’s needs. The importance of data in a contingent workforce program cannot be overstated and neither can the systems, tools, and labor it takes to put it all together. An MSP is used to the intricacies of contingent workforce management, particularly as it relates to their clients’ data and metrics. If you’re looking for a team that will strip down the data to what you need to know, Monument Consulting can help you see the big picture so you can reduce the time, money, and energy you spend on your contingent workforce.