Racing to capture all the cost-saving and productivity advantages an agile workforce provides, work organizations need to expand their programs to encompass more sophisticated and complex types of external talent. They often find themselves striving to create efficiencies in three key areas:
- Management and Oversight – Centralizing the contingent workforce requisition, management, and payment processes establishes controls, standardized operating procedures, and clear responsibilities for all stakeholders. Following a framework gives organizations a basis for comparing each labor type category they can use to assign the right procurement method to each type of project
- Project Transparency – At its highest level, businesses harness outside talent in the form of independent contractors and statement of work consultants in order to ensure effective project delivery. To understand their spending, return on investment, and other key performance indicators, these firms need to be able to drill into cost centers and productivity measures.
- Forecasting and Analysis. Companies must capture data, calculate performance scores, and quantify work rule compliance to gain insights needed to reliably forecast labor demand and prepare for continuing improvement. Knowing which spend represents justifiable investments provides the visibility firms need to better allocate funds, management expertise, and vendor contract administration.
Making strides in each of these areas will position companies to maximize the benefits they reap from independent contractors, SOW consultants, and other forms of contingent labor. For firms in the early stages of workforce management modeling, it will lay a foundation for deciding how to expand their program. Owing to limited resources and experience, companies with immature workforce models may be able to expand only incrementally. Building these processes illuminates the right choices such as whether to incorporate spend on independent contractors or SOW talent during the first round of expansion.
Several considerations factor into this critical decision that will dictate how a company’s program grows, evolves, and aligns with its overall mission and strategy. To start, it is helpful to define the types of workers that may play a role in managing projects and implementing solutions. Independent contractors are, of course, independent. They are self-employed and in demand because they possess specialized skills that companies need regularly. Their expertise and experience gives them the tools they need to accomplish their tasks with little supervision. They negotiate their own contracts, including compensation, deadlines, and scopes of work. They often are paid by the project or by the day to complete tactical, rather than strategic, projects such as a marketing campaign, mobile application development, or market analysis.
SOW consultants, on the other hand, often work for and are paid by an SOW provider (which charges the company enough to cover this salary as well as overhead and profit). This vendor assigns the most qualified and best-fitting project managers to the client’s task, often assuming the risk for timely, successful project completion. These consultants often handle strategic, mission-critical assignments – sometimes leading teams of full-time employees, freelancers, and other types of labor.
Companies that hire independent contractors often do so because the assignments they need help with are short-term and involve hands-on skills. Their motivation likely is to keep costs low and retain the ability to adjust their labor force according to demand and market opportunities rather than hiring full-time employees and taking on salary and benefit expenses. SOW consultants usually bring more “big picture” management acumen for logistics, delegation, scheduling, change management, implementation, etc. Their projects usually cover longer time frames. Companies that engage these leaders are more concerned with obtaining and leveraging scarce skillsets that they can apply occasionally.
These distinctions, however, are not absolute. Different companies facing the same project types may decide to expand their contingent workforces differently, according to many other factors. If you are ready to expand your workforce metrics to incorporate additional spend, it is important to determine not only they types of projects you typically undertake, but also the constraints you’re working under and the competencies you can harness from your staff and/or a workforce managed service provider (MSP). Ask yourself these questions:
- Are we confident we can correctly classify contingent workers, complying with labor and payment regulations?
- Do we have policies in place that would limit the duration a contingent worker can be engaged on a project?
- Do we have the administrative support and the technical and management infrastructure to warrant an expansion?
- Can we (and do we want to) develop milestones and scopes of work that are minutely detailed and tightly defined?
- Can the work be performed off-site, during irregular hours?
- Are we able to locate, attract, vet, and negotiate terms with non-traditional workers?
Metasys is famous for an obsessive commitment to customer service. Whether you’re interested in expanding your workforce management model to include SOW, independent contractors, or other types of contingent workers, our sophisticated platform and experienced professionals combine to give you a comprehensive resource for putting the right person in the right position. Metasys can handle talent providers, compliance, payroll, and other tricky issues that accompany a scaling project for workforce control. Contact Metasys today to explore how we can help you take the right steps toward building out your program.
