5 Ways to Keep Your Contingent Labor Costs Under Control

Contingent Labor Costs


These days, ‘temps’ aren’t just temps anymore. Freelancers, temporary staffers, and independent consultants/contractors — otherwise known as the contingent workforce — now make up 40.4 percent of the country’s workforce, this according to a U.S. Government Accountability Office report.

Whether or not the rise of non-secure jobs is a good thing or not is another discussion. What’s clear is that the popularity of contingent workers among employers is growing. And with it comes a new set of challenges for controlling costs.

Here are five ways to keep your contingent labor costs from spiraling out of control.

Partner With a Reliable Staffing Vendor

If your company is like many others, your workforce is probably one of the biggest fixed costs on your profit and loss statement. By now, you already know how a contingent workforce will help bring core staff costs down.

But this strategy only works if you actually hire reliable temporary staff. This is where a trusted staffing services company comes in, which will provide you with skilled temporary personnel who can keep up with your production demands.

Choose the Right Staff According to Their Roles

Many hiring managers make the mistake of hiring tenured contractors, thinking that they’re guaranteed to be successful hires. What they don’t expect is that senior-level contractors may be bored with the project and leave for something more challenging.

This highlights the importance of hiring candidates with experience that matches your job descriptions and required skills. Tenure is great and all, but make sure a candidate’s level of experience matches the demands of the role.

Be Wary of Burnout Costs

Many companies make the mistake of abusing their temporary staff, thinking that they can get more work out of them because they’re desperate for a job. You need to let go of this stereotype. Temporary employees work just as hard as regular staff do, and deserve to be compensated fairly and given reasonable workloads.

Shift Hiring Costs to Staffing Firms

One of the core benefits of working with staffing agencies is that you get to transfer the cost of hiring people directly to them. These costs include processing hires, as well as managing payroll and benefits.

Reduce Training Costs by Investing in Skilled Workers

You may be tempted to hire fresh graduates to fill in core positions as temps, but be warned that this strategy has a high chance of backfiring. New grads still require training, which doesn’t come cheap. In addition, you also need to consider the ‘soft’ costs of hiring novice staff: Low productivity and poor quality.

Work with a staffing firm to find skilled talent — preferably those who have experience in the gig or independent contractor economy. For more workforce management guides like this, talk to the staffing experts of Star Staffing!