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Insights about the Extended Workforce

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How to measure the success of your contingent worker program

Apr 17, 2019


Metrics are powerful tools -- and they're critical to managing and optimizing your contract workforce program, yet the data doesn’t automatically convert to better results.

Whether you're tracking the wrong KPI's (Key Performance Indicators) or failing to use the numbers strategically, mis-managing metrics can, and will, lead your organization in the complete opposite direction of where it needs to be to remain competitive in today's gig economy. 

Global spend on contingent labour is estimated at just under $300 billion. Yet, even as this number is expected to explode within the coming decade, nearly 60 per cent of these costs is unaccounted for in financial planning, forecasting and annul budgets within the average organization.

This begs the question:
What types of metrics will help you better manage contingent spend?

There are many different KPI's organizations can use, and learning how to identify and leverage the data will take time and experience; however, it's imperative that the ones you choose directly reflect the goals your organization has set for its contingent worker program. Typically, these goals involve: cost, quality, efficiency, and risk.

Whether your organization operates a mature contingent workforce or has recently engaged contract workers, here is a list of KPI's you should be thinking about:


Saving on costs is a consistent factor in contract workforce management, with organizations ranking contingent workforce costs as a top five spend category. However, cost management does't just include bill rate and governance -- but the total costs of the overall program. This means tracking things like:

• Competitive candidate pay rates
• Percentage of rate-card compliant workers vs. non-compliant workers
• Talent acquisition and turnover
• Program tools and resources
• Software
• Data management and analysis
• Office resources and supplies
• Uncontained risks/non-compliance fines and penalties
• Vendor rates
• Overtime costs
• Conversion fees
• Spend forecast

Aligning HR and Procurement for a more cost-effective contingent workforce program

One of the most costly oversights in organizations with a contingent worker program is that many lack category management—still working in silos. Typically, gig workers are engaged by an organization’s Procurement function -- outside of Human Resources and traditional talent sourcing processes, yet the requisitioner often lacks benchmark data for what the services should cost. Without market-based rates for comparison or access to historical data on how the organization has negotiated payment for similar engagements, companies are often left overpaying for resources.

Furthermore, many contingent workers are engaged through a pre-existing relationship with a service provider, yet lax communication between departments can be costly.

If an organization needs to hire a highly-skilled specialist, for example, Human Resources may enlist an outside recruiting firm to help source the talent. The HR team spends time working with the firm from sourcing to onboarding without consulting Procurement. Had the two functions collaborated from the beginning, HR would be aware that the organization already had a relationship with a preferred vendor and could have acquired a highly skilled worker at a much lower cost— leaving room in the budget for future strategic hires.


Fifty-three per cent of organizations list quality as a top factor in their contract workforce program, and 78 per cent select it as one of their top three considerations. Typically, quality objectives can be broken down and measures in three categories:
1. Program operations
2. Talent services
3. Vendor services

Program operations
Acquiring and managing contingent talent can be a time consuming and very rewarding process-- even for organizations with a solid program; it’s important to track the quality of things like:

Job descriptions and submission rates
• Number of applicants
• Placed talent vs. rejected candidates
• Number of times a job description has been re-written
• Changes made to skills and qualifications sections

Supervisor or manager performance
• Time to fill
• Retention
• Which managers are the best at spotting and developing talent and which ones fall short?
• Manager evaluation  

Thirty-eight per cent of organizations list service quality as one of their top three considerations. Yet many still aren’t measuring it. Talent quality can be measured by tracking things like:
• Manager satisfaction
• Percentage of completed assignments on time and on budget
• Early contract terminations
• Contract extensions
• Worker evaluations
• Would you re-hire this worker or recommend for another role?

Vendor services
Whether your organization has been operating a contingent worker program for years or you’ve recently been engaged a Managed Service Provider (MSP), it’s important to track the factors that drive a successful program. You should be tracking things like:
• Requisition inquiries
• Responsiveness
• Fill rate
• Time to hire
• Resume to job opening and resume to interview rate
• Talent quality
• Worker dis-engagement
• Percentage of candidates that complete pre-assignment documentation, background checks, drug screenings and other required documentation.
• Rate card adherence
• Results of compliance audits


Measuring the efficiency of your contingent worker program involves tracking the speed, accuracy and success rates of various processes and establishing accountability among the parties responsible. Typically, these parties include: hiring managers, vendors and talent.

Hiring managers
• Time to fill
• Time to respond or approve
• Worker evaluations: Are they being completed? How often and how long do they take?
• Worker onboarding and offboarding

• Candidate quality and speed of submittal
• Accuracy of candidate qualifications
• Candidate engagement
• Onboarding and offboarding
• Compliance
• Invoicing and payment
• Financial/transaction reporting

• Early contract terminations
• Contract extensions
• Percentage of completed assignments on time and on budget
• Manager satisfaction rates


Identifying and mitigating areas of risk in your contingent worker program is critical to avoiding the unforgiving fines and penalties of non-compliance. To keep compliant, it’s important to track things like:

• Worker misclassification
• Criminal behavior
• Counterparty risk
• Employer standards compliance
• Code of Conduct
• Financial irregularities
• Co-employment

The role of a Vendor Management System

A Vendor Management System (VMS) will help organizations manage their contingent workforce far more efficiently and cost effectively. The technology will automate talent acquisition, onboarding, offboarding and payroll workflows for greater control and visibility into data. It’s estimated that organizations that implement a VMS reduce contingent workforce costs by 10 to 25 per cent.

The role of a staffing agency

Staffing firms have a role to play—both in meeting clients’ changing skills requirements and committing their their resources to researching, vetting and implementing technologies and processes that create value to their clients, candidates, talent and partners.

As a trusted partner, Procom is committed to advising our clients on the best solutions available to meet their business goals and deliver innovative services that transform how they acquire and manage talent.

Mismanaging KPI's isn't the only risk organizations face when managing a contingent workforce. If you're interested in engaging contingent talent, or want deeper insights into how to manage the risks posed by your current program, download our free whitepaper: A Checklist for Contingent Worker Risk:   


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