How to conduct a contingent workforce audit: a 12-check list
To conduct a contingent workforce audit, build one reconciled list of every non-employee working for you, then test each person against twelve checks: owner, engagement type…
What is a contingent workforce? It is everyone who does work for your company without being on your payroll as an employee. Independent contractors, freelancers, temps supplied by a staffing agency and consultants delivering against a statement of work (SOW) all count. Whether interns, seasonal hires and people employed for you by an employer of record (EOR) count depends on who pays them and who directs their work, which is why the contingent workforce definition deserves more care than it usually gets. Contingent labor is the same group seen from the budget line.
Contingent workforce management is the day-to-day running of that group: onboarding, rates, approvals, invoices and the last day of each engagement. Contingent workforce strategy is the set of decisions above it: which work you hire for, which you contract, which you outsource, and how you run the suppliers in between.
My position is that most mid-market companies do not have a strategy problem yet. They have a counting problem. Ask three departments for the contingent workforce meaning they work with and you get three different lists. Ask finance how many non-employees were paid last quarter and you will get a number. Ask how many are working today, under which contract, at what rate and until when, and you will get a week of spreadsheet archaeology. Every strategy question depends on that list: build or borrow, one supplier or five, whether you need a vendor management system (VMS) at all. Without the list, strategy is a slide.
So the posts in this topic start from the list. They cover how to audit a contingent workforce you inherited, how to sort worker types when the labels overlap, when a spreadsheet stops being enough, and how to set up a first program in an order that keeps finance and HR on speaking terms. Where I use a framework, it is ours and I say so. Where I use a number, it comes from a named source or from arithmetic you can redo.
I am writing for the procurement, HR or finance lead who has just been told the contractors are now their problem, and who would like to answer the next board question without opening five spreadsheets.