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Role of Technology in Contingent Labor Market

Rangam Aug 8, 2023 5:50:48 AM
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Hiring of contingent labor has significantly risen in almost all industries in the past few years. Human resource (HR) experts have predicted that the contingent labor market would increase manifold in the days ahead, with companies all set to hire hyper-specialized staff for their operations. That aside, in an uncertain economic scenario, a contingent workforce lends greater flexibility to work.

Effective contingent labor management calls for the proper use of technology in tracking, monitoring, managing, and paying the workforce. Utilization of digital tools can help in maximizing productivity and decreasing compliance risk, besides streamlining operations. While HR software programs have the basic tools to meet compliance requirements including tracking and payment, companies are now looking for more sophisticated tools with detailed options, in order to better manage contingent staff.

Vendor management systems

All-in-one vendor management systems offer automated solutions that help the HR department track contract laborers, suppliers, and temporary workers. Most of these systems are cloud-based and comprise tools to track the hours worked and deliverables, measure staff performance, identify potential issues, and predict future requirements.

A vendor management software allows a company to reduce its labor cost, increase efficiency, and align contingent workers to the projects. The use of technology forges transparency in all areas, bolsters analytics and reporting, and provides an automated hub to manage the daily operations.

The piecemeal approach

Some companies, however, prefer to take a piecemeal approach towards contingent labor management. Instead of a single software, a company may adopt multiple technologies and diverse tools to manage separate but interrelated aspects of contingent labor. For instance, individual software solutions can be used for payroll, sourcing and recruiting, industry compliance, online training, and recording attendance.

Using individual technologies for each contingent labor component is more effective than a completely manual approach. While it may not be as effective as an exhaustive contingent labor management software, it can still meet the purpose if the different technologies are integrated properly. Lack of integration often leads to increased errors, duplication of work, and miscommunication, among other issues.

Integration is the key

Whether an organization uses a complete vendor management system or deploys multiple standalone programs, integration of data is extremely important for effective management of contingent labor. Sans proper integration, managing a contingent labor force becomes time-consuming and difficult. With all the relevant data in one place, tracking and measuring performance and cost metrics becomes easy. The intelligence gleaned from an integrated contingent labor management solution helps an organization budget, plan, and properly forecast to improve its overall efficiency.

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