Cost savings without compromise: strategies for contingent labor

Indeed Flex

3 February 2025

3 min read

Today more than ever, businesses must look to cut costs without sacrificing the quality or flexibility of their workforce. Contingent labor — offering adaptability in uncertain markets — can quickly become a financial drain if not managed effectively. However, with the right approach and tools like Vendor Management Systems (VMS), organizations can better manage costs while maintaining workforce quality and compliance.

The cost of poor contingent labor management

Without proper oversight, the use of contingent workers can lead to inefficiencies and unnecessary spending. Unauthorized hiring, inconsistent pay rates, and slow hiring processes drive up costs. Meanwhile, compliance risks such as worker misclassification or missed regulatory requirements can result in fines and reputational damage.

Fragmented systems and manual workflows further complicate managing a contingent workforce, making it difficult to track spending, measure performance, or scale effectively. These issues highlight the need for a streamlined, technology-led approach.

Strategies to save costs without sacrificing quality

1. Centralize labor management

Managing a contingent workforce centrally creates consistency and clarity. A VMS allows businesses to consolidate supplier data, standardize rates, and simplify invoicing. This centralized view ensures greater control, eliminating unnecessary spend and inefficiencies.

2. Build strong vendor partnerships

Clear performance metrics, such as fulfillment rates and worker quality scores, make it easier to hold vendors accountable. A VMS enables businesses to benchmark suppliers, negotiate better terms, and increase competition without compromising worker quality.

3. Match rates to market demand

Labor costs fluctuate with market conditions. Dynamic rate management ensures you pay the right rate for the role, avoiding overspending while staying competitive in attracting contingent workers.

4. Streamline processes with technology

Automating processes like candidate matching, onboarding, and compliance tracking reduces administrative burden and hiring delays. Tools like Flex Plus go further by using AI to find the right contingent workers faster and improve overall workforce efficiency.

5. Prioritize compliance

Regulatory requirements can be complex, but non-compliance is costly. A VMS ensures contingent workers are classified correctly, tracks adherence to local laws, and creates an audit trail to reduce risks.

6. Gain full visibility

A fragmented approach to workforce management makes it difficult to track costs or measure effectiveness. Real-time analytics in a VMS allow businesses to see where they’re overspending, identify opportunities for improvement, and plan effectively for future needs.

How VMS technology delivers results

Platforms like Flex Plus transform managing a contingent workforce by offering clear oversight, streamlining processes, and improving decision-making. These tools centralize data, track supplier performance, and automate workflows, making it easier to reduce costs without sacrificing quality.

By providing real-time insights into workforce performance, rates, and demand trends, VMS technology helps businesses stay competitive while controlling spend and ensuring compliance.

Cost savings made simple

Saving on contingent labor doesn’t mean cutting corners. With the right tools and strategies, businesses can reduce costs, improve efficiency, and maintain the quality and flexibility they need to succeed.

A streamlined, technology-enabled approach allows organizations to balance their budget while meeting workforce demands. By centralizing management, holding suppliers accountable, and using real-time data, businesses can push on in even the most uncertain markets.

Cost savings without compromise are achievable — and essential — for businesses looking to compete in a crowded marketplace.

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