Why Direct and Contingent Workforce Outsourcing Are the Best Ways to Hire

May 17, 2022
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Direct and contingent workforce sourcing helps companies source employees in new and cost-effective ways

Deloitte’s Global Outsourcing Survey 2020 revealed that 70% of surveyed decision-makers said cost reduction is the major driving factor for outsourcing. With no clear economic recovery following the COVID-19 pandemic and geopolitical events, companies see direct and contingent workforce outsourcing as a practical way to source talent

Cost as a Main Driver of Contingent Workforce Outsourcing

Deloitte's report observed that cost savings had climbed back to the top as the main objective for outsourcing workers. While it has taken a step back in the past in favor of more pertinent agendas such as business agility and customer service, cost savings is again uppermost in the minds of business owners eyeing the global economy for signs of recession. 

Together with the uncertainty created by recent geopolitical events, these statistics have left businesses wary of increasing the in-house workforce in case business operations take another hit from unforeseen directions. 

Secondary objectives for outsourcing workers include flexibility (40%), speed to market (20%), access to tools/processes (15%), and agility (15%). 

In light of an unpredictable global business climate, direct and contingent workforce outsourcing makes sense as the best way to hire. Here are three reasons why.

Better Workforce Planning

Contingent workforce sourcing enables companies to plan and deploy their workforce according to actual needs instead of speculative labor requirement forecasts. Efficient workforce planning helps businesses:

Avoid overhiring. Employers can avoid the mistake of engaging in long-time contracts (sometimes with no definite duration) in the face of fluctuating demand. While human capital remains the backbone of most if not all modern businesses, it needs to yield profit the same as any other type of investment. When consumer demand falls in a period of expected business growth, unused human capital can represent an economic value of zero. 

Avoid unnecessary restructuring. When companies can no longer bear the brunt of labor expenses due to low demand, lay-offs and restructuring can take employees unawares. In some cases, company leadership also proves to be unprepared for major organizational changes. Productivity and profitability are often affected during restructuring, not to mention company morale.

A better way to manage the company workforce is to plan according to need. Businesses can bring in more contingent workers when business operations need extra manpower or special expertise. Businesses can scale back when demand is low and not shoulder unnecessary labor expenses. Having a contingent workforce on-demand can mean success and survival for some companies, especially startups and smaller SMEs that operate on smaller budgets.

Better Productivity

Another way direct and contingent workforce sourcing helps companies is through increasing in-house productivity. Direct workforce sourcing shoulders many overhead expenses and responsibilities, including equipment, staffing, and professional services. Contingent workforce sourcing supplies talent and expertise that could be expensive to acquire and maintain in the long run. By outsourcing, businesses can better allocate resources and in-house talent to more productive areas. 

Contingent workforce outsourcing also lessens the organizational burden of company leadership so they can focus on strategy and increasing sales. 

Lastly, direct and contingent workforce outsourcing increases productivity by maintaining operations even when regular staff is on holiday or vacation. In case of sick leave and emergencies, specialized outsourced staff can take over to ensure business goals and deadlines are met. 

Better Focus on Skill and Expertise

Finally, contingent workforce outsourcing allows companies to focus on skill and expertise. Companies have more choices thanks to a wider pool of accessible talent that would otherwise be outside their reach.

Since both client companies and outsourced workforces agree to a non-permanent working commitment, there is a sharper focus on skill and expertise and less on personality and background preference. In some cases, this can open the way for a more conscious implementation of workplace diversity goals.

Direct and contingent workforce sourcing helps companies source employees in new and cost-effective ways. Contingent workforce sourcing enables businesses to avoid overhiring and restructuring due to inefficient workforce planning. Relying on contingent workforces increases in-house productivity by relieving certain overhead costs and responsibilities. This approach also helps maintain business operations even when regular staff are on leave or vacation. Lastly, contingent workforce sourcing highlights skill and expertise instead of personal preferences as the basis of a working relationship. 

Hire Better With Contingent Workforce Outsourcing

Filtered offers contingent workforce outsourcing solutions for corporate staffing needs. Check out our platform benefits:

  • ATS integration: standardized candidate qualifications for MSP’s
  • Accountability: enable progress tracking and status updates
  • One-to-many submission: qualified candidates are matched to relevant open positions

We are proud to say that we have helped companies identify 5.5 times more qualified candidates, increased interview-to-hire from 4% to 60%, and shortened time-to-fill from 35 days to 12 days. 

Filtered is a leader in skill-based, data-driven recruiting technology. Our end-to-end technical hiring platform enables you to spend time reviewing only the most qualified candidates, putting skills and aptitude at the forefront of your decisions. We’ll help you automate hiring while also applying objective, data-driven techniques to consistently and confidently select the right candidates. To get started, contact our team today or register for a FREE demo