5 Ways to Control Your Contingent Labor Costs

Contingent Labor Costs

The way in which companies utilize temporary workers today barely resembles the way they used “temps” just a few decades ago. Companies seek short-term, contract workers for an endless number of strategic reasons, and the U.S. Government Accountability Office reports that contingent workers now make up 40 percent of the workforce in the US.  Since organizational need for short-term workers shows no signs of slowing, it is necessary for HR teams to evaluate the costs of working with these employees. Without proper oversight and control, contingent labor costs can quickly spiral out of control.

One: Get A Handle on Indirect Costs

Offering a litany of benefits to contingent workers can be a good recruiting tool, but it eats up overhead and can have a significant impact on taxes.  If your company values the idea of providing temporary or contingent workers with benefits, choose instead to work with a staffing firm that provides employee benefits to its pool of talent. This will keep your costs fixed and will virtually eliminate hidden and indirect costs, while adhering to organizational values.


Two: Reduce Screening Costs

Are you footing the bill for drug testing, background checks and other screenings for your contingent workforce? Stop. Reputable staffing firms offer screening as part of their service offering to clients. This not only eliminates excess costs, but it also reduces the man hours that HR has to spend on the administrative tasks associated with screening, freeing them to focus on more strategic tasks.


Three: Pay Only For What You Need

Overestimating or underestimating the requirements for a temporary position will almost always lead to poor hiring choices that can cost you double what it would have taken to properly estimate the requirements and find just the right person for the job.  The most efficient way to do this is to work with a staffing partner that can help you evaluate exactly what you need and can connect you with your ideal match. This assures that you are paying fair market rates for the precise skills you’re looking for.


Four: Be More Flexible With Contracts

If your company has imposed strict limits on tenure length for contingent staff, it’s time to lessen those restrictions. If a talented temporary employee is killing it in his role, but must leave in 60 days regardless of a continued uptick in demand, you’ll lose money by starting over to find his replacement. Instead, work with staffing experts who can help estimate the true length of tenure for any given project or scenario so that you can get the most out of a talented short-term employee and manage costs.


Five: Choose Partners Well

Any staffing agency can say that they will help you control and/or reduce contingent labor costs, but it takes time and research to choose a partner that truly can deliver on these promises. When evaluating potential staffing partners, look for companies that can provide hard data to support their claims, and who are willing to provide references from companies similar to yours, so that you can make the right choice for your top and bottom lines.


If you are looking to work with a strategic staffing firm that can help you manage costs while ensuring access to the best and brightest talent, CSS is here to help. We have been successfully helping businesses achieve their goals since 1994.  If you are ready to partner with a true market leader, reach out to CSS today.