What Is Contingent Workforce Management or CWM?
Contingent Workforce Management (CWM) is a fully managed service that oversees the acquisition, management, and payment of temporary workers. A CWM solution consists of three essential components:
- Your CWM provider: Your CWM provider serves as a strategic partner, ensuring you access top talent, cost efficiency, and process optimization.
- Suppliers or vendors: External staffing agencies that partner with the CWM provider. They play a crucial role in the program by delivering well-qualified candidates for the client's job openings.
- Vendor Management System (VMS): Specialized software designed to streamline processes, improve visibility and tracking, and generate cost savings. It provides a comprehensive overview of your contingent workforce's demand, supply, and performance.
Why Choose a CWM Solution?
A Contingent Workforce Management partnership is a strategic collaboration aimed at streamlining the deployment of high-quality contingent talent while ensuring timeliness and cost-effectiveness. While there are numerous benefits to a Contingent Workforce Management program, some of the most cited include:
- Centralized management
- Enhanced visibility
- Access to top-tier talent
- Workforce scaling
- Diversity, Equity, and Inclusion (DE&I)
- Compliance assurance
- Hard and soft cost savings
- Cost avoidance
What Is the Difference Between MSP and CWM?
You may have encountered the term Managed Service Provider (MSP) in your search for a Contingent Workforce Management solution. In practice, CWM and MSP are synonymous, though specific usage varies from one company to another.
MSP is a broad term for managed services, often referring to the outsourced management of a company's contingent workforce. In the realm of IT and technology, an MSP is a company that remotely manages a customer's IT infrastructure and end-user systems. In contrast, CWM specifically focuses on the management of temporary or contingent workers.
How Do CWM Providers Source Talent?
Sourcing models define how CWM providers collaborate with suppliers to secure contingent talent. These models include:
- Master Vendor: The CWM provider designates a primary supplier as the first choice for fulfilling contingent workforce needs. If needed, secondary vendors are used as backup, ensuring consistent service quality.
- Primary Supplier: Similar to the Master Vendor model, but workforce needs are distributed among a select group of primary suppliers, offering diversity while maintaining trusted relationships.
- Structured Tiers: Suppliers are categorized into tiers based on performance, capabilities, and pricing. Orders are allocated based on tier, reflecting complexity and supplier capabilities.
- Vendor Neutral: Suppliers bid on specific requirements, competing based on candidate quality, pricing, and availability. This promotes fairness, cost-efficiency, and quality.
- Hybrid: Combines aspects of various models, such as Master Vendor and Vendor Neutral, for flexibility in addressing specialized and less specialized roles.
CWM providers can integrate multiple sourcing models into a single program, optimizing contingent workforce management to meet evolving organizational needs. These models offer flexibility, and your CWM provider can recommend the most effective model(s) based on specific requirements and industry expertise.
Are CWM Solutions Cost-Effective?
CWM partners prioritize cost reduction and efficiency in their services. Cost components of a CWM program include expenses for the CWM team, their services, and VMS technology. Costs may vary based on:
- Program scope, complexity, and scale
- Industry-specific needs
- Geographic reach
CWM pricing models ensure cost predictability, incentivize performance, and align with clients' goals. They include:
- Client-Funded Model: Clients pay for CWM management through a Percentage of Spend (PoS) or Fixed Fee. This model ties costs to performance, encouraging results-driven service.
- Supplier-Funded Model (or Vendor-Funded): CWM providers deduct fees from supplier invoices to cover costs, ensuring rates remain competitive. Suppliers benefit from streamlined processes and preferred supplier status.
- Hybrid Model: Costs are shared between clients and suppliers, customized based on program needs and agreements.
- Customized Pricing: Large, complex organizations can receive custom pricing based on detailed assessments of their unique requirements and objectives.
Preparing for a CWM Solution
To harness the full benefits of a Contingent Workforce Management solution, businesses should assess their readiness to collaborate with a CWM provider. The adoption of a CWM solution can profoundly affect several aspects of your organization, such as its culture, how it handles change, its supplier relationships, and how end-users are impacted.
To ensure a smooth implementation and achieve outstanding results when contemplating a CWM solution, consider the following questions:
- What are your workforce needs?
- Who are the key end-users?
- Who are the key internal stakeholders?
- Building consensus
- Assessing organizational change readiness
About LevelUP
LevelUP HCS is one of the largest privately-owned certified minority business enterprises (MBE) and talent solution providers in the marketplace today. Unlike other agencies, we focus on providing sustainable talent solutions that cultivate your employer brand, protect DE&I in the workplace, and exceed your company goals.
We provide industry and subject matter experts to help your organization thrive and meet the evolving talent and HR challenges you may face. As a certified diverse supplier, we can provide Tier 1 credits for your organization.
