With workloads and budget constraints increasing, many companies may feel like they’re in a pinch when it comes to filling talent gaps and boosting their teams’ capabilities.

That’s why more organizations are now turning to contingent labor to address those gaps and improve efficiency. Contingent labor is a workforce solution that’s been growing in popularity in recent years. It involves companies employing skilled workers in temporary roles.

While these programs can be highly effective, they need to be implemented correctly. So how can you measure the success of your contingent staffing program? In this blog, we’ll explain how you can determine whether your program is working, which metrics you should track, and what to do if your program isn’t driving the results you need.

Why It’s So Important to Evaluate Your Contingent Workforce

It’s crucial to regularly measure the success of your contingent labor program. Doing so helps to ensure the program is aligned with your company’s goals.

If you’re working with a staffing firm, it’s also a good way to check that you’re getting the level of service you’re paying for.

Whether you’re employing a contingent workforce using your own resources or working with a provider, our talent experts at Acara recommend regular evaluations – every six to 12 months or so.

Now let’s get into the metrics you should look at during those evaluations.

Metric 1: Efficiency

There are many factors to consider when assessing the efficiency of your labor program. Here are some questions you can ask yourself:

What’s the time-to-fill?

Sometimes, filling a role takes a long time. The average time to find a quality candidate is around 41 days.

However, having the right staffing firm can reduce the search time and get your positions filled with qualified workers faster. Check out our cost of vacancy calculator to learn how much having unfilled positions on your team is setting you back.

Is the onboarding process seamless and fast-tracked?

Measuring onboarding time will help give you an understanding of how long it takes contingent workers to start contributing and can uncover process improvements. Having a standard operating procedure (SOP) for onboarding will ensure your temporary workers can get up to speed quickly on your company, needs, and goals.

Is your current contingent labor program putting strain on your HR team?

Just like with full-time employees, contingent workers come with time-consuming administrative tasks – from recruitment and onboarding to contracts and performance management. Many HR departments are already stretched thin with full-time employees and day-to-day tasks, so it’s important they don’t feel even more overwhelmed with a contingent workforce.

The right staffing firm will manage the entire contingent staffing lifecycle, including sourcing and screening, interviews, compliance, and onboarding. This will free up your internal HR team so they can focus on more important tasks.

Metric 2: Quality

Beyond efficiency, it’s important to check that your contingent staffing program is yielding high-quality workers. Ask yourself these questions to determine the quality of your program and workers:

Do the candidates fit your requirements and qualifications?

Your contingent staffing firm should provide candidates who are ready to come in and make an immediate difference for you. The contingent worker candidates being sourced should fit all of the requirements and qualifications you laid out so they can effectively perform the duties they were hired for.

If you’re declining a significant number of candidates being sourced by your provider and your interview-to-hire rate is low, it may be time to find a new partner who better understands your needs.

Are contingent workers meeting your needs?

Short-term employees should effectively fill talent gaps on your team and provide skills your regular workforce may lack. You should regularly evaluate the work your contingent employees are completing to ensure it’s up to your standards.

Sending surveys or performance evaluations to managers will help you better understand how well contingent workers are performing.

Do you have high turnover?

Tracking retention of your contingent workforce is important. High turnover could mean there’s a misalignment between the contingent worker and the role. This could also be the sign of a deeper issue – that you and your staffing firm aren’t aligned.

An experienced staffing firm will ensure they fully understand your organization and its labor needs so they can source and place suitable contingent workers.

Metric 3: Cost

One of the biggest things you’ll want to evaluate regularly is the cost effectiveness of your program. Having a clear understanding of cost-per-hire, conversion fees, and the underlying markup will allow you to understand the true cost of your contingent workforce.

To ensure you’re not going over budget, you should ask yourself these questions:

What’s the cost per hire?

If your internal teams are managing the recruitment of contract personnel, you need to keep in mind everything that went into acquiring a candidate, including advertising costs, screening costs, onboarding tasks, and administrative expenses.

While it might seem like working with a staffing firm could cost more, the right contingent staffing provider will actually help you save money. They’ll use their resources, experience, and talent pool to find better candidates in a timely manner and often at a lower cost per hire.

Are the conversion fees affordable?

The great part about using contingent workers is you can hire them full-time if they’re a good fit within your company, however most agencies charge a conversion fee depending on how long the worker has been on assignment.

It’s always a good idea to evaluate the contract-to-hire policy your staffing firm offers.

Does your program ensure compliance?

Successful contingent workforce programs will have a thorough understanding of the laws and regulations related to the provision of contingent employees. This will help avoid penalties and costly fines related to misclassification, wage and hour issues, immigration, and health and safety regulations.

When you work with a staffing firm, much of the risk shifts to your provider since they are the employer of record. Making sure that your staffing firm is reputable and up to date on legal requirements is essential in managing risk and reducing costs.

Metric 4: Flexibility

Keep in mind that flexible, temporary labor plans should readily flex to fluctuations in your business needs. This includes scaling up or down in response to seasonal demand, supporting new projects or initiatives requiring specialized skills, and covering unexpected employee turnover or absences to maintain operations.

Consider these questions to find out if the flexibility of your process is working:

Has the program been able to flex to support changing needs?

If your contingent staffing solution can’t flex with you as your needs change, you may want to consider partnering with a different staffing firm. The right staffing firm will be able to scale your program up and down as needed.

A good staffing firm will also consistently share metrics, best practices, and labor solutions with their customers.

Is the solution tailored specifically to your company?

Your contingent labor program should be designed for you and be based on your challenges, needs, and company culture.

The right staffing firm will adapt and tailor successful strategies to fit your organization and make changes as needed to support your goals.

What to Do With Your Results

Once you’ve gathered key metrics like time-to-fill, cost-per-hire, conversion fees, and onboarding time, you should have a better idea of how your contingent labor program is performing – and whether it’s time for a change.

Remember, the right strategy will significantly enhance your team’s capabilities while optimizing costs and freeing up your internal resources. If you’re not seeing those results, it might be time to find a different staffing solution – or at least a different provider who can meet your needs.

If you’re looking for a staffing firm to help you navigate the complexities of contingent labor, reach out to Acara Solutions. We’ll get to know you and help design and implement a program that aligns with your unique business needs.