Contingent workforce programs are under constant pressure to reduce their costs. One significant line item is spend through staffing suppliers. But according to SIA’s recent The True Cost of Hiring report, if all non-tangible costs are included, the difference between talent acquisition recruiting and a staffing company’s costs is only about $500. In other words, if the costs of talent acquisition are the same regardless of who is doing the recruiting, then the margins are tight when it comes to how much suppliers can reduce their rates.  

And if this is the case, then what are other creative ways contingent workforce program owners can save their organizations money without relying on their suppliers?  

Here are a few easy strategies that will help you reduce costs without impacting your suppliers: 

Reexamine role requirements. What skills and experience do your job descriptions say are necessary for temporary roles? Often, companies may default to higher-level qualifications than a role actually requires, which inadvertently increases the bill rate. Aligning job requirements with actual business needs can bring down costs while ensuring the talent is qualified. An easy example of this is the college education requirement. Skills-based hiring is proving to be the right course as opposed to worrying about the right degree. 

Streamline onboarding. Time spent on onboarding activities is a hidden cost for both HR and suppliers. Standardizing your onboarding processes helps decrease the amount of ramp-up time needed for contingent workers to be productive. Consider creating role-specific onboarding templates that staffing suppliers can integrate with their placement paperwork to ensure workers have what they need on day one.  

For instance, provide basic safety training and/or testing prior to a contingent worker coming on site at a manufacturing facility. Having some pre-work done before a new worker starts can help improve retention and decrease the frequency of costly rehiring.  

Offering site visits during the onboarding process is also important. Studies show that allowing workers to see what the job entails prior to beginning their contract increases retention. It also gives managers and workers a chance to “meet the team before you start” and offers a glimpse into your culture, reducing those costly first day/week no-shows. 

Offer volume-based hiring. You may be surprised to learn that suppliers will offer you discounts to secure more favorable contract terms. Spend some time analyzing your total spend across different departments or regions within the organization. Then engage with your suppliers supporting those areas and offer them volume opportunities, priority requisition status or longer-term partnership contracts. All of these showcase your commitment to partnering with suppliers and can often unlock supplier discounts by simply recognizing who your partners are.  

One supplier I spoke with said, “First of all, if clients looked wholistically at who was consistently delivering in their program — responding to requisitions with qualified candidates — they would find that there are probably less than 10 suppliers who were true partners. Then secondly, if those 10 were considered strategic partners and given a little more access to the business, to having a seat at the table and to working together to shed new light on diversity hiring, suppliers would be willing to provide volume-based discounts. But when a supplier must compete with 20 other staffing companies for every requirement, there is hardly any volume to warrant further discounts.” 

Identify hiring patterns. Utilizing insights and analytics around your contingent workforce spend could help identify patterns in your organization’s hiring that could help you reduce costs. By identifying peak demand periods, average assignment durations and worker turnover trends, sometimes you can get ahead of the curve and uncover buried costs. For example: By identifying patterns in seasonal demand, your suppliers can better forecast labor needs, identify talent in quantities and help you avoid unnecessary overtime or last-minute hires that carry premium costs.  

Another example involves looking at which departments seem to have the most turnover. Is there a training issue? An interviewing issue? A workload issue? Getting to the root of the problem and course correcting is one of those cost-saving bonus items found when your HR teams, managers and suppliers stop spinning their wheels on replacement requisitions. 

Utilize an MSP or VMS. If you aren’t already doing so, consider utilizing a managed service provider or vendor management system partner to help your program deliver operational efficiencies through automation, compliance enforcement across your supply base, consolidated invoicing and streamlined billing. One of SIA’s contingent workforce program owners said they were able to refocus two of their billing specialists to other areas simply by getting one invoice from their partner (MSP or VMS) versus handling multiple invoices directly from suppliers each week.  

Another way MSPs and VMS tools can help with cost savings is through their analytics capabilities. These providers can help their clients identify cost outliers, set reasonable bill rates for suppliers by role/region and suggest process improvements to reduce redundancies or mismatches in role requirements. For example, they can handle duplicate submittals and manage the first round of résumé reviews, which helps reduce the number of unqualified candidates a manager receives for their open roles — time savings and cost savings all wrapped up in one! 

As the demand for contingent labor continues to grow, finding ways to save on spending also grows. I have found most suppliers are reasonable, but with talent in the driver’s seat, the answer isn’t always in rate reduction. While you can continue to seek savings from your suppliers, a safer bet is to look at other creative ways to find your own hidden savings. Remember to focus on optimizing job requirements, streamlining onboarding, utilizing workforce planning and offering volume hiring discounts.  

Through strategic partnerships, buyers and staffing suppliers can work together to find cost-effective contingent workforce processes that benefit everyone involved.