Managing a contingent workforce effectively requires more than just hiring the right talent; it involves continuously evaluating performance and ensuring that your program is optimized for both cost efficiency and productivity. Tracking key performance metrics can provide insights into areas of improvement, uncover bottlenecks, and help you make data-driven decisions that support your business objectives.
In this blog post, we’ll explore the top 3 performance metrics you should track to ensure the success of your contingent workforce program.
Top 3 Performance Metrics for Contingent Workforce Programs
1. Time-to-Fill Positions
What it is:
Time-to-fill measures how long it takes to source, hire, and onboard a contingent worker once a requisition is created. This metric is especially important for businesses that rely heavily on flexible staffing to meet fluctuating demand or seasonal needs.
Why it matters:
A slow time-to-fill can lead to gaps in productivity, missed deadlines, or increased pressure on full-time employees. On the other hand, a fast time-to-fill indicates that your recruitment and onboarding processes are streamlined and efficient, enabling your business to remain agile.
How to improve it:
- Partner with staffing agencies: Build strong relationships with staffing agencies and suppliers that specialize in your industry or specific roles to ensure a steady pipeline of qualified candidates.
- Leverage technology: Use recruitment platforms, direct sourcing solutions, or applicant tracking systems (ATS) to automate parts of the hiring process, such as screening resumes or scheduling interviews.
- Enhance the onboarding process: Simplify onboarding by using tools like Employer of Record (EOR) platforms that allow for easy contract signing, payroll setup, and background checks, reducing delays in getting workers started.
2. Cost per Hire
What it is:
Cost per hire is the total expense involved in bringing on a contingent worker, including recruitment, onboarding, training, and administrative costs. This metric is critical for ensuring that your contingent workforce program remains cost-effective.
Why it matters:
Overly high costs per hire can erode the financial benefits of using contingent labor, such as flexibility and lower fixed labor costs. Monitoring this metric helps you assess whether your program is providing a good return on investment (ROI) and identify areas where you can reduce costs.
How to improve it:
- Consolidate suppliers: Working with a smaller pool of trusted staffing agencies can help you negotiate better rates and reduce administrative overhead.
- Use an Employer of Record (EOR): Partnering with an EOR like FoxHire can help centralize payroll, benefits, and compliance management, reducing the costs associated with these functions.
- Evaluate your sourcing channels: Track which recruiting methods (job boards, referrals, agencies) bring in the most qualified candidates at the lowest cost, and focus your efforts on those.
3. Worker Quality and Productivity
What it is:
Worker quality and productivity measure how well your contingent workers perform once they’re hired. This can be assessed through performance reviews, completion rates for assignments, or even client satisfaction scores.
Why it matters:
Hiring contingent workers quickly and cost-effectively is only valuable if they meet or exceed performance expectations. High-quality workers contribute to business goals, complete projects on time, and require less oversight or retraining, making them more valuable to your organization.
How to improve it:
- Set clear performance expectations: Establish KPIs and goals for your contingent workers at the outset of each project to ensure alignment and accountability.
- Provide training: Even contingent workers can benefit from short, targeted training sessions to familiarize them with your company’s processes, tools, and standards, which can boost productivity.
- Gather feedback: Use regular performance reviews and client feedback to assess worker quality and identify top performers you may want to rehire or extend for future projects.
Bonus Metric: Worker Retention
While contingent workers are often brought on for short-term or project-based assignments, retention of high-quality contingent talent can be an additional metric to track. Retaining top performers for future engagements can save time and costs, while also ensuring you have reliable talent when needed.
Next Steps for Tracking KPIs
Tracking these three performance metrics—time-to-fill, cost per hire, and worker quality and productivity—can provide a comprehensive view of the effectiveness of your contingent workforce program. By closely monitoring these KPIs and continuously refining your processes, you can ensure that your program remains agile, cost-efficient, and aligned with your business objectives.
Whether you’re managing a small contingent workforce or a large, multi-state operation, these metrics can help you make informed decisions that drive long-term success.
