As organizations increasingly look to diversify their talent pool, increase business flexibility and save money, it's more important than ever to stay on top of the latest trends in contingent workforce management.
But what are the top contingent workforce trends that organizations need to be aware of? As we move into 2023, it's clear that there are several key trends that will shape the future of contingent workforce management.
In this article, we'll explore the six biggest contingent workforce trends for 2023 and what they mean for organizations.
This blog is a summary of our latest guide, The 6 Biggest Workforce Trends in 2023. If you would like to explore any of these trends in more detail, then download your free copy of the guide by clicking the below image.
1 - The Current Economy
It’s been more than a decade since the last major financial crisis in the US, yet many experts are predicting the economy will fall into a recession. A recent report from JP Morgan states that while the global economy is “not at imminent risk of sliding into a recession”, it predicts that a US recession is likely before the end of 2023.
There are a variety of reasons why the economy has stalled, as rising wages, skyrocketing prices, high inflation and staffing shortages are all making it more difficult for organizations to grow, or even maintain, their profit margins.
If a recession is to occur, it could have a significant impact on the workforce.
2 - The Contingent Workforce Will Continue to Grow
Perhaps the largest impact of a recession would be its effect on the contingent workforce. When we look back at the 2008 recession, or the ‘Great Recession’ as it is commonly named, we can see that it’s the real acceleration point in history where organizations moved from full-time employees towards the contingent workforce.
In times of economic difficulty - and this is what we can expect to see in 2023 - organizations typically ramp up their use of contingent workers in an effort to:
3 - Businesses Put Increasing Emphasis on Flexibility
In a world where the best industry talent is now looking for remote work, businesses must adopt agile work models and flexible schedules if they are to hire new talent and retain existing team members in 2023.
In fact, businesses, now more than ever, will need to offer a mixture of both office work and at-home work if they are to hire the top talent within their industry.
One primary reason we will see more businesses turn to remote workers will be to address domestic labor shortages. Rather than looking to address those shortages locally, businesses will look to global contingent workforce solutions to hire top talent.
By implementing an effective contingent workforce program that spans different countries, businesses can both increase their flexibility and address labor shortages at the same time.
Not sure how to manage a global contingent workforce? Read our blog, 4 Things to Keep in Mind When Managing a Global Contingent Workforce, for some tips.
4 - An Immigration Catch up Will Facilitate Workforce Growth
The pandemic and the resulting travel restrictions from governments around the world resulted in a significant backlog in immigration, leading to a further intensification of the existing labor shortage.
As we move through 2023, this will be addressed. Countries such as Canada and the UK are forecasting record levels of immigration for 2023, which could help facilitate regional growth and help increase labor supply.
Meanwhile in the US, nearly 1 million immigrants became US citizens in 2022, according to The Guardian, the highest number in almost 15 years after the backlog caused by the pandemic.
With the immigration backlog being addressed, in 2023 we can expect to see higher levels of immigration that will boost the working-age population and lessen the labor shortages currently being experienced.
5 - Recalibration of the mid-market contingent workforce
Despite making up the majority of organizations within the industry, mid-market spend-level clients are being grossly under-serviced by large MSPs and vendor management systems that are moving past even accepting these clients.
Businesses with less than $50m (and in particular less than $30m) contingent workforce spend are finding it increasingly difficult to find an MSP or VMS solution that will accept them.
This has meant that more dynamic and customer-centric offerings are exploding onto the market, providing small to mid-spend the higher levels of service that they just cannot find anywhere else.
As a result, organizations must now choose who they partner with carefully. Many organizations are launching new services and new arms of their business in an effort to seize this opportunity and earn some quick money - without having the client’s best interest at heart.
If you’re looking for a partner to help with your contingent workforce management, make sure to put value in companies that have deep experience in the space.
6 - The evolution of contingent workforce management solutions
In 2023, there will be more outsourced contingent workforce management solutions than ever before, giving organizations the expertise and resources they need depending on their unique requirements.
These include:
Managed service provider (MSP): The practice of outsourcing the responsibility of a company’s entire non-employee workforce management to a third-party provider with expertise in contingent workforce and staffing agency management.
MSP lite programs: In an MSP Lite program, a vendor-neutral partner will act as a single point of contact for all of your organization’s externally-sourced staffing needs, but you will avoid the process flows, customized solutions and implementation of a full MSP.
Supplier consolidation services: A supplier consolidations services partner will take away the complex paperwork and processes associated with managing staffing agencies, such as onboarding, offboarding and supplier payments - consolidating all of your suppliers into one point of contact, one process and one invoice.
Interested in learning how Contrax can help your business manage its contingent workforce? Book a meeting with our team of contingent workforce management specialists today.
