There are all kinds of benefits to having a contingent workforce. You save on benefits and can staff up when you need to—and those are just two of the benefits of a contract workforce. But there are also drawbacks and risks associated with a contingent labor team. This blog will help you understand how to create a risk assessment model for your contingent workforce to help you alleviate these drawbacks.
What is a Risk Assessment Model?
A risk assessment commonly allows you to identify and analyze any potential drawbacks of a particular course of action. In the case of a contingent or contract labor force, a risk assessment lets you define what course of action you should take if any of those risks come to fruition. The goal is to lay out a plan that will handle anything that stems from those risks.
How Can You Apply Risk Assessment to Contingent Labor?
If your goal is to create a document to identify barriers to success, and your actions should any of those risks be realized, there are a few things this document should have, including:
- Outlining the goals of your employment program. Why are you hiring contract over full-time workers? Is it a cost-cutting measure? Does your work wax and wane over the seasons? Whatever your goals, this part of the risk assessment exercise makes sense generally, whether you’re doing a risk assessment or not. Every stakeholder in the organization should have a clear understanding of why you’re hiring contract workers.
- Share these goals, and then create an action plan that will overcome the barriers to reaching your goals. This is called a risk analysis exercise. For example, every step that you roadmap toward reaching your goal could have a reaction that you’ll need to plan for. For example, if you hire a contract workforce to save money, you’ll need to plan for ways to increase employee engagement with these teams. On the flips side, if you can use this labor pool to decrease your time to hire, it improves the stress of your full-time workers. But how does training the contingent workforce affect your permanent team? Keep in mind every action has a reaction, and plan accordingly to decrease your risk.
- Finally, plan for measurement and observation of these alternative labor teams. Plan for audits of these teams but also check-in with your full-time workers to get their feedback. How is the program working at 90-days, six months, a year? Your measurement should benchmark against your original goals for the program to determine the success or failure of the initiative.
Contingent labor as a workforce model is increasing in the United States. But it doesn’t solve all of your problems and can even create some that you should be prepared to handle. A risk assessment helps your organization proactively plan to use this labor force in the most effective way possible. It also protects your organization and current employees from some of the risks stemming from contract work programs.
Work With the Experts!
FoxHire is in the business of eliminating employment risk. As an employer of record (EOR), we help our clients handle and alleviate the risk of hiring new and managing existing employees. Outsourcing your HR eliminates worries over labor law compliance, payroll, benefits, taxes—and so much more. We help you focus on building your business while we take care of finding the right employees to assist you. Contact us to find out more!