One of the most costly oversights in organizations with a contingent worker program is that many lack category management—still working in silos. Typically, gig workers are engaged by an organization’s Procurement function -- outside of Human Resources and traditional talent sourcing processes, yet the requisitioner often lacks benchmark data for what the services should cost. Without market-based rates for comparison or access to historical data on how the organization has negotiated payment for similar engagements, companies are often left overpaying for resources.
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Furthermore, many contingent workers are engaged through a pre-existing relationship with a service provider, yet lax communication between departments can be costly.
If an organization needs to hire a highly-skilled specialist, for example, Human Resources may enlist an outside recruiting firm to help source the talent. The HR team spends time working with the firm from sourcing to onboarding without consulting Procurement. Had the two functions collaborated from the beginning, HR would be aware that the organization already had a relationship with a preferred vendor and could have acquired a highly skilled worker at a much lower cost— leaving room in the budget for future strategic hires.