Today’s contingent labor management programs are helping organizations meet business demand by sourcing specialized talent, managing risks, maintaining regulatory compliance, and increasing cost savings.
By Debbie Bolla
Contingent labor in the workplace has been on a steady uptick for the last few years. According to Deloitte’s Global Human Capital Trends Report, 41% of companies are increasing the size of their contingent workforce, with Forbes reporting that by 2050, 50% of the U.S. workforce will be comprised of contingent workers. As non-permanent staff is becoming a more important part of the workforce, HR leaders understand that having a strategic management approach is crucial.
“With the way work has changed, especially with more remote and hybrid roles, having a truly strategic approach to the contingent workforce is absolutely essential for staying competitive,” says Debra Timmerman, president, global MSP solutions for KellyOCG + Sevenstep. “We’re seeing projections that contingent workers could make up nearly half of the total global workforce by 2025, highlighting this significant shift and the need for integrated talent strategies.”
According to HRO Today research, contingent labor management requires a unique skill set that involves understanding complex labor laws, compliance with regulations related to temporary workers, managing the human aspect of the workforce, and talent sourcing. Enter managed services programs (MSPs).
“MSPs provide valuable insights on the success of the contingent workforce to support organizations’ talent strategy and business goals,” says Tommy See, VP of marketing for Magnit. “MSPs serve as a strategic partner to manage and optimize contingent talent to meet business demand and source specialized talent while managing risks, maintaining regulatory compliance, and driving cost savings.”
By working with a MSP partner, HR gets better access to talent and real-time data, gains efficiencies while reducing risk, and sees improvements in many hiring metrics like speed to hire. “Strategic contingent workforce management isn’t just about cost effectively filling open roles,” says Marcia Hagood, senior vice president for DZConneX. “The best programs enable organizations to remain agile in volatile markets, gain access to highly specialized skills, and build a future-ready workforce that can flex with business needs.”
Business needs often vary, especially in an uncertain economy. For healthcare organizations, they can experience fluctuating hiring demands throughout the year and the flexibility of contingent workers is key to helping them scale. Chase Farmer, chief commercial officer for Medical Solutions, says that MSPs at the core promote cost-efficiency without compromising patient care but nowadays go way beyond that.
“With the right partner, contingent staffing becomes a proactive component of a broader workforce strategy, beyond staffing, to help hospitals solve the healthcare labor crisis,” he says. “Effective contingent workforce management also involves strategic workforce forecasting, predictive analytics, retention strategies, as well as centralized scheduling, payroll, and compliance.”
Emily Hazen, chief operating officer of workforce solutions and EVP of process optimization for Aya Healthcare, agrees. “Strategic contingent workforce management is essential to balance financial constraints with clinical and operational needs,” she says. “It ensures the right resources are in place without overextending budgets or compromising patient care.”
Often facing talent shortages, healthcare organizations find these benefits and strategies helpful in overcoming their challenges. “Our MSP has helped us think strategically,” says Cindy Cronkhite, vice president, human resources and support services for UNC Health Lenoir. “We have discussed various contract terms other than the usual 13 weeks. We have also discussed a local labor pool for per diem staffing for both RNs and CNAs (certified nursing assistants).”
A lever aiding in the advancement of MSPs and their offerings is artificial intelligence and advanced technologies. AI has the power to streamline and automate many tasks when it comes to managing contingent labor, including candidate matching, resume review, and interview scheduling, leading to better decision-making.
“We’re seeing AI being used to improve candidate matching accuracy by over 30% in some cases, and it enables us to predict future talent needs and identify potential compliance risks before they become problems,” says Timmerman.
For healthcare leaders, Farmer says that AI helps with proactive staffing decisions in several ways including identifying burnout risk, faster sourcing, accurate and easy credentialing, and overall visibility. “AI is allowing us to tailor solutions to the unique challenges of each healthcare facility based on real-time data,” he says.
AI agents are also playing a role in delivering better insights and recommendations for staffing. “Embracing AI agents result in an enhanced user experience for workforce management,” says See. He explains that both knowledge and candidate agents can help organizations automate workforce processes, providing an improved experience for hiring managers and workers alike.
Today’s technology even has the power to predict staffing requirements. “AI can supercharge an MSP, and we expect its influence to only grow in the next one to two years and beyond,” says Hagood. “Predictive analytics are also enabling programs to forecast demand more accurately and uncover workforce trends.”
Hazen agrees that AI tools are helping with workforce planning. Through AI, healthcare systems predict patient and staffing demand months in advance, allowing them to have the right resources in place at the right time, she says.
But with all AI applications, human interaction and oversight is necessary to ensure accuracy and fairness. “It is crucial to acknowledge the sensitivities around AI,” notes Timmerman. “We realize the importance of legal and privacy implications around AI in workforce management and navigate these complexities responsibly to ensure compliance with regulations, preventing discriminatory bias, and protecting sensitive personal data.”
When it comes to data security, MSP partners are a main component in keeping organizations and information safe.
“One concern clients are seeking our help is with cybersecurity, especially with the continued prevalence of remote work and the involvement of multiple third-party partners,” explains Hagood. “Our MSPs work with clients to ensure secure onboarding, access controls, and supplier compliance from day one.”
Farmer says there are multiple steps MSP partners can take to protect critical data. “MSPs can offer comprehensive cybersecurity services, including real-time monitoring, threat detection, incident response, and compliance management,” he explains. “This helps protect sensitive data and maintain high levels of security.”
Along with cybersecurity, candidate fraud is a growing concern. “Employers expect sophisticated verification processes to consistently ensure every candidate is real,” says Timmerman. From applicant misrepresentation to deepfakes, candidate fraud occurs more than ever before.
“There are a number of risks organizations need to consider with the remote work boom and the rise of AI that include AI-assisted interviews, paid impostors, and state-sponsored candidates. MSP programs need to be aware of the signs and symptoms to mitigate those risks,” says See.
Hagood recommends that organizations ensure their MSP partners build safeguards into their processes and follow verification steps in order to catch any red flags or outliers as soon as possible.
Looking ahead, as organizations continue to see the value of contingent workers, MSP partners will be critical in managing risk, maintaining compliance, and providing a key understanding of the talent landscape.
“As contingent workforce programs mature, they’re evolving from tactical execution models into strategic levers that shape the future of work,” says See. “MSPs are enabling inclusive, resilient, and sustainable workforce ecosystems.”
