4 Steps to Creating an Integrated Risk Assessment Model for Your Contingent Workforce


Contingent workforce programs involve a lot of uncertainty. Building an integrated risk model, however, can help bring some of those unknowns into focus, writes Tania Fiero, vice president of human resources at Innovative Employee Solutions (IES).

For many companies, relying on a contingent workforce to get tasks done is a relatively new phenomenon, a result of the growing gig economy. While this increasingly popular workforce mindset is beneficial to both workers and companies, it includes its own set of managerial challenges.

Many companies have developed contingent workforce managementOpens a new window programs to meet these challenges, streamline existing management processes, and leverage a combination of full-time employees and contingent workers. This shift has done wonders for handling an ever-changing base of workers and adapting to the gig economy. However, many contingent workforce programs lack a crucial facet of successfully managing their workers: workforce risk management.

Contingent labor comes with its own set of risks. While many managers might recognize those risks, that doesn’t mean they’re ready to prevent or mitigate them. That’s why it’s vital that companies build an integrated risk assessment model that accounts for every aspect of contingent workforce management, from processes to contracts to audits. Without this model, you might find yourself blindsided by something you could have anticipated from the start.

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Building an Integrated Risk Assessment Model

A risk assessment can help solidify that approach by identifying potential barriers to success, forecasting how likely it is that those events occur, and developing strategies to either reduce how often those impediments happen or lessen the consequence to an acceptable level for the organization. For a company or project, a risk assessment model is an investment in the success of that undertaking.

Here are some ways to build a model that helps keep your team prepared.

1. Determine program goals

Before acting on an integrated risk assessment model, identify your contingent workforce program’s goals. Are you trying to reduce costs? Improve data visibility or candidate quality? Maybe you’re trying to shrink time-to-fill ratios or cut down on the likelihood of misclassifying independent contractors.

Regardless of what you’re working toward, it would help if your team had a clear and shared understanding of your goals. Otherwise, you run the risk of creating a program that tries to solve the wrong problems.

To better understand your objectives, perform an as-is analysis with your current stakeholders. Collect data from everyone from human resources to accounts receivable but focus primarily on your end users. That way, you can create a program that prioritizes team goals over your own.

2. Share program priorities with stakeholders

While clarifying your objectives is an essential first step, you need to figure out which ones matter most. Workforce risk management needs one main goal and – at most – two secondary objectives. Executive buy-in is crucial to program success, and sharing a clear and straightforward plan is a critical step of securing that buy-in. You can’t do that if you’re trying to tackle dozens of problems simultaneously.

Before sharing your vision with stakeholders, however, you should know how prioritizing in one area could negatively impact another. An emphasis on cost savings, for instance, could lead to lower employee engagementOpens a new window . Meanwhile, trying to improve data collection and analysis might mean a higher cost and longer implementation timeline.

If you go in knowing both the benefits and the drawbacks of your plan, you can explain why the pros outweigh the cons. As a result, you’ll have a much easier time getting everyone on board.

Learn More: Automation as the Key to Contingent Workforce ManagementOpens a new window

3. Look for possible obstacles

Once everyone is on board with a plan, the next step is to figure out where and how that plan could go wrong. One of the best ways to do this is to perform a workforce risk analysis exercise.

Collaborate with your stakeholders to list any factors that could knock your project off course. Those challenges could include getting buy-in from users or struggling to integrate new tech solutions promptly because of a lack of expertise. Once you’re satisfied with your list of potential problems, assess the negative impact of each item and how likely it is to happen.

From there, you need to decide which items on that list require a response plan. This strategy could be a way to avoid the risk altogether, to transfer or share it with another party, to reduce it, or to accept it ahead of time. Not every problem is avoidable, but you can be ready for anything that might come your way if you know what to expect and have a plan for it.

4. Prepare for launch

You might think that implementing workforce risk management would be the hard part. If you’ve planned everything out beforehand while assessing risks and getting stakeholders on board, the launch is just a matter of setting things in motion and making sure it all stays on track.

Perform compliance audits on your vendors and partners to ensure they’re following your new policies. Meet with stakeholders regularly to make sure everything is going according to plan. If it isn’t, you should have a plan for that as well.

Because of the inherently temporary nature of contingent labor, this branch of your workforce comes with a unique set of risks. An effective management strategy can’t solely focus on everything operating smoothly – you need to be ready for when the road becomes bumpy. That’s where workforce risk management comes in.

Have you built an integrated risk model for your contingent workforce? What challenges have you faced in doing so? Tell us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .