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Containing Costs: Contingent Workforce Management Best Practices


The past few years have seen a large increase in the utilization of contingent workers. In fact, it's estimated that "the global contingent workforce industry generated $171.5 trillion in 2021 and is estimated to reach $465.2 trillion by 2031." In the healthcare space, around 90% of healthcare executives said they employ travel nurses within their organization in 2021. With the rise of the gig economy, it's clear that contingent workers aren't going anywhere anytime soon. Odds are you already use them in some capacity, and are aware of the increased costs that tend to accompany them. 

Since 2020, healthcare as a whole has seen massive upheavals in how daily operations run. With spikes in patient volumes, rampant burnout among workers, and long-lasting workforce shortages, organizations big and small have turned to contingency staff just to stay afloat. Today, staffing challenges still exist; likewise, so does a reliance on contingent workers.

Contingent staff have a myriad of benefits associated with them, but they should not have to break the bank. Here are some contingent workforce management best practices to help you contain staffing costs.

Benefits of Contingent Healthcare Workers

In order to understand the best practices for managing contingent staff, we must understand first the true value they bring to the table:


The main benefit associated with contingent healthcare staff is the flexibility they offer. Because they aren't full-time employees, but rather work on an assignment basis, they are free to fill gaps quickly and effectively. During the pandemic, for instance, with massive influxes of patient volumes, hospitals needed extra hands on deck not only to meet the needs of local patients, but to give full-time workers a break so they didn't burn out too quickly.

Read more on surge staffing management here.

Build a Reliable Workforce

If a contingent worker enjoys their assignment with a facility, there is a good chance that they are willing to stick around for the long term as a full-time employee. Contingent labor is part of the gig economy, which certainly works for some people. But at some point they will want to settle down and find more stability, meaning your organization can scope out the best talent within your contingent labor pool.

Specialized Expertise is On-Call

For highly specialized areas of healthcare, finding full-time talent can be tedious and costly. However, specialized contingent workers can help with short-term or niche needs that the facility rarely has to accommodate.

Contingent Workforce Management Best Practices

Contingent workers are only increasing in popularity, which may come as no surprise, given their associated benefits. While they often come with increased costs, you may wonder if it is even possible to reduce the costs associated with contingent labor, when the demand is increasingly high and supply is limited. As experts in healthcare labor, HWL helps facilities contain staffing costs as much as possible. Here is how:

Create Your Own an Internal Agency

By developing your very own internal agency, you will be able to hire contingent workers through a private labeled, co-sourced model. As experts in this field, HWL collaborates with key stakeholders to help them develop recruitment marketing, candidate sourcing, and screening management. By utilizing market intelligence to create high-quality leads within social media campaigns, search engines, and more, your organization can have its very own private talent pipeline to minimize recruitment costs.

Read: How One Health System Developed an Internal Agency to Lower Contingent Staffing Costs by 30%

Capitalize on Managed Services Programs

A managed services program (MSP) provides ample opportunity to deliver vendor-neutral workforce management solutions that not only eliminate tedious administrative tasks, but also lower overall labor costs. 

HWL's MSP include the following capabilities:

  • Contract management: Utilizing data-driven market analyses, our MSP helps balance the competitiveness of your business, cost containment, and attracting the best talent. These successful market rate structures are organized by engaging all key stakeholders and establishing vendor panels across the country.
  • Interview & screening: Our clinicians conduct a one-time intake call with hiring managers to evaluate which skills are required and where they need to be in addition to expectations regarding workplace culture, experience, and background. HWL then develops screening tools, conducts candidate interviews, and places them on assignment. 
  • Onboarding: After a thorough screening process, we onboard the new contingent talent. We ensure all certifications, documents, and health information are verified and accessible to comply with all HR requirements.
  • Business intelligence: We not only use data to recruit contingent workers, we use it to ensure their long-term viability. By building real-time analytics dashboards and reports, you can gain deeper insights into utilization, vendor performance, and staff experience. This confirms that all staff are aligned with organizational imperatives.
  • Vendor-neutral model: HWL guarantees clients are not locked into a single vendor, but rather can scale up or down however they see fit. When all vendors compete at the same level, you will be able to lower bill rates and find high-quality staff.

Use Tech More Strategically; Use a VMS

Vendor Management Systems (VMS) help streamline all aspects of a contingent workforce and maximize cost savings. HWL's VMS, for instance, is a technology platform that acts as a one-stop shop for all of your talent management needs — nursing & allied, locum tenens, home health and hospice, pharmacy/lab, administrative, and more. With customizable workflows and easy integration into existing systems, the VMS provides:

  • Fast online or mobile order entry
  • Automated name clearing and known provider processes
  • Centralized hub for bid reviewing, managing interview schedules, and online screening
  • Ability to store and manage documents and credentials
  • Customized dashboards with KPIs to track costs, quality, and vendor performance

These features and more allow for heightened transparency to ensure competitive market rates, supplier commitment, and that you are able to standardize fees and other terms. Ultimately, a VMS saves time and money for hiring managers while simultaneously providing a platform that is designed to cut spend without sacrificing workforce integrity.

HWL Is Your Best Resource

Between inflation and the increasing reliance on contingent staffing, the cost of running a healthcare facility is steadily climbing with no end in sight. Having a trusted partner dedicated to helping you contain costs without sacrificing quality of care is key to navigating the most significant issues that face our industry today.

By following the above contingent workforce management best practices — building an internal agency and utilizing both an MSP and VMS — you'll be well on your way toward reducing staff costs and improving your bottom line for the long run.

To learn more, get in touch with us today!

August 18, 2023/By Lauren Cabral
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Author: Lauren Cabral

Lauren N. Cabral joined HWL as the Senior Vice President of Business Development and Consulting Services in 2020. With over a 25-year record of achievement in driving transformational workforce management and talent acquisition optimization strategies to some of the most prestigious integrated delivery networks in the country, Lauren has demonstrated executive leadership in leading teams and large-scale engagements in serving as the Vice President of Advisory Solutions, Business Development and Client Services for some of the most respected healthcare workforce management firms in the nation.
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