Contractor Management Outsourcing (CMO) is a category of Business Process Outsourcing (BPO) where an employer transfers all or part of its contractor or contingent workforce management to an external service provider. With most BPO services, cost is a main driver of adoption. Cost savings are realized in outsourcing highly time consuming processes and high-risk functions. The outsourcing of these functions allows for the employees to focus on value add or revenue generating activities.
The world of work is changing and many companies are now engaging flexible workforces and new ways of managing talent. The new world of work brings many benefits but also creates greater complexities, costs and risks for enterprises.
Contactor Management Outsourcing improves contingent workforce governance and processes for many of the worlds leading enterprises. Many CMO providers have standardized, proven methodologies and processes for establishing contingent workforce control to ensure that all contractors under management are fully compliant with local legislation and global standards.
Benefits of Contractor Management Outsourcing
When an employer is managing contractors internally, a team is needed to handle functions such as visa and work permit applications, contract negotiations, on boarding, payroll and off-boarding. Many times the regulations for contractors are different from permanent employees. This adds time and complexity to job of managing the contractors.
If an employer is using multiple recruitment agencies to manage different groups of contractors, pricing efficiencies can be difficult to realize. If a CMO provider is used to manage all contractors, the provider can furnish detailed markup and final pricing data for workforce pricing analysis.
When an employer is deploying a contractor to a remote location, a CMO provider can operate as an Outsourced HR department. This allows the employer to have a remote presence without needing to build and support infrastructure for a remote workforce.
When an employer is managing contractors internally, employee misclassification is a substantial risk. Employers can attempt to mitigate the risk by separating contractors from permanent employees by issuing different access badges or exclusion from employee only events or meetings. These attempts do not reduce the employee misclassification risk. Outsourcing the Contractor Management however, transfers the misclassification risk to the CMO provider.
When a contractor is deployed outside their country of tax jurisdiction, then the employment regulations of the host country need to be considered. CMO providers with a local presence are experts at navigating the ever-changing sea of employment and taxation regulation. Outsourcing the Contractor Management transfers the country specific regulatory risk to the CMO provider.
CMO providers have standardized, proven methodologies and processes for establishing contingent workforce control to ensure that all contractors under management are fully compliant with local legislation and global standards.
Additionally, CMO providers can provide consolidated reporting which makes workforce analysis much easier and efficient for the employer.
Quality in contractor management can be described as delivering an experience that is more than satisfactory to the contractor while operating compliantly within governmental regulations. The standardized methodologies used by CMO providers can deliver quantifiable components of quality such as speed and accuracy as well as qualitative components such as mobility services and contractor care.
The key to any BPO service is to not focus on cost. It’s the increase in value that matters.
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