Recent research has suggested that across multiple industries, employers’ use of contingent labor will increase from 30% in 2015 to over 50% in 2022. In the healthcare industry, RightSourcing’s Strategy, Analytics and Metrics team has observed health systems have increased their use of contingent labor in 2016 by 41%. As contingent labor programs continue to grow, so too can the costs associated with obtaining qualified healthcare contingent workers. Are you pursuing strategies to reduce this area of spend?
Contingent Labor Cost Reduction Strategies
Contingent labor programs have grown out of two challenges in healthcare- acquiring enough talent to render exceptional patient care and cost reduction at a time when budgets and reimbursement payments are shrinking. Sound contingent workforce management policies should be in place to ensure control of runaway costs associated with these programs. Consider the following strategies to reduce your contingent labor spend:
- Partnering with a vendor neutral MSP. Managed service providers are experts in contingent workforce management. However, not all managed service providers are equal. Only a vendor neutral MSP can deliver cost savings that align with health system goals. In contrast to a staffing supplier- led MSP, a vendor neutral MSP has no financial benefit to filling positions at higher bill rates. Staffing supplier- led MSP’s do. A staffing supplier- led MSP has a vested financial interest in fulfilling the majority of openings with their own candidates supplied by their own staffing side of the business. This does not ensure a truly competitive environment for providing contingent workers at lower costs. Only a partnership with a vendor neutral MSP can provide reduced spend in alignment with health system goals.
- Strategic analytics. Many health systems are unaware that they overspend on talent within their contingent labor programs. This is because they don’t adequately track or measure contingent labor spend. When contingent labor program spend is accurately tracked and measured, only then can meaningful cost reduction measures be enacted. Strategic analytics can offer enhanced visibility into reasons for spend such as the failure to use historical data to inform seasonal hiring requirements. This can cause health systems to react too late, engaging contingent labor at crisis rates.
- Market intelligence. When contingent labor programs experience dramatic increases in spend, it is often due to a lack of awareness about market rates. Health systems could be obtaining healthcare IT desktop support workers at rates appropriate for healthcare engineers. Market intelligence is critical to cost reduction strategies and can inform health systems how to compete for the best contingent workers at the best billing rates.
- Process efficiencies. When systems and processes are fragmented, they can lead to expensive inefficiencies. These efficiencies could be the result of thousands of invoices that require additional full time employees to manage the process, redundant procedures that cost the health system in lost productivity, and more. By examining and improving systems and processes, health systems are better able to reduce contingent labor spend.
In order to reduce contingent labor spend, health systems should examine their opportunities to implement sound contingent workforce management solutions. Contact RightSourcing today for a free workforce analysis and find out how much the leading vendor neutral MSP can save your health system in contingent workforce program spend.