What is contractor management software?
Contractor management software is a system for managing critical data related to the employment of independent contractors, automating the entire employment lifecycle¡ªfrom onboarding through payment. Whereas the capabilities vary between systems, this can include information related to insurance, health and safety, training, and other documentation relevant to the contractor and the hiring person or organization.
What is an independent contractor?
An independent contractor is a type of contingent worker who is contracted to complete a scope of work by an individual or organization. Though the hiring group controls the outcome of the work, contractors generally have greater freedom than full-time employees in how the work will be completed.?
Contractors are classified as 1099 workers, meaning their wages are subject to self-employment tax. They are additionally not entitled to many of the benefits offered to full-time employees, such as health insurance or retirement contributions.
What are the challenges of using both contractors and full-time employees?
An increasing number of organizations are employing contractors and other contingent workers in addition to their full-time employees. Because contractors are governed by different laws and regulations than full-time employees, they often require different hiring, onboarding, payment, and management practices in order to ensure compliance. As a result, it can be difficult to manage these nonemployees within the same daily practices and software systems as full-time employees.
When do companies need contractor management software?
Companies can benefit from contractor management software any time they employ contractors, but the solution becomes more valuable as the number and type of contractors¡ªand complexity of managing these workers¡ªincreases.
What are the benefits of using contractor management software?
Good contractor management software streamlines the management tasks related to contract workers across the entire employment lifecycle. This includes helping your organization:
- Streamline onboarding and offboarding?
- Manage assignments
- Track and analyze worker performance?
- Simplify invoicing
- Mitigate security and compliance risks
¡°We were able to decrease our contingent labor spend by 25% in the first six months. A main driver was the ability to streamline the number of agencies, the rates that we were paying, and the roles that we were publishing.¡±
¡ªKerry Kiley, Head of Extended Workforce Program Management, Â鶹´«Ã½ (2023 Â鶹´«Ã½ Rising Session)
Features of good contractor management software.
Though the exact capabilities of this type of software can vary by provider, typical features of contractor management software tend to include improvements to onboarding, assignment management, billing, risk mitigation, headcount tracking, and reporting capabilities.
Can contractor management software be integrated into human capital management software?
Yes, in some instances, it is possible to integrate contractor management software into human capital management software. However, it depends on the systems you are using. Some software providers make the process much easier than others by providing total talent management.
What is the difference between contractor management software and a vendor management system?
A vendor management system (VMS) includes many of the capabilities found in contractor management software in that it empowers organizations to automate and streamline processes related to contract worker management. However, a VMS goes beyond this and supports teams that manage all types of contingent¡ªor nonemployee¡ªworkers, including gig, hourly, and freelance, in a single system of record. A VMS has the tools needed to manage those larger project requirements via full statement of work capabilities and offers a business more when it comes to core VMS functionality in areas such as invoicing, vendor collaboration, configurability, and much more.
¡°We recognized our need for a single source of truth that would holistically help us see and manage our contingent workforce. We knew we needed to be more agile and adaptable, so we needed something that would help us on that journey.¡±
¡ªSarah Keisling, Associate VP, Talent Management and HR Operations, Banner Health (2023 Â鶹´«Ã½ Rising Session)