Contingent Workforce Management: How to Successfully Blend Permanent and Temporary Staff
In today’s staffing landscape, many organisations have already adopted some form of blended workforce strategy — combining permanent employees with a range of contingent workers such as temporary agency staff, freelancers, and contractors. This approach is no longer new or experimental: it’s now a well-established way for businesses to access the skills they need, remain agile, and control costs while meeting fluctuating workforce demands.
According to research insights from leading industry analysts, the reliance on contingent talent is steadily growing. For instance, Gartner has indicated that contingent labour is poised to comprise a significant portion of the global workforce, with estimates suggesting it could reach 35 to 40 percent of the total workforce. This trend underscores companies’ increasing pursuit of greater flexibility and specialised skills. Meanwhile, Staffing Industry Analysts (SIA) consistently highlight the critical and expanding role of agency work within the global employment landscape, reinforcing the growing importance of effective solutions to manage this segment.
Why contingent workforce management is a growing priority
Several factors continue to drive the widespread adoption of blended workforce models combining permanent and contingent staff:
- Economic uncertainty: Businesses need the flexibility to scale staffing up or down as demand fluctuates.
- Talent shortages: Contingent workers provide faster access to scarce or highly specialised skills.
- Project-based work: Many organisations now operate around projects that require short-term, specialised staffing.
- Worker preferences: More professionals are choosing freelance, contract, or agency work for greater flexibility.
For many companies today, contingent workers are no longer just a supplement but a core element of their overall workforce strategy.
The challenges of managing contingent and permanent staff together
Even as blended workforce models become standard practice, they present distinct challenges:
- Visibility and reporting: Without centralised data, organisations struggle to monitor total workforce composition, costs, and supplier performance.
- Compliance: Worker classification, tax obligations, and employment laws vary widely — particularly across European markets.
- Cost control: Without full visibility, contingent workforce costs can quickly escalate.
- Supplier management: Coordinating multiple staffing suppliers, freelancers, and internal recruitment teams requires efficient, scalable processes.
For example, regulations such as the EU’s Posted Workers Directive, the UK’s IR35 rules, and national agency work regulations demand ongoing oversight. The European Labour Authority (ELA) continues to monitor cross-border labour practices within the EU.
How technology enables effective contingent workforce management
Vendor Management Systems (VMS), such as Pixid VMS, play a key role in helping both employers and staffing agencies manage the complexity of contingent workforce management within blended staffing models.
With a VMS, organisations can:
- Gain real-time visibility over contingent workforce costs, suppliers, assignments, and performance.
- Standardise processes across business units, locations, and supplier partners.
- Ensure compliance through automated rule enforcement, audit trails, and consistent documentation.
- Optimise spend with consolidated data that supports supplier negotiations and cost control.
- Strengthen collaboration between internal teams and staffing suppliers across requisitions, candidate submissions, timesheets, and invoicing.
For staffing agencies, VMS solutions also help deliver greater client transparency, responsiveness, and service quality — strengthening long-term business partnerships.
Conclusion: A long-term workforce strategy
The growing reliance on contingent workforce management is now central to how many organisations operate. As the proportion of contingent labour rises, visibility, compliance, and cost control become even more critical.
With the right technology — such as Vendor Management Systems — businesses can confidently manage complex blended workforces, balancing flexibility with full operational control and long-term workforce stability.
