The 6 Costly Contingent Workforce Management Mistakes (& How to Avoid Them)

Managing a contingent workforce has become a strategic lever for organisations aiming to stay lean, agile, and competitive. But over the past 25 years, we’ve seen how common missteps—like misclassifying contractors, relying on outdated systems, or lacking clear governance—can cost enterprises millions, cause operational chaos, and expose them to legal risk.

At Oncore, we’ve helped organisations across industries design and run more effective contingent workforce programs—programs that not only minimise risk, but unlock serious cost savings, boost performance, and give teams more control.

This practical guide pulls together the most critical lessons, costly mistakes, and high-impact strategies we’ve seen over the years, so program managers like you can avoid the pitfalls and build smarter, stronger contingent workforce operations in 2024 and beyond.

👉 Looking for a full framework to design your CW program? Start here: Designing and Running an Effective Contingent Workforce Program.

 

❌   Mistake 1: Skipping Strategic Workforce Planning: 

Too often, contingent hiring is reactive—responding to gaps rather than aligning with business strategy. This results in duplicated roles, ballooning costs, or underutilised contractors.

If you don't know why you're hiring a contractor, you're probably spending too much

Integrate contingent workforce planning into your annual strategic reviews. Ensure each contractor role has a business case, budget allocation, and success measure. By integrating contingent workforce planning into the broader organisational strategy, you can ensure that contingent workers complement and enhance the core workforce.  

 

❌   Mistake 2: Weak vendor oversight 

Poor vendor management is one of the biggest hidden costs in contingent workforce programs -Damian Bridge, CEO Oncore

Working with multiple agencies and outsourcing partners can dilute accountability fast. Without strong vendor governance, you're likely overpaying and underdelivering.

Set clear SLAs, conduct quarterly vendor reviews, and ensure rate benchmarking is part of your procurement discipline. Use tech platforms or VMS integrations to track supplier performance in real time.

 

❌   Mistake 3: Ignoring compliance & worker classification

Worker misclassification is one of the most expensive mistakes you can make. Whether it’s tax, superannuation, or employment law, getting it wrong opens the door to audits, fines, and reputational damage.

🛠 Pro Tip: Create a contingent worker classification checklist in partnership with HR and legal. Automate classification decisions where possible through your VMS or onboarding platform.

Don't rely on your vendors to tell you if someone is a contractor - build internal checks

❌   Mistake 4: Poor tracking and tech integration

If you’re still managing contractor timesheets via spreadsheets or emails, with hiring managers across different departments unable to see the whole picture, you’re exposed. Inaccurate tracking leads to billing errors, missed milestones, and budget blowouts, not to mention compliance risks.

Use an integrated VMS or workforce management platform that tracks time, milestones, costs, and compliance in one place. Set up automated reporting for visibility across departments.

Talk to us about our vendor-neutral VMS product today

❌   Mistake 5: Neglecting communication and culture

We didn’t know what the contractors were working on—and they didn’t know who to ask. — Programme Manager, Enterprise IT

There's a reason contingent workers have been called the 'invisible' workforce. Contractors often operate on the fringe of your organisation. Without structured communication, you're paying for half-engaged talent and not getting your ROI from each worker you engage.

Include contractors in project kickoffs, set them up in collaboration tools (e.g. Teams, Slack), and assign them an internal project sponsor to keep them in the loop. And don't forget their onboarding experience.

There's a reason Oncore sponsors the 'Excellence in Onboarding' award at the Internal Talent Awards each year. It's such a critical piece of your communications with your workers.

To read more about optimising the important relationships you have with your contractors click read 9 Best Practises to Optimise Successful Contractor Relationships  

❌ Mistake #6: Sticking with the status quo, letting stale models linger

Too many enterprises stick to outdated models simply because they’re “the way we’ve always done it.” If you haven't reviewed your workforce strategy or supplier agreements and tech stack in 2+ years, you're almost certainly leaving savings on the table.

We've had two expert discussions on this topic on our Podcast:

• The Status Quo is Out - New tech, greater flexibility and efficiency is in - with Christian Clark and Adam Caines, founders of Upplft
• The keys to successful contingent workforces now and in the future with Terri Gallagher, of 

   

Want to dig deeper? Start with our definitive guide to designing and running an effective contingent workforce program to see what best practice looks like.

✅ Governance Checklist for Program Managers

Here’s your go-to list for smarter contingent workforce oversight:

• Annual workforce plan aligned with business goals
• Vendor SLAs + performance reviews
• Classification audits (ABN vs PAYG vs employee)
• Centralised tracking + reporting platform
• Contractor onboarding + engagement strategy
• Annual program and contract reviews

Ready to Optimise Your Contingent Workforce?

If you're serious about reducing costs, increasing compliance, and getting full value from your contingent workforce, the right tools and partnerships make all the difference.

👋 At Oncore, we help enterprise teams simplify contingent workforce management with the right blend of tech, process, and expert support.

📞 Contact us today to talk through your current setup and discover quick wins.

💬 “Together, we can turn your flexible workforce into a strategic asset—not a financial risk.”