Key takeaways
Most contingent workforce programs aren’t failing because of poor management — they’re struggling with structural fragmentation across worker types, systems, and suppliers.
The biggest risks often sit outside the VMS, including unmanaged ICs, hidden SOW spend, inconsistent compliance, and off-contract hiring activity.
Rebuilding an entire contingent workforce program is rarely the answer; the most effective approach is closing specific operational gaps without disrupting what already works.
Integrated contingent workforce models help enterprises improve visibility, compliance, and hiring agility.
Ask anyone who manages a contingent workforce program at a large enterprise and they'll tell you the same thing: the program works, mostly, until it doesn't. Staff augmentation runs reasonably well through the VMS. Rates are negotiated. Suppliers are approved. And then a hiring manager in Singapore needs an AI contractor on a two-month engagement. Or a business unit in Germany wants to bring back a pre-identified freelancer they worked with last year. Or procurement realises the SOW spend that wasn't captured in the VMS is larger than anyone expected.
The program, it turns out, was only ever managing a portion of the actual external workforce. The rest was happening around it.
Ernesto Lamaina, GM at Lifted, has had this conversation hundreds of times.
“The contingent workforce ecosystem is inherently fragmented. That’s not a flaw, it’s a reflection of how the market operates. At its core, it connects people to jobs and companies to talent. By nature, a market built on so many variables will always carry a degree of fragmentation.”
The fragmentation isn't a failure of effort. It's structural. And for contingent workforce program managers to recognise that is the first step toward fixing it.
How programs get built and why they develop gaps
Enterprise contingent programs usually start with staff augmentation. A VMS gets deployed. An MSP is brought in to manage the supplier panel. Rate cards get negotiated. The program works for its original scope.
Then the workforce evolves. The IC population grows. Remote work normalises global hiring. Specialised skill sets appear in markets the existing supplier panel doesn't cover. Business units start engaging talent in ways the VMS wasn't designed to track.
Each gap gets addressed with a new solution. An AOR provider for the contractor population. An EOR for global hires in markets without a legal entity. A separate platform for managing SOW spend. A freelance marketplace for specific skill categories.
Within a few years, a typical large enterprise program looks like this:
Worker Type | Typical Management Approach | Common Gap |
Temporary employees | VMS + MSP + staffing agencies | Rate inflation, slow fill times for niche skills |
Independent contractors | Ad hoc AOR or direct engagement | Inconsistent classification, compliance exposure |
EOR workers | Separate EOR provider | Not integrated with main program data |
SOW contractors | SOW module in VMS or separate tracking | Hidden staff aug within project contracts |
Pre-identified talent | Individual contracts, often manual | No standardised onboarding or classification |
Freelancers | Marketplace or direct engagement | Invisible to the program, no compliance oversight |
Every row in that table represents a population that the program manager is supposed to have visibility over. Many of them remain partially or entirely unmanaged.
Why contingent workforce program managers are caught in the middle
The person dealing with this fragmentation most directly is the contingent workforce program manager. They sit between competing demands with limited infrastructure to resolve them.
Ernesto Lamaina describes the role:
“Leading a contingent workforce program is inherently complex. You’re balancing multiple stakeholders at once. Hiring managers who need talent immediately, procurement and senior leaders who expect both speed and cost control, and the talent itself, with rising expectations around experience, role quality, and pay. And layered on top of all of this is compliance, adding another level of scrutiny and complexity to every decision.”
That's four different stakeholder groups with four different definitions of success, all depending on infrastructure that was built for a narrower scope than the current reality requires.
Program managers aren't failing to see this. They're dealing with structural constraints that make improvement genuinely difficult. Changing a VMS mid-year is disruptive. Renegotiating MSP contracts takes time. Replacing a supplier that's underperforming in one category but solid in another creates its own risks.
The result is programs that keep running with the gaps, patching around the edges, while the problem compounds slowly in the background.
What staying fragmented actually costs you
The cost of fragmentation doesn't show up cleanly in a budget line. It distributes across multiple categories, which makes it easy to underestimate.
Here's a practical checklist of where fragmentation costs appear:
IC and AOR spend not captured in the VMS, making total program spend unknowable
Misclassification risk accumulating in the unmanaged IC population, visible only during an audit
Hiring managers building direct supplier relationships outside the program, creating off-contract pricing
Niche roles taking three to four weeks to fill because no approved supplier covers the skill set or geography
Redeployment of proven contingent workers requiring a full sourcing restart because there's no live availability data
Compliance standards varying by supplier, creating inconsistent documentation trails
Program adoption declining as business units route around a process they find too slow or complex
The last point matters most. A program that hiring managers don't trust or use consistently doesn't just fail on compliance. It fails on cost, visibility and speed, because the activity is happening outside it.
Don’t disrupt what’s already working
The instinct when confronted with a fragmented program is to think about a whole redesign. New VMS. New MSP. New supplier structure. Clean slate.
That instinct is usually wrong.
Large programs represent years of relationship-building, process refinement, and institutional knowledge. The approved supplier panel is not just a list of vendors, it's a set of working relationships that took time to establish. The VMS configuration reflects decisions made by people who understood the business requirements at the time.
Ernesto Lamaina's framing on this is clear:
“Lifted isn’t here to replace what companies have built. There’s a reason their programs are structured the way they are, they’re already optimizing for something. Our role is to fit in, meet them where they are, and help them achieve those goals more effectively.”
The better approach is additive. Identify the specific gaps , the worker types not well-managed, the geographies with slow fill times, the compliance exposures in the IC population, and find solutions that close those gaps without disturbing what's already working.
That's a different conversation from "your program is broken and needs to be rebuilt." It's a conversation about which one thing to fix first.
What a working fix looks like
The programs that successfully reduce fragmentation tend to share a few characteristics.
They start out specific. Rather than attempting a full program overhaul, they identify one gap , an unmanaged IC population, a sourcing gap in a particular region, a compliance issue in a specific worker category, and close that gap with a targeted solution.
They choose suppliers with horizontal capability. A supplier that can handle IC, AOR, EOR, and staff augmentation within the same platform reduces the number of relationships the program manager needs to maintain. It also creates a unified data source for workforce visibility across worker types.
They integrate without disrupting. The right supplier should onboard into the existing VMS or MSP program as any other vendor would , no workflow overhaul, no platform migration. Anything that requires significant program restructuring to implement will face adoption resistance.
And they use success to build the case for expansion. One visible win , faster fill times in a previously underserved category, or compliant classification for an IC population that was previously at risk , builds the internal credibility to expand the solution to additional worker types and regions.
Ernesto Lamaina describes how this plays out in practice:
“The strength of Lifted is its modularity. Clients don’t need to adopt everything we offer, they can use only what they need. If they already have staff augmentation or EOR in place but need support with independent contractors or AOR, they can engage us for just that, and we’ll deliver exceptional results in that area.”
The fragmented program doesn't have to be solved all at once. It has to be solved systematically, one gap at a time, with solutions that don't create new disruption in the process of closing old ones.
Frequently asked questions
Why is the contingent workforce ecosystem fragmented?
Because it evolved organically. Programs were built around staff augmentation, then extended to cover IC, EOR, SOW, and freelance populations through separate tools and providers as those workforce types grew. The result is multiple systems that don't share data or standards.
Can fragmentation be fixed without replacing the VMS?
Yes. A VMS replacement is one of the most disruptive changes a contingent program can make. Most fragmentation can be addressed by adding suppliers with broader capability into the existing program structure.
Why do hiring managers go outside the program?
Primarily because the program is slower or more complex than the alternatives they can find on their own. Fixing adoption is more about removing friction than adding enforcement.
What is the first step toward reducing program fragmentation?
Identify the specific gap creating the most operational or compliance risk , commonly the unmanaged IC population , and find a supplier who can close that gap within the existing program structure.
Author
Ernesto Lamaina
GM at Lifted
Ernesto Lamaina is the General Manager of Lifted, an Upwork company dedicated to helping enterprises source, engage, and manage contingent talent across every contract type—independent contractors, staff augmentation, employer of record, and managed services.
