How a Variable-Cost Workforce Model Addresses Headcount (and Other) Challenges

12.9.2015, Written by Annie Wang


A version of this article was originally published online by Business Solutions Magazine.


Running a successful IT practice is hard work. This is made all the more difficult by a fixed-cost workforce model, which is currently employed by many IT providers. Indeed, headcount, whether it is too high or too low, as well as quality, can severely limit an organization’s ability to scale and succeed. However, there is a paradigm-busting movement in how organizations and companies are completing their work.

The convergence of mobility, changes in societal habits, and fluctuating philosophies regarding permanent hires have given birth to a powerful and effective freelance movement. For IT solution providers who aren’t locked into the notion of a traditional, fixed-cost workforce model, a variable-cost freelance labor force can introduce new and nearly unlimited opportunities in innovation, growth and success.

Many companies face constraints around headcount and live on a never-ending treadmill of right-sizing and optimizing cost structures and business demands. This often results in the inability to operate at a perfect or optimal capacity and rather leaves companies over or under headcount limits at all times.

For most, employees represent the most significant cost center for an organization. Solution providers are oftentimes hesitant to hire full-time workers as they are unable to ensure future sales or determine whether their demand can support additional headcount. With a variable-cost workforce approach, companies can rapidly right-size their talent and labor to meet organizational demands.

Finding and leveraging the best talent due to company standards is another common issue, one that results in mounting pressures from clients who demand certain soft and hard skills to ensure a quality customer experience. While these pressures exist whether a fixed or variable-cost model is being utilized, it is exceedingly difficult to meet demand fluctuations in client or supply-chain vendors with a fixed-cost workforce. The flexibility offered by a variable-cost workforce model enables organizations to dynamically adjust skillset, competency, and certification requirements as they come up over time.

Variable-cost workforce models also enable companies to find the right people at the right time, as well as take advantage of skill and performance verifications that meet client expectations. It is relatively easy to address skills gaps using a variable-cost workforce model as it grants accessibility to a highly-skilled freelance market that boasts specialized skills and certifications on a local and national scale.

Additionally, the ability to manage cost, capacity and quality can stimulate further revenue growth for organizations. The reality of shrinking margins or intensified competition for software and hardware product sales have prompted many solution providers to expand their stack of services to create or expand their revenue through service lines of business. By leveraging a variable-cost workforce structure, solution providers can expand into these service stacks while controlling the cost, quality and scale of these endeavors. Historically, solution providers who have adopted this model have been able to drive incremental revenue by 20% by extending their workforce and adding or expanding upon existing service revenues in their services stack.

The value that a variable-cost workforce model offers clearly addresses several primary pain points that are faced by IT solution providers. But what should a business look for when seeking out an ideal variable workforce provider? Here are several things to keep in mind when evaluating an online provider:


  1. Transparency: Make sure the provider offers true transparency into its freelance network. If an organization is on the “buy” side, visibility into the quality and service record of the “sell” side is critical. Some platform companies take a hands-off approach when it comes to ensuring the quality of demand and supply within their marketplace; to ensure a positive investment, pick a partner that minimizes risk by removing guesswork through a ratings and review system, as well as one that implements a quality assurance program.
  2. Customization: The best providers are those that work closely with their user-base to help release new products and features. This promotes the platform by making it more powerful and relevant in their space.
  3. Updates: Providers should invest in continued improvement through regular updates and refreshes to their systems and release cycles.
  4. Mobile Offerings: Today’s workforce is mobile and regularly checks into worksites, checks off tasks, and communicates with clients while on-site and on-the-go. Having a robust mobile application is key in empowering users to get work done anytime and anywhere.
  5. Integrations: Most businesses have software that serves as the backbone of their operation. Whether it is a PSA or other CRM software, organizations should seek out an online provider that integrates with their critical technology and allows them to leverage it without locking them into a complicated, long-term contract.


Implementing these best practices will enable organizations to take better advantage of the benefits offered by a variable-cost workforce model with regards to their headcount, client and supply-chain demands. To learn more about variable-cost workforce models or to see how one could benefit your business today, visit Field Nation.


A version of this article was originally published online by Business Solutions Magazine and was written by Jeff Parris, EVP of Sales at Field Nation.