The Pareto Principle, also known as the 80/20 rule, states that 80% of outcomes typically stem from 20% of inputs. This principle is highly applicable in external workforce management, where organizations can identify the small percentage of contractors, vendors, or workforce strategies that deliver the majority of results.

The Pareto Principle guide in making strategic decisions about workforce optimization. Organizations can use it to streamline processes, reduce inefficiencies, and allocate budgets effectively.

This principle ensures that limited resources—time, money, and attention—are concentrated where they create the most value.