Contingent Workers Growing in Percentage and Impact

Posted May 04 2014

contingent-workersThe “Contingent” workforce continues to increase in size and impact. These are contractors or temps or consultants who, contrary to full-time employees, are called to work when there is a need such as variability in or high workload or the requirement for special skills. Although cost savings have been the primary driver for using contingents in the past, savvy organizations are realizing that contingents are an important part of the workforce that can provide significant strategic advantage and huge benefits to organizations.

 

On Friday, May 2, Bryan Pena, Vice President, Contingent Workforce Strategies and Research at Staffing Industry Analysts was interviewed by Peoplefluent CTO Doug Ring about managing the growing contingent workforce. The entire interview can be viewed here.  

 

There is every indication that the contingent workforce will continue its rapid growth despite legislative efforts in certain locales such as California to restrict it. Economic insecurity is a big driver (e.g. dare we hire more full-time workers), but even in good economic times this part of the workforce can be expected to grow. Increasingly, organizations are hiring specialists trained to effectively manage contingent workers instead of just shunting this duty over to HR or procurement managers.

 

There are challenges to using contingent workers effectively. According to Mr. Pena, the biggest one is changing the mindset of leaders so that they understand that contingents provide more advantages than immediate cost savings. Companies with a strategy for using contingent workers effectively are still few and far between.

 

Secondly, organizations need to look at contingents as an extension of their regular workforce and understand that they should be treated similarly, not as second-class citizens. That means, for example, concentrating as much on contingent worker engagement, communication, and training as the company does with full-time workers. It also means that the company may want to make a special effort to capture the knowledge of contingent workers, perhaps on a project by project basis, before they leave the company. Finally, interaction between contingents and full-time staff should be facilitated, not stifled.

 

Another challenge is matching contingent workers effectively with the work that needs to be done. This is an even greater challenge given that the contingent workforce is often more broadly dispersed around the world. For example, is and accountant trained and located in the U.S. similar to one in Switzerland, and can they handle the same duties equally well? Something as basic as an up-to-date job description can help. Competency models and assessments are also critical, as well as clear information on experience and track record of success.

 

Optimization is the operative word when successfully merging full-time and contingent workers. Each type of worker is best in different situations. Analytics play a key role in determining how to use each most effectively. The process starts with a rigorous review of the organization’s needs, including the work to be done and the staffing implications of this work. Predictive modeling can sometimes help. For example, in the mortgage business, there is a direct correlation between interest rates and refinance applications. Interfacing of different technology systems may be critical in order to get all the necessary data. Next, it is important to understand the capabilities and competencies present in the internal workforce. At that point, the desired contributions of the contingent worker become clearer.

 

Those with a deeper interest in learning about how to use contingent workforces may want to take a look at Lean but Agile (AMACOM 2012).

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