Category Archives: Contingent Workforce

The growing influence of the contingent workforce

By: Penny Queller, Senior Vice President, Global Solutions

First Seen on The Staffing Stream 12/12/13

As we wind down another year and set our sights on the future, we can expect to see more evolutionary changes in the workplace brought about by the growing influence of the contingent workforce. While experts differ on penetration rates, it is clear that the contingent workforce is growing in both size and influence, beyond the ability of employers to either ignore or marginalize this increasingly important contributor to organizational performance and the achievement of growth goals. Even as some organizations adopt highly sophisticated strategies to leverage the potential of the contingent workforce, others struggle with basic questions about how to manage this resource; in some cases, with HR, procurement and business leaders drawing straws around the issue.

Redefining the Workforce
Walk into any office, factory, call center or distribution facility today and you will likely see both traditional employees and contingent workers side-by-side. It would be highly unusual if you could tell which are contingent workers and which are not. As a rule, they do not dress differently or sit in isolated areas, separate from employed staff. While they might carry a different type of access badge, you would probably have to get up close and personal to distinguish one from another. In fact, in a typical workplace, you might see several different types of “non-traditional” workers, e.g.:

  • Flexible staff employed by a staffing agency
  • Independent contractors
  • Project consultants (also known as SOW consultants)

Take a closer look at independent contractors—or 1099 staffers—and see if you can tell which are truly independent or those that are company-sourced (possibly through internal referrals or alumni networks) and simply payrolled by an agency.
Today’s workforce is a blended workforce. It is made up of individuals, both on and off the host company payroll, whose common bond is the work rather than who pays them. While the makeup of the workforce has changed significantly, workforce policies, practices and management structures in many organizations have not yet caught up to the new reality. They remain a work in progress as businesses struggle to define new ways to manage the new workforce.

The Impact of the Contingent Workforce
The growth of the contingent workforce impacts not only the way work gets done, but the individuals doing the work and the managers who oversee it all. Consider this:

How the Work Gets Done

  • Project teams comprised of traditional employed staff and contingent workers may collaborate seamlessly, but who gets rewarded—and how—at the successful conclusion of the project when reward systems must be separated to avoid the risk of co-employment issues?
  • When contingent workers complete discrete tasks in a larger enterprise initiative, can they give their best if they do not see the results of their efforts?
  • Is information shared differently with employees vs. contingent workers (which can lead to division within a project team), or conversely, are contractors given access to too much proprietary information?

Who Does the Work

  • When contingent workers are brought in for their unique skills and experience, how can you ensure they mentor employees and transfer knowledge?
  • Does managing your contingent workforce put an additional strain on employees?

Who Manages the Work

  • Which function is best suited to handle the acquisition and management of the contingent workforce? Is it procurement, HR or business managers?
  • How can you promote greater collaboration across all three areas of responsibility so that you get the benefit of the expertise that each can contribute?
  • Do business managers who supervise contingent workers understand how this differs from managing employees?

The new workforce calls for new ways of configuring the work, blending teams to get it done and managing the different types of talent doing the work.

The Enterprise Perspective
There are bigger issues to be considered from an enterprise perspective. While contingent workers carved a unique niche in the workforce decades ago as a temporary, occasional or ad hoc fill-in for employees on leave, in the past 20 years, the contingent workforce has become an integral part of the workplace and an important contributor to how work gets done. How do you drive engagement within a blended workforce? Can traditional roles and responsibilities be adapted to accommodate inclusion of a contingent workforce or should you start with a blank page and rewrite all the rules? With lots of questions in search of answers, one thing is certain: workforce strategies must continue to evolve to fully leverage the potential of the contingent workforce to drive high performance in the workplace.

Can You—or Your CFO—Identify the Contingent Workers on this Team?

By: David W. Barfield, CEO

First Seen on The Staffing Stream 8/8/13

What does a contingent worker look like? This was a question I posed during CFO magazine’s webcast, “The CFO Playbook on Human Capital – The War for Talent: How to Better Recruit and Retain the Best and the Brightest.” I sat on a panel with a distinguished group of executives who explored the changing role of CFOs and the finance professionals who support them, as well as the strategies organizations can employ to win the war for talent. While the panelists offered outstanding insights into the CFO’s transformation to a more strategic and analytical role, as well as the new, broader set of skills finance professionals need to succeed in highly competitive global markets, they focused exclusively on the traditional “employed” workforce. My perspective, as you might guess, centered on the best and brightest in the contingent workforce and ways they can—and do—play an increasingly significant role in addressing the critical talent challenges organizations face today.

The Transformative Role of the CFO
The role of the CFO is definitely changing. The CFO now functions as a chief analytics officer. To capitalize on the proliferation of big data, CFOs need a team of finance professionals who not only collect and report data but analyze and synthesize insights from it. Rather than simply documenting facts and figures, they need to participate more proactively in business operations. With this broader slate of responsibilities, executives are questioning how they will get the work done. Where will they find the talent they need and how will they retain it?

A New Strategy in the War for Talent
One way to address talent challenges is to more effectively leverage a workforce that is already working for you—the contingent workforce. While many companies completely ignore this growing pool of talent, those that leverage it effectively are competing and winning.
According to the Staffing Industry Analysts 2013 Contingent Buyer Survey, respondents say their use of contingent workers continues to rise, from an average of 12% in 2009 to 18% in 2013. In some companies, the use of contingent workers is substantially higher. In fact, I recently met with a Fortune 500 company whose CEO wants a workforce that is balanced 50/50 between traditional employees and contingent workers. This is clear acknowledgement of the strategic value the contingent workforce can deliver.

Capitalizing on Contingent Workforce Value
Leveraging the contingent workforce requires visibility, the kind the “new” CFO thrives upon. As the steward of business intelligence, the new CFO has an opportunity to harness the big data that exists in non-employee talent pools. Who are these people, what are their skills, how are they performing, what is the best way to deploy them? Are they in core or non-core roles? Are they adding capabilities not native to the organization or backfilling required functions to free up internal talent for more strategic tasks? The answers can help you build a human capital engine that is more flexible, cost effective and nimble.

So What Do Contingent Workers Look Like?
Going back to the question I posed earlier, can you tell employees from non-employees in the picture? The answer is: it doesn’t matter. From a collaboration and cultural integration perspective, think of contingent workers in much the same way as you view your employees. Further, you should take steps to ensure their success by doing the same types of things you do with your employees: on board them seamlessly, set them up to be productive ASAP, establish clear goals and expectations, communicate frequently, help them understand how they fit into the bigger team and why their work—short term or long term—matters to the organization’s future.

Contractors and freelancers often have skills that your own employees don’t. That means you need them more than they need you. Companies that make it easy for contingent workers to engage will win the war for talent. Is your organization leveraging non-employee talent or is it an untapped gold mine waiting to be engaged?

Is Your MSP Program A Source of Innovation or Eligible for Social Security?

By: Andrew Erlichman, Sr. Solutions Consultant

MSP programs are both widespread and mature. Staffing Industry Analysts (SIA) reports that 69 percent of respondents in its latest buyer survey use an MSP to manage their contingent workforce programs.  More than 50 percent of those programs have been in place for more than three years. If yours is a mature program, does it continue to uncover ways to generate new value or has momentum slowed to a crawl?

Signs of MSP Program Maturity
What can you expect from an MSP partner once all the low-hanging fruit of an unruly contingent workforce program is picked? At the beginning of an engagement, the focus is on implementation. Once MSP programs have firmly established procurement and HR protocols, policies and process standardization to mitigate risk and manage costs in contingent workforce management, what’s next in terms of value generation? Many programs tend to get mired in a continuous cycle of improving operational performance. Not a bad place to be, but it represents a plateau that can stall forward momentum.

Great Starters Sometimes Run Out of Steam
Just as some people are great at getting new projects off the ground, some MSPs are implementation impresarios but are challenged to take mature programs to the next level. The initial job of every MSP is to ensure the solution delivers expected benefits. The original RFP for a centralized contingent workforce program lays out clear objectives. The MSP begins implementation with those goals in mind. It pursues compliance with KPIs and SLAs, savings targets, legislative mandates and company policies. Achieving program goals, however, requires a good deal of down-in-the-trenches execution. Implementation, which should be the initial focus only, gets stretched to mop up lots of out-of-scope activities that only became apparent as the new policies and practices become institutionalized. Quarterly updates tend to get mired in a review of operational efficiencies, a restatement of issues, challenges and risks, and a report card on supplier optimization.

Avoiding the Innovation Plateau
After a year or two, every MSP program should reach a steady state. Your MSP partner should be doing more than reporting progress at quarterly business reviews. While an MSP should always work to improve the current state, sometimes too much focus on operational oversight rather than strategic progression can lead to programs that grow stagnant because the MSP is too heads-down handling today’s tactical challenges to stay on top of industry advances. It may be rare for an MSP to proactively uncover blemishes that suggest the need for a phase 2 program, but your MSP should always maintain a big picture view in order to leap beyond this stage to uncover new avenues to optimize value in your contingent workforce program.

Restating MSP Program Objectives
At a minimum, there should certainly be a restatement of goals. Beyond that, your MSP should be tracking what the industry is doing. Can your MSP help you gain a new competitive advantage in the marketplace through contingent workforce analytics and innovative solutions for direct hire, SOW, IC?

Moving from Maturity to Innovation
Phase 2 MSP programs evolve the solution to meet new and changing organizational needs, from talent strategy alignment to supply base globalization. They assess and recommend program efficiencies and consider VMS technology maturity. They introduce innovative services through a focus on strategy, planning and long-term optimization. When your MSP is a true consultant and strategic partner rather than a tactical solutions provider, you open up opportunities for greater value generation.

As a consumer of MSP program benefits, what do you want program maturity to deliver to your organization? Share your thoughts.

Contingent Staffing Risk: Reduce or Eliminate?
Which Would You Choose?

By Rebecca Blankenship, Director of Human Resources

The staffing industry is dedicated to supplying great talent. Sometimes, however, best efforts fall short and a bad apple slips through. Therein resides the risk of using contingent workers. When the contingent workforce is sourced from multiple providers, both risk and complexity increase—from operational and productivity risks to financial, security and regulatory hazards. There is also the potential for harm to the company’s reputation, brand equity and customer relationships.

Miseducation and misunderstanding in onboarding contingent workers is often ground zero for employment risk. When mistakes occur, the customer, the staffing agency and the MSP are at risk. Many organizations rely on compliance audits to identify weaknesses in their onboarding practices. While this rear-view mirror approach certainly supports a goal of continuous improvement, it often entails a messy cleanup. Wouldn’t it be far better to eliminate the need to correct onboarding errors by ensuring an error-free process?

Onboarding Compliance Is Complicated
Filling jobs is typically an activity with a short timer. Speed is of the essence. Get the order, find the candidates, and run them through an onboarding checklist of both staffing agency and customer requirements. Such checklists can include:

  • Pre-employment screens and verifications (e.g., drugs, criminal history, education, employment)
  • Safety training
  • Badging
  • System access
  • Facility orientation
  • Time reporting procedures

And it is all accompanied by multiple policies, practices and forms to be reviewed and completed in record time.

Onboarding is somewhat like drinking from a fire hose. Whether it’s a missed screening by the staffing agency or a misunderstanding about how to fill out a form by the contingent worker, mistakes happen.
Case in point: If the contingent worker does not complete benefits waiver―to confirm their understanding that they are not eligible for the benefits offered to the client’s salaried employees―they could later claim they didn’t know and sue the customer, the staffing supplier and the MSP.

Mitigating Risk through Compliance Audits
Onboarding mistakes frequently go undetected until the MSP conducts a quarterly or annual audit of all staffing suppliers, comparing what is required by the client to what can be proven through documentation. When discrepancies are found in an individual’s records, the contingent worker may be terminated; the staffing provider may be penalized; customer satisfaction will definitely be impacted. While these actions will mitigate the identified risk (hopefully before anything bad happens), a potentially bigger issue is what might exist but not be uncovered due to the random nature of an audit. Businesses could pay a much higher price down the road due to unidentified risks that lead to productivity slowdowns, revenue losses, security breaches, safety incidents or even intellectual capital and trade secret losses.

How is this for irony? The IRS failed its own audit of pre-employment screening practices in 2010, reporting that it could not verify that proper pre-hire assessments had been completed for more than 75% of the hires it checked. It makes you wonder exactly who might have had access to all that personal data contained in the more than 230 million tax returns submitted by Americans that year.

Eliminate the Need to Back Track
It is possible to eliminate the need to correct onboarding errors by establishing a gatekeeper at the front end to ensure an error-free process. We have done this quite successfully with multiple clients. The gatekeeper reviews and verifies that all screening and all forms have been completed in accordance with customer requirements. The worker is not allowed to begin assignment until everything is 100% complete. Instances of noncompliance are addressed through supplier counseling and training to prevent future missteps.

Gatekeeping is labor intensive and slows down the hiring process somewhat. It also significantly reduces risk to both the customer and the staffing supplier by finding and resolving issues proactively rather than reactively during an audit.

Could a gatekeeper improve your risk profile? Have you tried any other methods to lower employment risk? Share your thoughts.

Contingent Workforce Solutions: Europeans Reject Cookie Cutter Approach

By Ton Mulders, Director Global Solutions

Contingent workforce solutions buyers, providers and industry experts met recently in Berlin, Germany to share ideas, observations and predictions about the state of the contingent workforce solutions industry in Europe. These kinds of industry events are a great learning opportunity. I always find that no matter how much I think I know there is always more to learn. I have three key takeaways to offer relating to growth expectations, unique approaches and the coming explosion of innovation

  1. The European contingent workforce industry is poised for accelerated growth and rapid maturation.

    With expectations of a soon-to-recover economy, attendees were optimistic about increasing adoption and growth of contingent workforce solutions in Europe, which represents 45% of the global contingent workforce staffing market. The adoption of more sophisticated strategies for managing the contingent workforce will probably happen at an accelerated pace that will far outstrip the decade it took in North America to reach program maturity.

    Anyone who remembers Europeans struggling with acronyms such as MSP and VMS a year ago can clearly see the rapid maturation of the market. Today, there is lots of buzz around contingent workforce solutions for everything from SOW to freelancers. It took more like 10 years for Americans to “get it,” but only four years for Europeans to integrate RPO into their solution sets

  2. Cookie cutter approaches won’t cut it in Europe

    Warnings were issued to beware of cookie cutter approaches. Giving a European twist to “not invented here,” suppliers―as well as buyers―were cautioned to avoid assuming that what works well in North America is equally applicable to Europe.

    A top priority is localization in terms of supply, culture, language and regulations as they relate to service delivery and VMS technology. Suppliers truly need to understand local needs. Doing a cut and paste from the U.K. to France will never cut it. Vendors need to understand nuances from one country and culture to another and provide technology that can accommodate local suppliers’ ability to operate in compliance with local regulations. A key question for buyers: Can the VMS conform to multiple and diverse features beyond language and currency and local laws? Suppliers who tout their ability to be localized are doomed to failure if they cannot truly adapt to the complexities of European requirements.

  3. Expect Europeans to leapfrog North American innovation and adoption rates in contingent workforce strategies

    Even though the European market is less mature than the North American market, it is far more diverse in terms of language, culture and regulation, which is not only more complex but frequently changing. Rather than replicating North American standards, Europeans will invent their own. They will learn from best practices and jump to adapt them to new circumstances. Watch European companies leapfrog the U.S. market to develop something more innovative than what American firms are doing. They will adopt only what makes sense for them. Rather than adapting current program models and structures, they are more likely to invent completely new ways to drive value in contingent workforce procurement and management. For Europeans, RFI means request for innovation.

Are you ready for the changes ahead? Have you already started looking into ways to be more strategic and drive greater value through contingent workforce solutions in your European operations? Planning to do so? Please share your experience.