According to a recent Deloitte report, the number of non-employee workers can, at times, constitute up to 40 percent of an organisation’s workforce. Not only has the percentage of non-permanent employees increased, but also their roles have expanded to include interim management, contractors with specialised skills, and coaches.
So how are you managing your Contingent Workers? Think about this – from the point of realising you need them, to the point of engagement, on-boarding, governance and assessment. Do you have two streams of management behaviours in place? Why? Isn’t this costly for your business (from both a time and a resource perspective)?
Let’s take a look at the various categories of talent (such as contract, freelance, Statement of Work, employee) and the risks and rewards associated with including your Contingent Workers in a Total Talent Management approach.
The Definition of “Total Talent Management”
In this context, we refer to ‘Talent’ in the human realm. So, the expertise, skill, knowledge, and capability of individuals to achieve specific tasks & outcomes within the workplace. ‘Total Talent’ refers to entire scope of human resources of ‘talent’ including employees, independent contractors, temporary workers, part-time workers, seasonal workers, offshore workers, Statement of Work workers, professional services, outsourced services and freelancers you find online and pay ‘per task completed’.
Outside of the human scope of talent, you have the ‘automated/robotic’ side, which can include robots, bots, software, automation in manufacturing plants, drones, augmented reality, and other software based or technical resources for achieving business goals.
Until recently, a strategic approach to talent engagement & management was held exclusively for employees alone. Today, when an employer seeks to have a job, task or project completed they’ll take a broader scope in fulfilment, whereby all sources of talent are considered:
- Statement of Work workers
- Independent Contractors
- Contract Workers
What’s driving the shift to TTM in Australia?
A couple of reasons:
- Organisations are looking to contain fixed costs, and establish greater headcount flexibility;
- The need for greater agility today – organisations needing to be increasingly responsive within this new economy where commerce is ‘live’ and always-on. Not wanting to miss the opportunities this dynamic presents;
- There’s an increasing shift, in many industries, towards project based delivery (product and services based). Demarkation of talent management, between perm and contingent, is hence becoming increasingly irrelevant, redundant, costly, inefficient;
- On the worker side of the equation, upcoming generations have less desire to establish long-term careers as employees. The desire for flexibility is a major driver in this shift.
Key considerations for achieving successful TTM: Changing your approach to Contingent Workers
- Why are they interested in doing this job?
- Is it money, the chance to develop new skills, the opportunity to work with certain people?
- What are you giving the person in exchange for their expertise? Is it JUST money?
- Asking contractors up front helps you to get to know them better – a situation that simply won’t be in place like it is for your permanent employees;
- Once you understand what they want, make sure you deliver on it.
By simply engaging in the conversation of what non-permanent talent want from working with you, you’re starting to engage ALL talent in the same way, you’re mindful of delivering on their expectations, and you’re giving them equal footing as a talent resource (no more, no less than perms).
Setting expectations for their performance
- Make sure you’re VERY clear of what you want in return for their services – as you would for a new permanent hire;
- Be prescriptive about their delivery;
- Be detailed about how you expect them to engage within the work culture & environment;
- Spend time talking to them about what the business goals are, of the project you have them working on – as you would for employees;
- Provide context around the work you expect – Impact that this work will have at different levels of the business.
Building strong relationships
- Don’t treat them as a commodity, or a transactional element of your workforce – you need to strike a balance;
- It’s okay to get to know them. Ask them about their family, weekends, hobbies. This gives ALL talent in your scope a position within the culture of the team;
- Get to know their other skills, think about your future business needs, and how this person (or others in their network) may help you fulfil these.
This is really important if you wish to continue engaging this person in the future.
Making them feel like a part of your team
Freelancers & Contingent Workers are better engaged, more productive, and happier, when they feel like they’re part of the team. Where possible you should always:
- Avoid the status differentiators that makes these workers feel like they’re second rate;
- Draw a fine line between treating your contractors as ‘staff’, and making them feel welcomed (avoiding ‘assumed employee’ status)
Giving them thoughtful feedback on their performance
There’s generally no requirement for a formal review with Contingent Workers. However, by being open & honest with your feedback on their work, you’ll garner greater understanding of expectations, mutual respect, stronger level of engagement, and ultimately betters results.
HR’s role in the engagement of ALL talent – business partners with greater strategic input
Establishing the right workforce metrics – including measurable results – is critical in the current shift from full-time employee worker populations, to an increasingly contractor based one. Here’s where HR comes into play.
HR needs to take on a more strategic role in linking talent investment to business performance. They need to have a better understanding of what levers to pull to deliver business projections and outcomes, from both the full-time and the contract workers within their organisations.
However, this has proven to be very difficult traditionally, where the data available from the use of Contingent Workers is kept separate to that of full time employees. The lack of data integration across all business functions has made it difficult for HR to have the reporting capabilities required to make more informed decisions about the type of talent required.
This is changing, though, due to the movement towards TTM, where greater cost & output efficiencies are needed to maintain competitive advantage. A cohesive approach to engaging and managing talent – ALL talent – is the money spot here. And data sits at its core.
- ACTIONABLE INSIGHT: in order to connect the workforce to business outcomes, and be able to report on this, investigate cloud-based workforce solutions. There are turnkey options today, that enable the integration of data from all corners of a workforce, that will enable your organisation to make better talent decisions.
The role of Managed Service Provider/Vendor Management System
“As employers increase their reliance on flexible workers and the gig economy expands, HR … are embracing the concept of total talent management (TTM) and becoming more involved in MSP programs.” – www.staffingindustry.com
Today’s Managed Service Provider (MSP) is a more strategic service solution than the transactional solutions of years past. It’s role is increasingly to provide the organisation with a resource that will take on the challenges of the gig economy, and allow organisations to make better, more informed decisions to achieve desired business outcomes.
Some MSPs are starting to converge with Recruitment Process Outsourcing (RPO) – where the MSP achieves the optimum mix of full-time and flexible workers, through both talent pooling and strategic partner (vendor) alignment. MSPs are also moving into the realm of succession planning, staff retention, compensation and cultural diversity – r a ‘complete’ talent solution.
Today’s MSP are looking to establish the ultimate blend of SOW workers, independent contractors and/or freelancers who are paid on specific fixed-fee tasks where deliverables are finite. As a result, MSPs are changing their sourcing approach to accommodate ‘talent in the cloud’, and the accessibility of on-demand workers (this also affects the invoicing systems used by MSPs)
- ACTIONABLE INSIGHT: investigate the expanding opportunities offered by today’s MSP, and VMS software, for a better, more integrated talent engagement and management solution. Review those MSPs that are industry based models, where the one-size-fits-all MSP is sidelined, and specialist service providers can help to better move your talent management practices to a highly-functioning TTM solution.
This article is sponsored by CXC Global.