Outsourced, embedded, freelance and subcontracted employees contribute to many industries, and various forecasts have shown that the use of such contingent labour will increase in the future.
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One of the main reasons for this anticipated growth is the operational efficiency and agility that come from a contingent workforce. This includes more efficient management of costs, project assistance, and the outsourcing of repetitive work to enable departments to focus on more strategic issues. It’s also often a way to access specialist skills that a company would struggle to recruit itself.
The variety of such service partnerships is also expected to expand. For example, think of a contingent workforce for a whole function, such as your finance department.
Growth will also be seen in the typical industries that use a contingent workforce. In the past, the organisations with the highest contingent use were in project-focused industries, such as resources and mining, construction, engineering and IT, and workers were engaged for a defined period of time associated with the completion of a project. This is now starting to shift, and more organisations outside these industries are looking to increase the percentage of their contingent workforce from less than two per cent to between five and eight per cent as a first step and an increase towards 25 percent over the coming years.
Getting insights in your workforce
So with the use of a contingent workforce set to increase, how can you future-proof your organisation to ensure you get the most out of the arrangement? Apart from partnering with an expert in outsourcing solutions, it is important to gain visibility of your contingent workforce. This is the first step in putting an effective contingent workforce programme in place.
Many employers know they have sizeable populations of non-permanent employees but don’t know how long they’ve been in their organisation, what site they are employed on, or even if they are paying them over or under market rates. They don’t know if they are directly engaged, provided by an agency or being supplied under a SOW that is really just a time based agreement with no guarantee of outcomes.
By improving visibility you’ll significantly reduce employment risk. For example, and this is a worst-case scenario, with poor visibility if a non-permanent worker was injured onsite you could discover that not only did you not realise they were working on that site, but that they had not gone through the right induction process, and background checks were not completed.
Visibility can be improved by centralising your data, ideally in a vendor management system (VMS) but if that is a step too far right now, a simple point in time data collection process will still help. Certain organisations may do this using an applicant tracking system or HRIS system but even collecting some static data into a spreadsheet will give you a starting point. Not knowing what you don’t know is a dangerous place to be and the investment in resources or time to achieve even basic visibility will be worth it.
For clients who have reduced this risk by improving workforce visibility, efficiency gains and cost reduction can become the next focus. Within three to six months depending on the makeup of your organisation, you can improve efficiency and costs through your contingent workforce by benchmarking pay rates, driving sourcing into the cheaper channels, building a referral network and ensuring effective supplier negotiation. Once that is done, you can then move on to the next big area – your statements of work engagements!
Valuing all of your employees
As a final suggestion, your non-permanent employees should have the access to learning and mentoring opportunities. This extends from the induction through to career planning. As a manager, you have to get your whole team – both permanent and non-permanent – to see that they have a contribution to make, that they are valued for that contribution, and that you care about their career and how their contribution will benefit their long-term career growth.
On a practical level, this could involve offering access to internal job boards or project-specific training opportunities – anything that might foster skills that could improve the ultimate outcome. Of course, HR needs to ensure that any transfer of talent between partners does not impinge upon the contract of an agreement. However in general by offering development opportunities to non-permanent as well as permanent staff you ensure your organisation gets the most benefit from its workers, fosters loyalty and enhances your organisation’s reputation as an employer of choice.
While you cannot always exercise direct control over non-permanent staff, by setting clear parameters about how performance will be measured and how issues can be raised, improving visibility, making efficiency gains and reducing costs, and paying attention to the career progression of all staff, you’ll be prepared and able to get the most from tomorrow’s growing contingent workforce.
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