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Not a luxury, but a necessity – Managing your permanent AND contingent workforce

Who is your employee? Is it the person who has a permanent contract with your company and a place on the org chart? The contractor who was just hired on your project team? The temp who is filling in for a colleague on maternity leave? What about the robot that is assembling your products?

In today’s labor market, the notion of tenure, permanency and lifetime employment is gone. Where the traditional career was a linear, upward path, with employees remaining with a company for many years, often a lifetime, nowadays the career of choice resembles a lattice, with employees choosing projects that challenge their skills, working on and off for certain periods of time, and alternating their work life with sabbaticals to study, travel or take care of younger or older relatives.

Employees want to have a say in their work, and wish to design their own jobs, a practice known as job crafting. We also see shorter (3 or 4 day) working weeks, with people spending the other days volunteering at NGO’s, having a second job or getting an education.

On-demand Workforce

We can arrange everything in our lives on demand – eating, entertainment, shopping – but for many of us, work still means being at a fixed location between specific hours.

As the lines between personal and work life become more blurred, the notion of an eight hour working day is also disappearing, because more people work in virtual, global teams and must communicate with colleagues and customers outside of normal business hours and across time zones.

Companies are realizing that if they want to attract people to work, they must accommodate employees’ personal lives and create solutions that fit their individual needs.

Flexible Employment Status

It’s also in their own interest to not hire everyone as permanent staff. To remain agile and be able to respond fast to changing circumstances. Companies can use more short-term, flexible forms of labor, such as freelancers, contractors and consultants, as opposed to offering everyone a permanent contract.

This results in a more fluid, more temporary workforce, meaning that the people you work with in your team are less often permanent employees of your companies and people come and go as the needs of the company change. We call this the contingent workforce.

In the end, it comes down to setting up a flexible working environment, where work fits an employee’s lifestyle. It’s about offering a flexible workplace experience with alternative work arrangements that fit someone’s specific needs at certain stages in their life.

Talent Management

One thing though has not changed – as employer you still need to identify the best available talent, and when they work for you. It’s up to you to ensure that people are paid correctly, labor laws are respected and people work within the constraints of local legislation.

– How do you do that, when not all of them are permanent employees on your payroll?

– How do you know which contractors delivered quality work and should be rehired and which ones didn’t? And especially in larger organizations – how do you share that knowledge so other departments don’t rehire a bad performer in future?

– Or, from a financial perspective, how are you alerted to the fact that a contractor bounces around in the organization and works there year-round, so it might be more economical to put her on a permanent contract?

HR needs to integrate these contingent workers and the data about them, into select processes and practices to ensure that they’re fully productive, connected, and factored into strategic planning and analysis. For your permanent staff, you can look up these types of insights in the HR system, both from a cost and quality perspective.

Introducing an Integrated View of Workforce

So how do you ensure that you record information properly for people moving in and out of your workforce during the year? Adding them to your HRIS is usually not a good idea, because it can’t capture the right information, especially from the financial angle.

The contingent workforce doesn’t earn a salary, they send you an invoice. They are not on a pension plan, they don’t receive benefits, but you want to be able to rate their performance. So the challenge is to design this in such a way that it provides you with an integrated view on your total workforce, permanent and non-permanent staff included.

New cloud solutions bridge exactly that gap. They unify the records of everyone that works for you as part of the contingent workforce. Contingent workforce management solutions also cover adjacent business processes like procurement, statements of work and contract, project management as well as invoicing and payment.

You can store personal data and receive and pay invoices. You can also record use of company systems, arrange for access badges and other company property to be assigned to them.  You can manage all aspects of your contingent workforce including advanced functionality like category-specific supplier management practices and analytics using data modeling and optimization.

All of the above allows a company to properly procure, manage and optimize their flexible global workforces, including contingent labor, services managed through Statements of Work and independent contractors.

‘What-if’ Scenarios

Ultimately, having an integrated view on your permanent and non-permanent workforce allows you to analyze what-if scenarios;

– What if you suddenly experience an upswing (or downturn) in demand for goods and services?

– Can you handle that with permanent staff? Is that the most efficient and effective solution?

– What if your preferred temp agency can’t fulfil requests, do you have a second choice available with quality resources that you know will enable you to keep your delivery commitments?

Conclusion

Contingent workforce management systems enable you to pull all workforce data together and provide you with a comprehensive view and understanding of your workforce. In the highly competitive business environment of today, where talent is procured globally, that is not a luxury but a necessity in order to survive and be successful.

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