If yours is like many forward-thinking organizations, you have joined the contingent workforce revolution. Company leadership is convinced the flexibility, scalability, and savings non-traditional workers deliver will make the firm more efficient and productive. Procurement and Human Resources have worked out a way to collaborate and manage independent contractors, statement of work providers, freelancers, and other consultants to your best advantage. And you have positioned your company brand to attract the most talented workers available.
Contingent workforce strategies have emerged in part to combat the shortage of specialized talent needed to quickly develop and implement customer and internal-process solutions. A reliable source of competent external employees can help organizations deal with fluctuating demand, changing regulations, and emerging market opportunities. It can smooth over the rough times created when key employees quit or retire.
Many of our previous posts discussed “big picture” considerations for establishing and implementing a wide-ranging contingent workforce management program. Over the next month we will drill down into the details and the how-to aspects for controlling costs and handling labor suppliers to your best advantage. Controlling labor costs while achieving the most effective talent portfolio possible will determine how well your organization accomplishes its mission and collects sustainable profits. Following are some of the topics we will delve into in the coming weeks. Be sure to check back often; the devil is in the details. Standardizing and automating as many of the routine functions as possible will reduce accounting, regulatory, and payment processing errors.
Today’s managed service providers (MSPs) struggle to distinguish themselves in an increasingly fragmented and competitive market. Locked into easy-to-duplicate service suites and slow to develop and adopt game-changing technologies, MSPs cannot easily unlock innovation, add creativity to their portfolios, or develop value-added services. As a result, they are forced to compete on price, slicing their profit margins ever more thinly as they cling to dwindling market share and relevancy.
You stand to gain many advantages when your organization hires a managed service provider (MSP) to handle your contingent workforce needs. Entrusting an MSP to identify and manage a stable of temporary staffing vendors, ensure fulfillment of worker orders, assure compliance with tax and labor regulations, and provide other services can deliver peace of mind and allow the company to focus resources on creating value and developing market share. But outsourcing the external workforce management function does not mean you can sit back and forget about how you engage contractors and freelancers. On the contrary, working with an MSP still requires in-house oversight, strategic direction and constant drive to improve workflow. Only by establishing a true partnership with your MSP can you realize the cost savings and efficiency gains outsourcing the contingent workforce function promises.
Racing to capture all the cost-saving and productivity advantages an agile workforce provides, work organizations need to expand their programs to encompass more sophisticated and complex types of external talent. They often find themselves striving to create efficiencies in three key areas:
The nature of work is changing, and companies that don’t adapt the way they find and utilize talent will be left in the dust. That’s a scary proposition for many firms that either prefer the traditional, full-time workers with 30-year careers model or have made little progress toward a plan to manage non-traditional workers. As robots, machine learning, and other types of automation eliminate the need for human intervention in many routine and low-skill tasks, identifying and capturing specialized skills have created the new frontier of competition within every industry.
When it comes to workforce management resources, size definitely does matter. Large enterprises simply have more money, more mature internal processes, and more connections to expertise than smaller companies. Bigger firms possess the capital to invest and infrastructure to support VMS workflows and the time horizon for these investments to pay off. Mid-sized organizations, on the other hand, generally have been forced to treat contingent workforce issues on a case-by-case or ad hoc basis. Limited staff, less-mature processes, and cash-flow constraints constrain smaller businesses into transactional, rather than strategic, management of their full-time and non-traditional talent. Often occupied with putting out skills-acquisition brush fires, mid-market firms have little time with which to build platforms or engage the outside know-how they need to streamline their talent workflow. They likely have implemented a contingent workforce policy and understand the cost-savings and flexibility advantages to be gained by utilizing statement-of-work contractors, freelancers, and other external workers, but they lack the inputs for integrating the processes of finding, recruiting, working with, and paying them.
Organizations’ first experiences with the contingent workforce often come incrementally. They hire some seasonal sales reps or inventory help. A few months later they work with a graphics consultant on an event logo. Then the next year maybe they contract with a freelance writer for a drip marketing campaign. Before they know it, what started as a few isolated transactions undertaken to capitalize on a special opportunity or overcome an unfamiliar challenge evolves into a major component of the firms’ go-to-market approach.
No matter where we are in the economic cycle, the competition for the best talent rages on. Much like the war for customers, companies must leverage their brand positioning to attract, recruit, onboard, and retain people with the skills they need in order to remain successful. Companies have long understood this concept, of course, creating a corporate persona that projects stability, industry leadership, and other characteristics that employees value. But today’s productive teams include more than just full-time employees. To obtain the mix of abilities required to meet customer needs and adroitly implement projects, companies seek to tap into all the labor resources available to them. Statement-of-work workflow consultants, freelance writers, independently contracted accountants, seasonal sales representatives, and other contingent workers increasingly are adding their talents to work teams.
© Copyright 2023
