With crucial skills available through a variety of platforms, sources, and structures, companies intent upon building a strategic workforce must consider optimizing their use of full-time employees as well as consultants, contractors, freelancers, and other contingent workers. As creating a best-in-class workforce management plan can establish sustainable competitive advantage, finding, hiring, training, paying, and managing contingent workers is rapidly becoming mission critical for many firms. Adequately accounting for the risks, costs, and quality issues involved in using external workers will be one of the most important management concerns as the use of non-traditional workers inexorably rolls on.
Who's in Charge?
In many cases the two main benefits companies accrue when engaging contingent labor – cost savings and access to critical skills – create internal conflict over which managers and departments are best suited to accomplish the workforce management task. On one hand, Human Resources may seem the ideal department to make important decisions regarding contingent workers. The professionals in HR generally keep a finger on the pulse of the organization’s human capital needs, and HR’s value, after all, lies in finding, developing and retaining workers. On the other hand, the Procurement department is well-versed in working with suppliers to control costs and ensure the organization maintains reliable sources for all its production needs. And what is external labor if not a critical resource material to be economically identified, amassed, and utilized?
Many companies have yet to develop comprehensive workforce management programs. As a result, they have divided the responsibility. HR handles traditional, hourly and salaried employees while Procurement engages non-traditional workers. This can make sense in very small firms because regulations requiring precise classification of workers can be cumbersome, and misclassification is costly. Both Procurement and HR bring unique competencies to the management of an organization’s workers. But in larger operations, dividing responsibilities also halves many of the strategic benefits the contingent workforce promises: agility, planning, analytics, etc. Procurement seeks to control costs while HR works to maximize talent. Managers in each department are judged on how well they accomplish these goals. Unfortunately, when goals are not aligned, this is a zero-sum game: cutting costs reduces worker quality; hiring more talented workers drives up costs.
Benefits of Alignment
Managing these conflicting goals also leads the departments to focus on diverging metrics, depriving the company of accurate, centralized data it can use to obtain a unified view of workforce performance, expenses, and efficiency.
When both departments vie for control of the workforce management program, neither is really in control. Often, fragmented, maverick spending on labor is the result, as hiring managers and lower-level supervisors bring on contingent labor on an ad-hoc basis. They will circumvent controls, hiring off-contract, with no oversight and with no chance to track the hire’s cost or contribution.
Aligning HR’s and procurement’s missions with the entire company’s purpose allows the departments to share information and insights, collect data that can inform future decisions and projects, and collaborate on a total workforce solution.
A shared vision puts the full range of options for addressing specific labor needs at the firm’s disposal. The company can evaluate the outlay, risks, benefits, and quality individual workers, labor providers, and engagement platforms bring to each initiative in order to pick the one with the highest return on investment.
When the departments work together, they establish controls over the entire organization’s labor practices. They present a unified front against rogue spending on talent, making the process more holistic and establishing operating procedures that increase transparency and data-driven decision making.
Finally, consistent analysis and implementation of hiring practices sets the stage for automating some routine evaluation, engagement, payment, and compliance tasks, saving money and ensuring unbiased decisions that benefit the entire enterprise, rather than individual departments.
Making it Work
The benefits of breaking the silos separating HR and procurement are undeniable. Companies seeking to reap the rewards of interdepartmental collaboration should follow these guidelines:
- Define your goals – The objective of every workforce management program should be to provide the best talent at the lowest overall cost. How you achieve these objectives will depend on your starting point, your corporate culture, and the assets you can bring to bear. You may decide you can achieve your mandate by keeping the function in-house, or you may decide those resources are better applied elsewhere and that working with a managed service provider for workforce management is the way to go.
- Please the customer – Your workforce program should aim to deliver the best possible service to your customer – your company’s front-line supervisors. Get buy-in from the people who request and oversee contingent workers. They will be more likely to provide accurate specifications for each open position, take an active role in hiring decisions, objectively evaluate performance, and work to continually improve the process.
- Focus on strengths – Aligning procurement and HR does not mean combining the two departments or forcing them to surrender autonomy. It means ensuring they both zero in on the company’s big picture. While they may need to change some processes, they still can contribute by doing what they do best. For HR, that means training and onboarding, codifying institutional knowledge, and securing diverse, complementary skillsets. Procurement’s contributions come from effectively managing contracts, projects, and suppliers. This ability is particularly valuable when engaging statement of work contractors hired to develop or implement new initiatives.
The result will be a talent sourcing program unlimited by geography, technology, regulation, or time. We have addressed in detail many of the other advantages an enterprise-wide workforce management program delivers, including controlling maverick spend, ensuring diversity, and generating strategic data for use in planning, forecasting, and evaluating performance.
Collecting all the benefits an aligned workforce model promises requires a significant investment of time, money, and management effort and oversight. Companies may find they can use those resources more wisely in other areas, trusting an experienced, knowledgeable service provider to manage the workforce function. Capable managed service providers can unravel complicated vendor contracts, complex supply chains, and diverse compliance requirements to deliver significant cost savings, quality workers, and deep management insights.
Metasys combines the industry’s best technology, industry insiders, and customer service commitment to provide clients with a one-stop solution for all their talent-acquisition requirements. Our services include strong relationships with diverse labor vendors and a proven platform for streamlining and economizing talent identification, onboarding, and utilization. We take the time to understand your unique needs and customize a workforce development scheme that’s scalable, productive, and proprietary.
Contact Metasys when you’re ready to supercharge your non-employee talent to maximize production, flexibility, and cost efficiency.