Your one stop shop for transformative insights and groundbreaking trends in the talent industry today
Talent for project management, technical development, and creative problem-solving is more difficult to find than ever before. Fewer and fewer skilled professionals are opting for long-term, full-time employment, so traditional hiring practices cannot fill organizations’ personnel needs. But filling the talent gap with contingent workers brings its own risks and shortcomings. Only by adopting a total talent management program can companies put themselves in optimal position to locate, hire, manage, evaluate, and lock in the people who possess key abilities and knowledge.
If your New Year’s resolutions include a promise to institute or more effectively manage your contingent workforce, congratulations! You are on your way to a total talent program that can reduce risk, cut labor costs, and position your organization to respond adroitly to market shifts and industry challenges.
With unemployment hovering at historic lows, technical and project leadership skills scarce, and critical business activities becoming increasingly task- and outcome-based, competition for talent is at an all-time high. Organizations need a growing number of specialized skills for short-term projects at specific times. Ensuring workers with those unique skills are available when your company needs them may be the most important labor-related task your firm faces. The risk that you will not be able to source the talents you need from either your internal workforce or the contingent labor market is too great to be left to chance.
Most businesses today recognize the fundamental importance of Learning and Development in both maximizing the potential of staff and maintaining a competitive edge in the marketplace. With work tasks becoming more specialized and requiring advanced technical acumen, skills development and expansion take on an ever more critical role. Companies in every industry are striving to upgrade their worker learning programs and make knowledge transfer more interactive, more ubiquitous, and less expensive. By making learning and skills development more relevant, interactive, and user-friendly for workers of all classifications, companies invest in future profitability, develop tomorrow’s leaders, and position themselves as worker-friendly organizations. Training can pay immediate benefits, as well, by retaining institutional knowledge, improving morale, and improving productivity.
The rates you pay your talent agencies may represent the largest percentage cost of your firm’s contingent labor program. Therefore, standardizing fees and bringing these costs under management has the potential to create impressive savings. As with all the inputs required to run your business, benchmarking costs to ensure consistency throughout the organization and conformity to industry cost norms is a critical component of external workforce management. Of course, contingent workers are not interchangeable parts, but rather heterogeneous resources with unique strengths, skill sets, and experience levels. They are not commodities, which makes determining their value more difficult, but no less critical. Many variables contribute to the cost of non-traditional workers and the fees agencies charge to find, manage, and deliver the talent you need.
Companies on board with the non-traditional worker revolution understand the importance of effective supplier management. Indeed, the expanded use of statement of work (SOW) and independent contractors, freelancers, and consultants has been driven largely by the desire to control how much companies pay talent providers. Unfortunately, poorly controlled supplier relationships can cost organizations as much as half the cost savings they ordinarily would achieve through a comprehensive contingent labor program. The challenge is to bring talent vendor spend under greater control while maintaining security, fulfillment, and compliance and avoiding missing out on technology that can make the workforce more productive and labor demand more predictable.
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.