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.
Today’s workforce model includes a significant percentage of statement of work (SOW) talent, contingent workers, consultants, and other non-employee workers. If your organization is not making use of these valuable and diverse labor resources, the time to act is now. Even if you are using external talent, the workforce paradigm already has begun to shift. Developing a total workforce solution is the only way to ensure you can obtain the tools you will need to capture market share, maximize production efficiencies, and live up to customer expectations. A scalable, future-proof plan includes an assessment of current and evolving needs for skilled workers, recruitment and compensation processes, the most effective ways to staff various project types, and more.
How is a company to deal with all these issues? Over the next several weeks, Metasys will unpack the issues companies face when creating, expanding, and getting the help they need to compete for and manage the critical talent to thrive in the new workforce economy. Here are some of the considerations we will address:
Expanding Your Workforce Management Program – Chances are, your company already uses freelance writers and designers, technology implementation project leaders, or some other form of non-traditional workers. But to take full advantage of the cost savings, skills procurement, and organizational agility outside talent allows, you need to establish a systematic process for tracking the decision-making and oversight of non-employee workers and the program itself. A comprehensive program will assign responsibilities for regulatory and work rule compliance, payment, goal-setting, training, and other tasks all along the workforce pipeline.
Expanding the non-traditional worker program and making it part of an enterprise-wide workforce component requires cooperation and collaboration among all stakeholders, especially Human Resources and Procurement. Both need to be involved in finding and acquiring the right type of worker – full-time, temporary, freelance, consulting, etc. – for every customer-facing, business development, or productivity-enhancing project the company will undertake. For many companies, the first step in this pursuit is deciding whether to prioritize the use of contingent workers or statement-of-work (SOW) consultants. This decision is an important foundational measure that could dictate the direction your program takes for the foreseeable future.
Independent contingent workers – freelancers and other outside talent that work directly with your company – probably offers the least complicated option in terms of payment, results, and other recordkeeping. Companies engage these temporary workers based on hours worked, start and end times, schedules, and defined duties. They can be self-sourced through online marketplaces or through pure staffing agencies.
Workers sourced through SOW are hired to complete specific tasks or achieve defined milestones. How they accomplish these missions is not defined. They may be paid out of a project budget based on completion of the task, rather than hours worked. SOW contractors supply not only qualified labor, but also a methodology for project management and delivery. SOW contracts may transcend departments, serving and drawing resources from Finance, Marketing, IT, and others in addition to HR and Procurement.
Internally Managing Your Workforce vs. Outsourcing
SOW’s cross-departmental nature makes assigning cost centers more complicated and may point to a need to engage a managed service provider (MSP) to coordinate and run your workforce program. Complexity, program maturity, and available in-house resources are other factors to consider when designing your workforce plan.
Internal, direct sourcing of talent works only if the company can confidently develop and consistently implement work rules and standard procedures:
- Compensation that conforms to goals and is competitive enough to attract the talent required
- Alignment of departmental metrics with organizational goals
- Talent spend brought under strict management
- Sourcing that is strategic rather than transactional
- Data collection and analysis that informs decisions and fosters continuous improvement
- Safeguards that ensure contractual, regulatory, and work-rule compliance
Smaller and less equipped enterprises may opt to contract with MSPs to ensure these requirements are in place. By outsourcing, companies avoid costly infrastructure upgrades and gain access to expertise. Using an MSP instantly expands a company’s talent sourcing reach through their partner’s relationships with talent providers. Outsourcing also gives companies immediate efficiencies of management time and recruitment budgeting – resources that can be redeployed into value-adding activities.
If you decide working with an MSP is right for you, choose a partner that understands your industry and is willing to listen to your challenges before devising a customized solution to your workforce management needs. Your vendor should deliver multiple savings, fulfillment, and oversight advantages, including increased spend under management, reduction in rogue spend, contracted discounts with labor suppliers, and proper worker classification.
Joining the Game as a Small Company
As mentioned, smaller firms often are constrained by tight budgets, limited management resources, and sparse technical infrastructure. Engaging an MSP can buy a firm time to build a foundation and obtain workforce management expertise. In the meantime, the MSP partner might handle workflow associated with identifying and contracting with labor vendors, create processes, and offer advice such as which contingent workforce data to collect to help with planning and demand forecasting. Of course, as the client adds more functionality to its workforce program, it also adds complexity. The existing relationship with an MSP can ensure scalability and will retain company familiarity. This will serve both partners well as they can divide tasks logically according to each one’s expertise. As the client firm matures in its skills-acquisition proficiency and its needs grow, the synergy may develop into a fully functional talent partnership. Here’s how that relationship might evolve (or how in-house capabilities might develop, if the company is willing to devote the necessary inputs):
- Work rules are established, departmental responsibilities codified and oversight established. The application of outside talent, however, remains transactional.
- Projects are assigned to teams (including employees, freelancers, and, increasingly, SOW contractors) that possess the right mix of skills to deliver them on time, under budget, and with the desired results.
- A greater percentage of projects are led and implemented by outside talent as the company matures to a comprehensive, strategic approach to filling skills gaps. As market share grows, the firm may integrate horizontally – necessitating model scalability. And it may integrate vertically, taking greater control of its labor supply needs and requiring additional in-house or MSP resources to bring the added spend under management.
Workforce Model Improvements
Despite its vast value-generating promise and theoretical soundness, contingent workforce modeling often fails to reach its potential. Models do not embrace innovation and creative solutions. They lag behind labor market dynamics, and they ignore the factors that motivate talent. As Baby Boomers retire, the next generation of workers is searching for different reward and career structures. Millennials and Generation Z are interested in work/life balance. They identify themselves according to their skills and career paths rather than their employers and industries.
Part of the cause lies in not involving all stakeholders in the management and use of outside workers. Departments are unclear on their roles within the workflow. Jurisdictional disputes arise. Tasks are either duplicated or fall through the cracks, creating wasted effort and lack of regulatory and fiscal oversight. MSPs can help companies address many of these deficiencies. For instance, they can assist their clients in harnessing the power of data to create manpower forecasts. MSP’s labor industry contacts and vendor-neutral approach can expand companies’ reach. Coupled with mobile computing and communications capabilities, these connections remove geographic limitations to talent acquisition. Experienced MSPs also can coach companies on developing and leveraging their brand to not only attract people with the skills they need, but also to achieve better self-awareness for determining where those skills fit into the overall talent matrix. Finally, MSPs are addressing all the variables facing clients by modularizing their offerings. By engineering several core components of workforce management, they can customize each to fit companies’ positions along the maturity curve. Modularization delineates areas of responsibility among internal departments and external service providers and allows companies to adjust their relationships with MSPs as their needs change, their scale increases, and their in-house capabilities improve.
Metasys will take deep dives into these issues and more over the coming weeks. Subscribe to our blog to get updates on new blog posts as we unpack ways companies can make their external workforce management program more streamlined and strategic.