Contract worker management evolving by Craig Donaldson
SKILLS SHORTAGES on a global and local scale are driving leading organisations to alter the way they manage their contingent workforce, according to an international recruitment process outsourcing firm.
Trends in developed countries, including the ageing workforce, declining birth rates, and an increase in worker migration will require organisations to think more strategically about attracting and retaining the best talent.
“The global skills shortage is creating a more competitive employment market and contingent jobs have evolved as an attractive option for workers, providing flexibility, independence, variety and financial rewards,” said Tracey Cooper, a director of recruitment process outsourcing firm, Alexander Mann Solutions,
Contingent workers include non-permanent employees such as temporary staff, contractors and consultants.
As the contingent workforce becomes more critical to business success, Cooper said, organisations need to identify and take advantage of the opportunities for improvement that arise – specifically improving the three Cs: cost, control and compliance.
Better management of the contingent labour force can lead to significant savings and the ability for organisations to retain high performing workers in the years to come, according to Cooper.
“When the recruitment and onboarding processes are well-managed, contingent workers are more productive from the moment they arrive on the job,” she said.
“Good processes mean that the recruitment experience for the contractor is a strong and positive experience, and it also ensures that the organisation can improve the productivity of its contingent workforce from day one.
“Due to the dynamic nature of the employment market, organisations are increasingly seeking to benefit from a flexible workforce and maximise those benefits by proactively managing their contingent workers. They want to be able to plan ahead and ensure the right balance is achieved between permanent and contingent workers.
“A flexible workforce can be highly advantageous for organisations looking to effectively respond to market changes, scale their business through acquisitions and divestments, and seize new business opportunities,” Cooper said.
However, in large organisations with multiple business units, she said the contingent workforce is often not consistently managed. This can lead to inconsistent hiring processes, poor economies of scale, little or no management information, and a lack of compliance with an organisation’s policies.
“Compliance is important to minimise risk,” Cooper said. “Many organisations have tight controls regarding minimum requirements for background and reference checks or insurance coverage for permanent staff, but don’t apply the same diligence for contingent workers.
“Also, few companies would be able to show you where, for how long and to what value their contingent workforce contributes to their total staffing expenses and business. The cost and associated risks of using contingent workers is often hidden or misunderstood.
“Many organisations focus solely on margins added to the contingent worker’s salary rather than trying to lower the entire cost of hiring contractors. Recruitment agency margins are traditionally only 5 to 25 per cent of the total cost, leaving much of the cost uncontrolled,” she said.
Key points
• Organisations in developed countries need to think more strategically about their best talent
• Companies need to make the most of opportunities for improvement in cost, control and compliance
• Large organisations can have difficulties managing their contingent workforce consistently
