Contractors are a part of the federal workforce, but it is unclear whether their deployment is more often strategic or simply convenient, writes Allan Schweyer
The US Bureau of Labor Statistics (BLS)
estimates that about 30 per cent of the
American workforce is made up of contingent
labour (freelance, temporary or self-employed)
– a number it expects will grow to about 40 per
cent by 2019. In the Federal Government, the
contingent and contract workforce is already
many times larger than the civil service, which
numbers between 1.8 and 1.9 million. The
Congressional Research Service reported in
September 2008 that the “federal workforce of
contractors and grantees grew by more than 50
per cent between 1999 and 2005, when it
reportedly included more than 10.5 million jobs
…. That figure is more than twice as large as
the combined total of all three branches of
government: the US Postal Service, the
intelligence agencies, the armed forces, and
the Ready Reserve.”
Contractors are obviously a vital part of
the federal workforce but it is unclear whether
their deployment is more often strategic or
simply convenient. Hiring processes in the
Federal Government are complex and often
inefficient. Recruiting can easily take a year
from requisition to hire. Contractors, on the
other hand, can be engaged and on the job
within a few weeks, depending on the
contracting vehicle.
With ever-changing and more demanding
business dynamics, looming demographic
challenges and a desire to save money,
organisations in the private and public sectors
are looking for ways to benefit from the skills,
flexibility and variable cost structures offered
by the contract workforce. However, true
success is likely to come only with close
management of the process and a strategic
approach to determining the optimal
composition of the workforce.
In government, as in other organisations,
care must be taken not to outsource core
decision-making, nor roles or processes that
are considered inherently governmental and
central to the organisation’s competitive
advantage. Where organisations outsource
those roles and processes, they run the risk of
developing an over-reliance on external talent,
losing institutional knowledge, and, in some
cases, inappropriately delegating
responsibilities, access to intellectual property
and/or protected information.
Total talent management – starting with
workforce planning that considers the whole
workforce – is critical in determining the right
mix of federal public servants and contractors.
The process is also necessary to ensure that the
right choice (employee or contractor) is made
for each position or project.
As the Executive Office of the President
noted in a July, 2009 memo to heads of all
Federal Government departments and agencies:
“Agency management practices must recognise
the proper role of each sector’s labor force and
draw on their respective skills to help the
government operate at its best. … Too often
agencies neglect the investments in human
capital planning, recruitment, hiring, and training
that are necessary for building strong internal
capacity. In many cases, agencies lack the
information that would allow managers to
understand how contractor employees are
deployed throughout their organisation and
integrated with federal employees. The full
potential of our total workforce – both contracted
and federal – often goes unrealised due to
insufficient or ineffective management attention.”
The mission, priorities, goals and objectives
of the government as a whole must drive
agency and departmental strategic plans.
Those plans must inform the documented
human capital strategic plans in each
department and agency. An analysis of the
skills, experience and competencies required to
execute the human capital plan will reveal gaps.
A department or agency can fill those gaps
either by acquiring talent (civil servants or
contractors) or by developing and redeploying
current human capital. Where the decision is
made to acquire the skills needed, the planning
process should guide the decision as to
whether a regular employee is recruited or a
contractor engaged. This decision rests on a
number of factors depending on the nature of
the work (Is it strategic? Is it a core
competency? Is it a temporary need? How
difficult is it to find the talent? What are the
comparative costs in hiring an employee versus
engaging a contractor?)
Total workforce planning allows proactive
talent acquisition in which contractors are
deliberately identified ahead of time for
appropriate roles and projects. Whether this
leads to more or less use of contractors should
be less relevant than the resulting make-up of
the whole workforce, which will be better
optimised to execute the government’s mission.
