Three providers shed light on overcoming resistance to a blended workforce approach.
By Katie Kuehner-Hebert
Globalization, sputtering economies, and other changes in workplace dynamics have driven the need for corporate leaders to balance permanent workers with contingent labor through blended workforce solutions. This approach to talent management combines the strategies of recruitment process outsourcing (RPO) and managed service providers (MSP).
Randstad Sourceright, Advantage xPO, and Capita explained how organizations are developing blended workforce solutions to maintain a competitive edge, and how they can mitigate current challenges to make the solutions work for their particular culture in a recent webinar hosted by the Human Resources Outsourcing Association (HROA).
Blended workforce models are not static because organizational needs can change rapidly due to evolving business goals, locations, required skills sets of teams, and other workforce factors, noted Paula Parfitt, sales and marketing director of Randstad Sourceright.
“Models are fluid and they have to be. Part of the solution is definitely to make sure there is source visibility across all of the talent space,” Parfitt said. “One of the key benefits is that we’reable to identify maverick spend and any exposure to risk, and that really helps us effectively manage that on the client’s behalf. Visibility also helps to identify trends which feeds back into continuous improvement.”
Traditionally, RPO is led by an organization’s human resources team and MSP is procurement-led, but the blended model is—no surprise—a blend of both. HR takes the lead with really strong procurement support, Parfitt said.
Developing an effective blended workforce solution entails a sound analysis of the availability of required skills sets in each type of worker category and how that fits together holistically, said Karen Browne, president of Advantage xPO. Organizations will have to account for every worker and every position. Such an analysis requires the provider’s role to transition to becoming more of a workforce consultant.
“What organizations are really looking for us to deliver…comes down to talent availability, keeping the company compliant and managing risk, and driving cost savings,” Browne said.
Not all organizations are thinking strategically about how a blended workforce solution can impact their talent management. This type of solution can drive powerful benefits and positive outcomes, said Kate Harper, director of talent strategy for Capita.
“Strategic workforce planning is not necessarily high enough on the agenda,” Harper said. But clients are more receptive of the blended concept when tackling a specific problem like poor retention rates of temporary workers, she said.
“We used the problem and the challenge as a means to sit down with the client and say, ‘Hold on,’” Harper said. “If they started to think innovatively about the solution beyond the boundaries of this just being a temporary resourcing solution, can we find an alternative and a better way of doing it. And the answer in this case was ‘Yes, we can.’”
Too many organizations also still experience turf fights over ownership between HR and procurement, she said. Both have their own agenda: For procurement, costs typically drive the solution, and for HR, the driver is typically quality of talent, she said. Capita works with other outsourcers in a way that is in “the highest interest of the client,” with a “blended approach [that] can really benefit the outcome.”
“So even if the client was not ready, we affected some positive change, and offered more insight of the total workforce solution,” Harper said.
Some of Randstad Sourceright’s clients have voiced objections to “having all your eggs in one basket,” but a senior-level executive acting as an ambassador “can drive change,” particularly if they involve business unit leaders early in the process to help shape the model and approach.
Technology is also a challenge. Currently the market lacks a software system that effectively manages both permanent and temporary forecasting and hiring needs. Often, organizations need to “manually blend” management information reports using data about workforce utilisation, turnover rates, and other metrics from software used by all their business partners.
“We have to build this idea of a blended solution, even if we’re not operating both contracts on common technology, we make sure we develop all of our staff to ‘think blended,’” Harper said.
Still, outsourcers working on a blended workforce solution are waiting for the technology industry “to see the future of this and really step up to the next level,” Parfitt said.
Blended workforce solutions are gaining in popularity in Europe, particularly the U.K. and Germany, Parfitt, Browne, and Harper reported.
“We’re so used to following where the U.S. leads us, but in the U.K., we’ve had more opportunity to pursue this than our U.S. colleagues, some of that due to the sheer size of their models and the way that RPO has developed over there,” Parfitt said.
Is it industry driven? Randstad Sourceright hasn’t seen specific industries pursuing this “en masse”—rather it’s been much more about the culture of particular organizations, she said.
“It also doesn’t necessarily involve first generation RPO or MSP, it more depends on the appetite within the business for combing these and getting control overall,” Parfitt said.
Browne expects to see industries such as engineering and information technology start to embrace blended workforce solutions because of the scarcity of skills required for their positions. She has also seen progress in this model within the financial services, utilities, and telecommunications sectors.
Regarding the public sector in the U.K., there are “cultural issues” to take into account when considering a blended workforce solution, Harper said.
“There has been quite a lot of public condemnation of the high use of contract workers in the public sector and some sensitivity around the cost implications and when laying off larger numbers of permanent public sector workers, whether they should be replaced by contract workers,” she said. “Perception does have a big impact on the sector’s appetite for saying, ‘We want to look at blended workforce solutions, but it’s too early to say anything beyond that.’”
More and more organizations are warming to such a blended workforce solution, and viewing outsourced providers more as workforce consultants on talent, Harper noted.
“We’re moving beyond the sense of being an RPO provider or a MSP provider (to the) idea of consulting and information gathering,” she said. “To do this properly is to be a true consultant related to talent.”
Having brand consistency across all hiring areas is becoming increasingly important, and a blended workforce solution can help develop that consistency, Parfitt said.
“With social media, there is no such thing as a private internal world,” she said. “Everything is open out there, so organizations need consistency in all candidate communications.”
Blended workforce solutions also are not just topical answers to the current economic problems—they are actually critical for the long term, Browne said.
“We should not let the softness of the current economies to mask a skills shortage, and we should encourage companies that they need to be flexible to bring good employee propositions for the next generation of workers,” she said.