The benefits and challenges of a total workforce solution.
￼By Debbie Bolla
As organizations strive to succeed in today’s competitive workforce, talent officers, HR executives, and procurement managers all understand the need to be agile in order to achieve business goals. This means embracing all types of workers—full-time employees, contingent labor, independent contractors, and statement-of-work (SOW) consultants—and integrating them into talent programs. Non-permanent workers have the ability to fill key skills gaps while reducing costs and providing flexibility—and organizations are taking notice. Randstad Sourceright’s 2015 Talent Trends Report shows that 46 percent of respondents say they consider all types of workers when workforce planning and 69 percent say in order to maintain a competitive workforce over the next five to 10 years, HR leaders will need a larger portion of contingent workers than they have today.
“As the use of contingent labor becomes more strategic, and the value of contingent talent more critical, organizations are beginning to look at their workforces more holistically,” says Joan Davison, president of workforce solutions provider Staff Management | SMX. “An organization should be focused on securing and retaining top talent, and aligning talent with organizational objectives across the entire workforce, regardless of worker classification.”
There has been an evolution in the way organizations leverage and manage contingent labor. Beth Roekle, senior vice president of Advantage xPO North America and Global Operations, says that in the past, contingent labor was seen as a commodity and a quick fill to a non- strategic role. Non-permanent workers were typically managed solely by the procurement function. But as the use of contingent labor increased during the recession and value was realized, organizations have started to adjust their management approaches.
“Organizations are looking for contingent staffing companies and managed service providers to deliver higher quality candidates and longer employee retention,” Roekle explains.
In order to achieve this, it is becoming more common for HR and talent acquisition to partner with procurement managers to achieve a more holistic view of talent by combining recruitment process outsourcing (RPO) and managed services programs (MSP) into a total workforce solution.
“Total workforce solutions have the capability to provide additional efficiencies and visibility across multiple regions throughout entire business,” says Mike Drolet, EVP and global head of RPO delivery at workforce solutions provider Pontoon Solutions. “This provides organizations with a better talent pool and the ability to make smarter decisions.”
Roekle says other factors driving interest in managing all types of talent under one umbrella include:
- Increased focus on compliance
- Desire for more comprehensive reporting
- Transferrable datasets
- Hiring manager satisfaction
But a total workforce solution is not without its challenges. “The reality is that adopting a truly blended approach is a complex proposition,” says Davison. While contingent workers offer a variety of benefits, they also come with management obstacles: compliance risk and misclassification issues, among others. Add supply chain management and full-time employee placement to the mix, and a total talent acquisition solution is quite an undertaking for a global organization.
Change management can be difficult and often requires executive buy-in. “Combining the management of contingent labor and at-will employees requires working with the organization to rethink their current strategies,” says Roekle. “The organizations with the most success do not simply try to tie an RPO and an MSP program together under one provider. They think strategically about how to re-engineer their processes to optimize the solution.”
Technology and the lack of a single platform is another hurdle, says Pontoon’s Drolet. HR teams are tasked with managing their workforce via applicant tracking systems, human resources information systems, vendor management systems, assessment tools, automated interviewing platforms—and the list goes one. While the advances in HR technology bring efficiency and a higher level of talent, they can be challenging to manage internally. “The sheer effort in the resources needed to keep up with technology shows the value of working with a provider,” says Drolet. “A single dashboard with a single view into the overall workforce will help drive the market forward.”
And the benefits achieved from total workforcesolutions are pushing organizations to rethink their approach. Everest Group reports an integrated talent solution has the potential to achieve an additional 20 to 30 percent savings. Advantage xPO’s Roekle says that organizations can also experience:
- Cost efficiencies
- Increased candidate quality, particularly for contingent workers
- More comprehensive reporting abilities
- Better hiring manager experience
- Increased compliance with government regulations.
“(By) having all talent managed under the same umbrella, there is a comprehensive view of the organization’s talent strategy and the provider is better able to raise concerns or spot inconsistencies,” says Roekle.
Davison points out that sophisticated buyers with more mature contingent labor programs have the metrics to understand the layers of talent they need for their workforce planning. Leveraging data to determine whether to classify a position as contingent or full time offers organizations a competitive advantage. Metrics can show the cost for the position, the time to fill, and manager satisfaction. They also provide the opportunity to zero in on positions that have historically been filled as a long-term contract position that would be better served by a full-time employee. These organizations would benefit from an integrated solution.
Davison offers an example of role classification: “If a software developer starts on a six-month project and is still active after 10 months, we proactively approach our clients to explore whether that role is core and should be converted to full-time.”
This can also be beneficial during the hiring process: a “second-place” candidate can take on a contingent role and six months down the line when the project is up, they are armed with experience. Drolet says this candidate can easily become the main choice for a permanent position, quickly filling an organization’s gap. “This is a main advantage of total workforce solutions: providing visibility across the entire labor spectrum.”
The visibility factor will certain encourage HR executives to keep their eyes open to the possibilities of a total workforce solution.