The benefits, challenges, and best practices of a blended staffing model.
By Jennifer Berry
IBM’s recent announcement of trimming between 6,000 and 8,000 jobs globally was described by a June article on Bloomberg.com as part of an ongoing “workforce remix.” The latest step in that “remix” process will apparently cost the global computing giant around $1 billion. Keep in mind this is on top of more than $1.2 billion the company has already spent on workforce restructuring over the past two years.
The eye-popping price tag is due largely to the size of IBM. But the logistical wrangling and expense involved in making structural staffing changes to full-time employees also stands in stark contrast to a small passage later in the piece. It explained that “IBM also has been cutting hours of its contract employees” and that “…the company relies on contractors to manage labor costs on information-technology projects for clients.”
The relative ease with which IBM was able to throttle back on contract staffing—and the lack of any significant expense associated with doing so—supports in large part why blended staffing has become an increasingly popular option for businesses in recent years. Blended staffing relies on both full-time salaried employees and a roster of proven outside consultants to make up an entire organization’s workforce.
One reason why the blended staffing model has been getting more attention recently is simple: professional demographics. An evolving workforce has been undergoing a structural and cultural shift, with contract and part-time workers becoming more prominent in the professional landscape. Businesses operating in tech-heavy industries and other specialized fields have been particularly active in embracing this model.
The Harvard Business Review reported last year that, according to workforce solutions provider Pontoon (then Adecco), “the rate of growth in contingent workers will be three to four times the growth rate among traditional workforces,” and that up to 25 percent of the global workforce will soon be comprised of contract workers. The Bureau of Labor Statistics (BLS) reinforces the momentum of that trend, concluding the average worker today stays at each job for less than four and a half years.
The expected tenure for younger workers is shorter still. Multiple Generations @ Work by Future Workplace, a recent study of nearly 1,200 employees and 150 managers, found that 91 percent of millennials expect to stay in their current job for less than three years. The BLS also reported that, as of January 2012, more than one in five wage and salary workers have had one year or less of tenure with their current employer. The employment landscape is changing, and today’s workforce is moving toward a more independent and flexible professional structure
The internal flexibility and favorable cost-benefit associated with blended staffing is an attractive value add. Combine that with the ability to leverage the expertise of highly specialized professionals that deliver improved service to clients, and it is no surprise that this trend is on the rise. While blended staffing comes with some significant benefits, it also has its own set of challenges.Leveraging a blended program to deliver optimum efficiency for your firm and your clients requires a nuanced and sophisticated understanding of those strengths and weaknesses.
Challenges and Opportunities
For companies in general, and HR managers in particular, the appeal of blended staffing stems from its ability to support the core mission of any company: to provide better service for customers.
With blended staffing, companies are able to draw from a much larger talent pool. Instead of providing their customers with the best in-house employee, they are able to provide the best period. But these experts are not necessarily employed full-time with the same company any more. Increased specificity with matching talent, availability, and suitability makes it that much easier to backfill a resource than if you are limited exclusively to full-time employees. This flexibility also allows mature and more experienced workers enhanced opportunities to stay employed longer and to leverage their knowledge and expertise in new spaces and new ways.
While existing stigmas of independent contracting have largely been dispelled, blended staffing does add complexity to the staffing equation, and presents a challenge for HR professionals unfamiliar with its operation. The vetting process for independent employees must be rigorous, and maintaining control, consistency, and communication is essential. HR needs to ensure that all independent operators are well versed in the firm’s methodologies and core values, as well as its professional culture, standards, and expectations.
Adhering to established best practices for blended staffing is critical. Some guidelines to follow:
Extensive vetting. Because your firm’s reputation is perhaps your most important professional asset, vetting independent employees is essential. Use a combination of recommendations, past experience, and a multi-stage interview process to identify strong candidates. Ensure that HR and technical personnel are involved in the process. Reviewing resumes and verifying skillsets is important, but it is also crucial to understand how to match the right personality with specific customers. Customer relationship management software tools (CRMs) are a popular choice for many companies that utilize a blended model, and maintaining a database of trusted experts who have proven themselves in the past is also a good idea.
Consistency and oversight. Detailed orientation and rigorous training programs are the best way to establish and maintain consistency with independent employees. Some firms have developed seminars that all their independent workers attend, and others ensure that all part-time workers have an on-site engagement manager or supervisor to provide additional oversight. There is a compelling argument to be made that companies who follow these basic steps actually have more control over contract workers—who are often highly motivated to meet the needs of their customer, the employer—than full-time employees.
Relationship building. Treat employees the same when onsite or on the job: as a part of your team. Make it a point to include all contract employees in team dinners and other informal events. Building, strengthening, and maintaining unity is particularly important for companies utilizing a blended staffing model, and internal communication is important for making that happen. Keep all employees updated and informed, even when they are not currently on a job. Being mindful of quality of life issues, such as scheduling flexibility and timely payment, is another important way to strengthen relationships.
Ultimately, customers do not care about an employee’s tax status. They are focused on performance, skillset, and professional approach and demeanor. And with more and more contract workers and independent employees demonstrating that they can consistently deliver on those key priorities, the appeal of the blended staffing model seems unlikely to diminish.
Jennifer Berry is director of human resources for MIPRO, a consultancy specializing in implementations, upgrades, and optimizations of Oracle’s PeopleSoft and Fusion applications.