Your parents or grandparents probably entered the workforce expecting a job for life, but the 21st century worker has a different perspective. An uncertain economy, changing workforce demographics and individuals seeking flexible work arrangements have given rise to a growing contingent workforce.
Nearly one-third of the U.S. workforce is comprised of contingent labor including contractors, temporary workers and the self-employed, among others. That has expanded tremendously in recent years as more organizations recognize the contingent labor pool as a strategic source of talent to support business initiatives. This change means organizations must adjust their talent acquisition processes and stay current with service models and technology for permanent recruiting and the management of flexible labor.
Currently, many organizations take a silo approach to managing permanent workers, contingent labor and employee mobility. In many organizations, the permanent workforce is typically owned by HR and talent acquisition processes are supported with an Applicant Tracking System. Over time, these systems have evolved to accommodate online career sites and integration with social networks such as LinkedIn.
Contingent workforce management, in contrast, is typically owned by procurement, which relies on vendor management systems (VMS) to manage the sourcing process as well as intricacies related to SOX, co-employment, contractor misclassification and other compliance concerns.
Employee mobility and management is also owned by HR, but is often outsourced to human resource outsourcing (HRO) providers, and success is measured based on retention, quality and performance.
The Case for Unified Labor Pools
Without an integrated approach, organizations face a reactive environment for talent acquisition decisions, preventing hiring managers from understanding the best source of labor. Visibility into the organization’s full complement of talent is also limited – for example, hiring managers cannot determine internal talent availability or know which contingent workers may be ready to be brought on staff. Without visibility into the total workforce, HR organizations find they need to go back to the applicant pool to source talent rather than drawing from the demonstrated skills and resources of contractors. With an integrated process, they get visibility of all talent available and by integrating applicant pools, can ensure access to the right talent at the right price and at the right time.
As these labor pools come together, organizations need to respond in terms of processes and technology. However, moving to a single talent-supply chain brings challenges if not done correctly.
How can an organization ensure successful management of a hybrid workforce?
- Implement a holistic talent management process and have an integrated system to support talent acquisition. This helps organizations understand if they have required talent or need an external source. It can also help with decisions on the right type of workers – permanent or contingent – for a particular role and how they align with career progressions within the company.
- Have a single system for developing talent pools and managing the talent-supply-chain: vendors, alumni employees, social networks, and other candidates. A contract labor pool can be the best source of employees for the future.
- Understand the distinction between employees and contractors and how to use them appropriately in your organization. With a hybrid model, organizations need a strong ability for compliance and transparency for resource classification.
With an integrated approach, organizations can achieve enterprise-wide transparency and better understand the cost of talent across different regions and geographies. A common platform for managing contingent and permanent labor provides accurate data, enabling more informed business decisions, increased efficiencies and effectiveness of talent acquisition processes.