Should Contingent Worker Acquisition be Managed by TA?

The trend towards increased preference for flexible work is now widely accepted. You’ve heard the statistics; 40% of the workforce will be flexible by 2020. It’s driven on both the supply and demand sides, suggesting the phenomenon is here to stay. While companies recognize the benefits of having just-in-time, custom-fit talent for certain portions of their work quotient, workers are increasingly seeking diverse nonlinear project experiences and flexibility in when and where they deliver their output — not to mention the millennials who’ve entered the workforce with an expectation of such flexibility. And we all know about the size of that demographic hitting the labor force. So, as the trend gains momentum, it’s bringing to light an increasing chasm between HR best practices and organized freelance chaos.

Contract work is not new. It’s been creeping up in acceptance for almost 30 years. Just look at the growth of the contract staffing business. Over the course of this evolution, corporations grew the ability to reign in the freewheeling aspect of contractors showing up all over the enterprise, often below the radar. As awareness of the inherent risks to companies came into sharper focus, solutions and services grew up to control the rouge spending on contractors. This took the form of managed services providers armed with vendor management systems. And all was good and order was imposed. But it was the visibility on how much was being spent on contract labor that diverted the acquisition of this talent into the corporations’ procurement function.

Diverging Drivers:

Modern day human resources grew up through this period, perfecting its processes. One was the elevation of the talent acquisition function as companies realized that having the right people in the right jobs was an essential element in running a competitive enterprise. As the explosion in the use of contract workers — and now the prevalence of workers seeking flexible work — rolled out, it came to be almost entirely outside the purview of HR. So, as HR honed its abilities to recruit, develop, engage and retain workers, these efforts are entirely focused on the full-time employee base.

The accelerating growth of the flexible workforce has grown up out of the line of sight of HR; it’s been procurements’ realm. Under that jurisdiction, all the best practice development focused on controls and governance and price. Not a word on employer brand or workforce optimization. In fact, just the opposite. Co-employment risk aversion drove a large wedge between the full-time and the non-employee workers inside the enterprise. Hence, strategies to attract workers into the enterprise have been driven by two separate entities, with dramatically different objectives. As a result, the lack of synchronicity is now on stark display. Again, executive management has lost visibility into the human capital configuration and into how work is getting done. As such, we are seeing gross inefficiencies and new exposures grow up without a single sponsor to “mind the gap,” as the London underground conductors always caution.

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A Third Dimension:

In response to the increasing willingness of workers to ply for flexible work, we’re witnessing a rapid expansion of technology-based platforms gaining prevalence for presenting opportunities and managing this swelling number of workers. Talent Tech Labs refers to these emerging platforms as temp labor market places and freelance management systems. Initially, these upstart new market entrants gained traction with small and mid-sized buyers of temp services. But as these new platforms sought to catapult into the enterprise accounts, they have encountered some unanticipated gates. These fresh business models now find themselves ensnared in the governance and controls domain that MSP’s and VMS’ have as their purview. Again, out of line of sight of HR and talent acquisition.

The Conundrum:

With talent acquisition and development being identified as a strategic imperative for competitive success, how much longer can businesses abide this disconnect in the ways talent is acquired and managed?

There is no doubt that working toward the effective management of a converged workforce will be fraught with challenges. It will be a complex undertaking. First and foremost, it will require executive leadership to recognize the peril of inaction. Unfortunately, several studies, including work by ERE Media and SIA, have documented that there continues to be very limited interest in the executive ranks to address this challenge. Working towards resolving this growing labor engagement conundrum will require strong sponsorship.

It’s interesting to me that a number of players surrounding the fray are actually more proactively seeking ways to address the challenge. MSP’s and VMS providers we spoke with see the challenge, at least around the talent acquisition component. And they’ve been mindful of the threats that temp labor marketplaces and freelance systems pose to their longevity. We are seeing several reactions to the “third dimension” unfold. In one instance, the most widely deployed VMS, Fieldglass, is creating open API’s for marketplaces to plug into, so as to maintain the governance that corporations insist upon when engaging interim labor. In the case of Beeline, they are building a bullpen of “partners” that hope to roll in these emerging new sourcing solutions and marketplaces, bringing flexible talent into their enterprise accounts. A few of the MSP’s, especially those who also have RPO offerings, are developing or acquiring either their own home-grown marketplace access or acquiring them, as Randstad did with Twago.

It’s our expectation that the MSP and VMS providers who manage the spend on contingent workforce for enterprise clients will evolve some viable solutions for cautious corporations reliant on increasing volumes of flexible work. But their historical touch point has been procurement. Clearly, not the best sponsor to be charged with evaluating technologies for workforce planning, talent attraction and oversight of a mixed workforce. Can the MSP and VMS vendors somehow get past procurement to draw in HR and TA? Until now, it didn’t seem likely.

Promising Signs on the Horizon:

Talent Tech Labs recently conducted a survey of HR, talent acquisition executives, and suppliers as part of a state of the industry report to be released later this year. The data collected uncovered a promising insight. More than 70% of those surveyed believed it was inevitable that TA would eventually take the reins of acquisition of contingent workers. It can’t happen soon enough! Given the rapid growth of the available market of workers seeking flexible work options, the time is right now for TA to take the lead. If they don’t, they will be managing only the recruiting the shrinking full -ime employee base. And all the best recruitment and hiring solutions and practices that are coming to market won’t be fully appreciated across the continuum of all the workers, regardless of how the worker is ultimately engaged.

Interested in exploring this topic more? We’ve partnered up with Twago to release a whitepaper, Talent Pool Management is a Must-Have Strategy for All Employers.

MORE: Recruiting Talent in Today’s Gig Economy

Brian Delle Donne

Brian Delle Donne
Brian Delle Donne is president of Talent Tech Labs, which engages in investigation, research, validation, and acceleration of talent acquisition technology.

Brian Delle Donne
Brian Delle Donne is president of Talent Tech Labs, which engages in investigation, research, validation, and acceleration of talent acquisition technology.

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