11 Oct RTT – Managing a Contingent Workforce
These are the thoughts and takeaways from the latest Resourcing Think Tank (RTT) held on Thursday 12th October 2012 hosted by Thales’ Martin Wiles (Head of Contingent Resourcing), titled ‘Managing a Contingent Workforce’.
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Resourcing professionals from leading UK and other international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
The workforce of today is incredibly complex with the multitude of pressures that sit alongside finding the right mix of talent. This coupled with procuring and managing flexible and contingent workers, poses a series of challenges which, if neglected, can lead to financial, legal and compliance problems. With this in mind, a more strategic approach needs to be adopted to help reduce company costs and mitigate the risk of employing contingent workers.
Using a Master Vendor for Recruiting Contingent Workers
Using a master vendor (MV) or managed service provider (MSP) for delivering the full end-to-end contingent recruitment process can prove a very efficient way of sourcing contractors and temporary staff. This type of service typically includes: overall programme management, reporting and tracking, supplier selection and management, order distribution and consolidated billing. Think Tank attendees have reported a 96% fill rate on vacancies using a MV and an efficient three-working-day / 72 hours window for sending shortlists to managers. Within this type of programme all orders / requirements will go to the MV to either be filled by them or passed down to their second tier of suppliers. It’s therefore important to ensure that all second tier suppliers know where they stand in relation to the terms that the MV has in place with the client, to ensure there are no conflicting arrangements.
Our experts’ views:
a) Ensure there are strict consequences for managers who deviate from using the MV, RPO or PSL to ensure that the correct process is followed. In the event of the process not being upheld, a ‘change management programme’ is recommended to create and strengthen engagement / buy-in from the wider business
b) When selecting a MV or MSP, ensure that your organisation’s core competencies match theirs and where possible opt for a dedicated delivery team who specialise within your market place.
Vendor Management Systems
Managing vendors in relation to the contingent workforce through a vendor management system (VMS) can be a great asset to the HR function for managing: labour across company divisions, statements of work, independent contractors and specialised pools of individuals. FieldGlass, an online vendor-application for procuring temporary staff, was discussed favourably for its reporting capabilities, customisation and from a management information (MI) perspective.
Our experts’ views:
a) Most ATSs are moving online and Taleo, a cloud based talent management system, can be effectively integrated with many VMS tools to support recruiting a contingent workforce
b) IQ Navigator, a tool for helping businesses manage their contingent labour, is another system which can be easily integrated with a VMS.
Converting Contractors to Permanent Staff
An emerging trend within the work place is the reluctance of contingent workers to convert to permanent employment. This is believed to be due to higher day rates, more flexible working hours and looser contractual agreements; possibly a reflection of an increasing ‘free spirited’ mind-set, which is perhaps fuelled by the challenges of getting on the property ladder and an increase in long-term travelling breaks. However, from a monetary perspective it’s not always financially viable to renew contingent workers’ contracts when the most practical solution is to employ the individual on a permanent basis. What’s clear is the importance of developing a system or formula which can assist a decision around whether to present a job opportunity as permanent or contract. Additionally, a similar initiative should be considered to evidence a business case for changing a contractor to a permanent employee, weighing up items including: length of tenure, role criticality and availability of skills. This type of process should prompt managers to justify their reasoning for continuing to renew contracts based on the previously stated criteria. HR Business Partners and Recruitment Business Partners need to be involved in this decision from a strategic point of view to assist with pulling MI and addressing cases within the business units.
Our experts’ views:
a) Proactively head-hunt contractors within business for filling permanent roles to increase internal mobility and decrease the number of unnecessary contractors
b) Develop a set of guidelines illustrating how hiring managers need to arrive at decisions about whether to make a permanent or contract hire
c) Check when a contractor comes on board that they haven’t recently contracted at the business before.
Monitoring contractors’ expenses
A final point addressed during the Think Tank was the resourcing function’s involvement in managing contractors’ expenses. Line-managers are ultimately responsible for the approval process but it was advised that the recruitment function take time to educate managers on the company’s contractor expenses policy during on-boarding. Additionally, it’s suggested that an online tracking system be developed to highlight the volume of expenses and this data be monitored on a periodic basis (every 3-6 months) to highlight anomalies.
- Build relationships with suppliers to understand what you should be looking for based on their market expertise– develop a partnership and consultative relationship
- Keep it clear and simple – try not to solve all problems in one go
- Applicant Tracking System (ATS) are moving to open platforms (Microsoft dynamics and Salesforce)
- Bring decision-making in house to increase front-end hiring manager engagement
- Create strong processes to justify a contract or permanent hire supported by MI, length of tenure, role criticality and availability of skills
- Ensure that your values are aligned to those of your suppliers to effectively work towards achieving the same goals.