In the ever-evolving world of work, the pandemic has accelerated the importance of the contingent and contract workforce. Employers are now fully aware of the immense value in striking a balance between full-time employees and the flexible and adaptable contingent workforce. The groundwork for this recognition was already laid before the pandemic hit, with Deloitte's Global Human Capital Trends report showing that only 42% of the 11,000 experts surveyed had workforces primarily composed of permanent employees. Additionally, half of them were actively utilizing a significant number of contracted workers, 23% had embraced a substantial pool of freelancers, and 13% tapped into the wealth of gig workers.
Fast forward to today's "better" normal, and it's safe to assume that the balance has tilted even further toward a flexible and dynamic workforce. However, the challenge now is managing this diverse and versatile labor pool, especially during the holiday season and beyond.
Navigating the Contingent Workforce Landscape
The contingent workforce is a vibrant mosaic comprised of various segments, each with unique skills, needs, and preferences. Despite this diversity, it's often bundled under the term "contingent labor." To successfully manage this multifaceted workforce, you must have clarity about who you're working with, their distinct requirements, the suitable contracting methods, and the complex landscape of risk, liabilities, and legal considerations. It's important to note that these considerations can vary significantly from one country to another, adding another layer of complexity.
Let's delve into some key segments of the contingent workforce:
- Independent Contractors: These self-employed individuals offer services under a contract for a predetermined price and timeframe. They often work independently, providing specific skills and expertise.
- Gig Workers: Gig workers come in various forms, from freelancers to temporary employees. They enter formal agreements with on-demand companies to provide services.
- Statement of Work (SoW): This engagement model involves a client hiring a third-party professional services company to deliver specific services or work for a predetermined price and timeframe, often focusing on deliverables or milestones.
- Agency Contract Labor (Temp Workers): These individuals are employed and compensated by temporary agencies to fulfill specific roles for a fixed duration. They're commonly used to cover permanent employees' leaves, peak periods, and more.
Each segment has its unique considerations and requirements, making effective management crucial.
The Challenges of Contingent Workforce Management
While recognizing the value of the contingent workforce is essential, managing this diverse group of workers comes with its challenges. Given the variety of suppliers that source and pay contingent labor, disjointed management practices are shared. Additionally, gathering comprehensive information about your contingent workforce can be like herding cats, with data scattered across various locations. Add compliance concerns to the mix, such as ensuring all workers are employed and operating within legal boundaries, and you've got a recipe for complexity.
For HR teams, this can be a significant drain on resources, especially during a time of year when demands are already high.
Best Practices for Effective Contingent Workforce Management
To navigate the complexities of managing a contingent workforce, you need a strategic approach. Here are some best practices to consider:
1. Transparency is Key: The more accurate information you have about your contingent workforce, the better you can develop a robust management strategy. Complete transparency is essential, ensuring you know all available skills, regardless of employment status or contract duration.
2. Collaborate Effectively: Historically, HR and procurement have sometimes operated in isolation when managing the non-permanent workforce. This can lead to resource overlap and efficiency challenges. Collaboration is vital to ensure no talent is overlooked.
3. Leverage Technology: Managing a contingent workforce involves handling widely distributed data. Centralize this information for clear visibility using a cloud-based Vendor Management System (VMS) as a central information hub.
4. Rely on Contingent Workforce Consulting Expertise: While the above tips empower your HR or procurement teams to manage the contingent workforce more efficiently, some experts can handle this on your behalf. Utilizing Contingent Workforce Consulting Expertise, such as Tracz Consulting, simplifies managing external and non-permanent workers.
Keeping Contingent Workers Engaged During the Festive Season
The holiday season is upon us, and while it's a time of joy and relaxation for many permanent staff, it can be uncertain for temporary workers. Shutdowns, reduced hours, and changes in timesheet approvals are common issues raised by temporary workers during this time of year. However, there are steps you can take to ensure that your contingent workers remain engaged and motivated during the holiday season.
1. Early Communication: Communicate your organization's shutdown dates and reduced hours well in advance to your labor hire firms and temporary workers. Show that you understand the impact of such changes on your contingent workers, giving them ample time to manage their finances accordingly.
2. Set Up Approvers: Ensure that individuals responsible for approving timesheets and invoices will be available during the holiday season to avoid payment delays. A missed pay date during the Christmas period can lead to anxiety for contingent workers.
3. Transparent Recruitment: During the recruitment process, make sure your temporary staff understands how their pay rates work and any leave-loading policies. This clarity can help temporary workers make more informed financial decisions.
4. Consider Business Needs: Assess whether your organization needs temporary staff during your typical shutdown period. This is an opportunity to keep essential operations running and offer temporary workers a chance to contribute, even if it means reduced hours. Many organizations measure this as shutdown savings.
With the contingent workforce representing a growing percentage of an organization's workforce, it's crucial to consider the impact the holiday season can have on them. Addressing these concerns will ensure you have an actively engaged contingent workforce ready to resume normal business activities after the holidays.
The Gifts of Effective Contingent Workforce Management
As the holiday season approaches, remember that managing a contingent workforce is not just about handling the present but also preparing for the future. The same strategies that keep your contingent workers engaged during the festive season can be applied to other changes and expansions in your workforce.
The best part is you don't have to navigate this complex journey alone. Partnering with Contingent Workforce Consulting Expertise, like Tracz Consulting, can make all the difference. They can help you prepare not only for the holidays but also for handling changes expansions, and incorporating various types of contingent labor into your program.
This holiday season, consider these steps to manage your contingent workforce effectively, and remember, the gift of effective contingent workforce management keeps on giving long after the holiday season.
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