We’ve been looking at workforce management in our last few blog posts. Trends regarding contingent workers and how to implement a contingent workforce strategy are two of the topics we’ve explored. But maybe you’re still not sure if you’re ready to expand your staff complement to include contractors, freelancers, gig workers, etc. Your policies and procedures are all geared to managing your permanent employees, and the notion of moving away from these familiar processes may be a bit daunting. How do you know you will reap the benefits?
Ironically, contingent workers tend to be used by very large and very small organisations. Large companies have sufficiently robust infrastructures to manage the on- and off-boarding of contractors, and usually have a variety of projects needing specialised skills for a fixed time period. Very small companies, on the other hand, are not equipped to carry the overheads of all the skills they require, particularly when they don’t require them all the time. It makes obvious economical sense for a micro or small enterprise to engage certain functions or activities on a contingent basis. But if you are in the middle – a medium-sized company – with all the basic departments staffed by qualified professionals – HR, finance, IT, communications, etc., you may be unsure as to what value a contingent element would add to your current workforce strategy.
It may be helpful to consider the following “Big 5” advantages that contingent workers bring to an organisation and ask yourself if your business could benefit from them.
Does your business experience fluctuating demand? Are there seasonal variances or is a lot of your activity project-based? A flexible workforce could help you navigate these variable requirements, insulating you from the ups and downs and the risks associated with hiring and firing permanent employees to meet demand. Contract workers move on when the contract is finished and the off-boarding process is simple. You may even find a contingent workforce makes expansion more attractive, as it removes some of the risk and allows you to take a just-in-time approach to your staffing requirements.
If the cost of contractors has deterred you in the past, it’s worth considering the total cost of an employee. You may find that the “premium” you associate with contractors is not as much as you think, when you factor in the cost of recruitment, on-boarding, benefits, etc. Contingent workers cover their own holidays, sick days, medical aid, etc., and the cost of recruiting, on-boarding and termination is covered by the managed service provider (like Highveld) providing the resource.
Timeliness, aka speed
Think of how long the typical recruitment and selection process takes. If you manage to fill a vacancy in less than three months, from first advertising the post to inducting the new employee, you are either very efficient or very lucky. Finding suitably qualified people takes time. But if you want to be seen as an agile and flexible organisation, there are times when you must act quickly. A contingent workforce gives you the element of speed. Contractors and freelancers can be sourced quickly in the event that an unforeseen need arises urgently. Managed service providers have databases of qualified and vetted professionals who can respond to your request immediately.
Perhaps you are working on a project that demands a particular specialist skill. When the project is finished, that skill may be surplus to requirements. Do you carry the overhead and under-employ the resource, waiting for the next relevant project? Using contingent workers allows you to recruit exactly the skills you need, when you need them, and then part company. It enables you to access far more technical, highly skilled experts than you could afford to employ on a full-time basis. Furthermore, you can usually source these experts at short notice (see “speed”, above).
Temp to perm
Now this may seem contradictory, but those contingent workers could just be a good source of permanent employees. Not all contractors and freelancers will be tempted by such a proposition; in fact many wouldn’t choose any but the “gig” lifestyle. But it is not unusual for a “temp” to fit in so well they are offered…and willingly accept…a permanent job offer from a “casual” employer. If you have a cohort of contingent workers you use semi-regularly, your HR department may see them as a good source of talent for key positions, with the added advantage that you have a performance record for them. You’ve been able to “try before you buy”.
Alternatively, if you are using a contingent worker to fill a gap that is taking some time to fill, you can ask the contractor for feedback on the lived experience of doing the job. Their observations may help you refine the job description and your selection techniques to better identify the most suitable candidate for the position.
Talk to us
Taking the plunge and adding contingent workers to your staff complement can seem like a big step, but a good managed service provider like Highveld can take the strain, leaving you free to focus on doing what you do best – running your business. Let us show you how a contingent workforce can improve your productivity and help you manage your costs.
Contact us on 012 367 5600 or firstname.lastname@example.org. Your business is worth it.
Last week we examined the importance of having a strategy for your contingent workers, to optimise your investment in this vital part of your workforce. Knowledge of developments in contingent workforce management will help you make the most of ever-changing opportunities and manage the ever-present threats. This week we take a look at the evolving trends for contingent labour.
According to Deloitte’s 2018 Global Human Capital Trends, it appears that most non-traditional workers are managed tactically, often by the procurement department. Few organisations have a comprehensive talent strategy that includes contingent workers. In What’s Your Game Plan?, we looked at the challenge of managing labour as an expense, but if that’s your organisation’s policy, you are far from alone. In this year’s survey, only 29% of respondents say their contingent workers are issued contracts, and only 32% track the quality of contractors’ work. Only 16% have an established set of policies and practices to manage a variety of worker types.
A new set of concerns
If contingent workers represent an expense, rather than an asset, it is a growing one. Looking ahead to the workforce of 2020 (only a year and a half away!), 37% of survey respondents expect to see growth in the use of contractors, 33% in the use of freelancers, and 28% in the use of gig workers (nothing to do with gigabytes, the term comes from the music industry – these are workers who take on very short-term ‘gigs’).
Software is keeping up – a number of major HR software vendors have introduced products or product extensions to manage the changing employee ecosystem; but software alone can’t allay the growing concerns employers voice about managing a non-traditional staff complement. 42% of survey respondents are worried about the loss of confidential information, and 36% mention reputational risk arising from a negative perception of non-traditional employees as a concern. Instability is a risk for 38% of respondents, and a similar number are anxious about breaching tax regulations and labour laws in managing or classifying contingent workers.
The drivers behind the changing workforce
We’re seeing an increase in the use of the various kinds of contingent workers, new software to manage them, and rising concerns, even if organisational talent strategies haven’t caught up. But what are the environmental trends driving the shift to a more flexible workforce?
It seems there is no getting away from the influence of AI (artificial intelligence, in case you’ve been living under a rock for the past few years). AI is often used generically, but it is in fact just one of the disruptive technologies, which also include machine learning, natural language processing and cloud storage, and they are quickly becoming commonplace in our personal and professional lives. The experts who develop and maintain these systems are in high demand and short supply, so inevitably many of them choose to work independently, moving from contract to contract (or gig to gig) to provide the support organisations need to make the most of this technology.
The human cloud
‘Cloud computing’ has become the norm. It is becoming less and less common to have whole rooms dedicated to an organisation’s servers. Everything is ‘in the cloud’. Enter the ‘human cloud’. Technology facilitates increasing mobility. The human cloud is defined as a set of work intermediation models enabling the digital establishment of work arrangements. On the one hand, this means that functions from procurement to payment can be carried out centrally, without the need for physical interaction, and on the other hand it creates a mobile workforce for whom geography is irrelevant. Workers may work from home, significantly reducing organisational overheads, and they may even be based on another continent.
Where once being a contractor or freelancer could be a lonely life, lacking the social benefits associated with belonging to a permanent workforce, the social environment for contingent workers is growing. Online communities of independent professionals are collaborating, sharing, learning and connecting. Contingent workers are building their own professional networks. If you want to tap into them, you need to learn to navigate that space.
While no one has yet invented Tinder for contingent workers, contractors, freelancers and gig workers are being used to fill roles strategically, rather than to put ‘bums on seats’. Selection of contingent workers is no longer commoditised, where any systems analyst will do as long as they possess the relevant qualifications. Employers have access to more information about prospective workers, thanks to social media and digital platforms, and are able to make better decisions when sourcing, thus improving efficiencies and reducing risk for both employer and employee.
Total talent management
Total talent management, or TTM, is the new buzzword in workforce management. TTM refers to the integration of the full range of talent sources, from traditional employees to a wide variety of non-employee workers, who might include temporary workers, independent contractors, consultants, freelancers, volunteers, outsourced resources, and even non-human options such as robots and drones. While the classification of workers has become a serious concern, not only here in South Africa but globally (see No Hiding from the Long Arm of SARS), properly implemented TTM brings significant advantages to organisations:
- Ability to source the right talent to fill a specific need, with no geographic restrictions
- Cost and resource savings associated with onboarding processes for full-time workers for projects that don’t require full-time cover
- Capital released and greater flexibility and competitiveness gained by retaining talent on a project-by-project basis
Which way now?
The evidence is conflicting. While use of contingent workers is on the increase, driven by the inexorable advances in technology and changing attitudes to work (many of which are characteristic of the millennial generation – see Bridging the Generation Gap in the Workplace), and the software exists to monitor and manage all categories of workers, most organisations’ policies and procedures have not caught up with the trends. As a result, businesses have a rising set of risks – or at least perceived risks – to manage.
If you are using – or want to use – contingent workers, but are not sure how to make the most of the opportunities they present, talk to us. Highveld can help you optimise your contingent professional workforce, effectively managing quality, efficiency, compliance and cost.
Contact us on 012 367 5600 or email@example.com. Your business is worth it.
Whether you call them contingent workers, your non-employee workforce, independent contractors, or just temps, it’s likely that contingent labour is becoming an increasingly important part of your HR strategy. Or is it? Perhaps you started with the occasional contractor, when a project needed additional resource or a key individual was out of action, and over time your reliance on independent professionals has grown to represent a significant proportion of your total resource, without any planning having taken place.
If this sounds familiar, now might be the time to take a more strategic approach to your flexible workforce.
Who owns it?
This is a key question. If you think the obvious answer is the HR department, think again. In some organisations contingent workers are managed by procurement. This brings a very different dynamic to contractor engagement. Procurement or finance departments may see flexible labour as a financial resource and manage it accordingly – as an expense. However, a talent management strategy may be more relevant. Is your contingent worker strategy mapped to your human capital and total workforce strategy? If it sits in procurement there may be a disconnect…or even a conflict…between the two.
Have you reviewed your policies and procedures recently? Do they accommodate contingent labour? Do you have meaningful controls in place and does your risk strategy include recognition of and mitigation for the risks associated with contractors (theft of intellectual property, etc.)?
Even if your policy framework is up to date, what about your internal communication practices? Do you advise the right people when you make a change to a policy or procedure? If you engage your contractors through a third party, terms and conditions, annual leave, etc. may be governed and managed by the contractor management service. But that doesn’t eliminate the need to keep all staff…employees and contractors alike…informed about company policy on key issues such as internet use or smoking.
Let’s assume for a minute that you have great systems. You know how many contractors you have in every department at any given time (you do, don’t you?). Your records are current and you have nothing to fear from the taxman when it comes to correctly categorising all your workers. But how do you measure the inputs/outputs of your contingent workforce? Do you have robust mechanisms in place to ensure you can quantify the value added by your temporary teams? Peter Drucker famously said, “You can’t manage what you can’t measure.” Do you measure the success of your contractor programme, so that you can defend it if faced with budget cuts or challenged about results?
Skills, structure, standards, strategy
Have you conducted a skills analysis to determine precisely what expertise you need, now and in the future, to meet your business objectives? If you’ve used contractors purely to fill gaps on an ad hoc basis, you may not be optimising this key talent pool. A contingent workforce can…and should…be part of your total resource management strategy, feeding into your overall business strategy.
It’s worth taking some time to think through structural issues such as reporting lines; roles and responsibilities, i.e. what roles do contractors fill and to what extent are responsibilities delegated to them; key stakeholders; and cross-functional collaboration. Strive for efficiencies wherever possible and make sure you engage all the necessary organisational functions, e.g. legal for any compliance issues, IT for data security, etc.
Apply the same standards and rigour to decisions concerning your contingent workforce as you apply to your permanent employees and to other procurement decisions. This includes thorough background checks, unless a contractor management service does this for you. A contractor may only be with you a short while, but untold damage can be done in that time if an unscrupulous worker slips through your defences.
Communicate your strategy to all hiring managers. There may be departments within the organisation that haven’t considered the use of independent professionals but may benefit from a skills injection or more flexibility in resource management. Along with the strategy, ensure everyone in the organisation who may eventually hire contingent labour is familiar with the policies and procedures you have so carefully put in place so the correct process is always followed.
And finally, ensure your permanent employees understand why and how you are using temporary or contingent workers. They may feel threatened, either by the individuals or by your approach – they may worry that you want to replace permanent positions with flexible labour to cut costs, or they may think the temporary workers are after their jobs. Reassure your teams that contingent workers add value and enhance productivity and therefore profitability, and everyone benefits.
You’re not alone
Turn your contingent workforce into one of your strongest assets. Highveld can help you put the right strategy in place and the best contractors in your vacancies. If you want to know more about our contractor management services, contact us on 012 367 5600 or firstname.lastname@example.org. Take your business to the next level with Highveld.
Whether you are an employer considering using contractors for the first time or a seasoned veteran of contingent workforce management, how do you make sure you get the most from your highly skilled temporary professionals? One of the best ways to maximise your investment in this valuable resource is to leave the management of contractors to an expert in the field, relieving you of burdensome administration and freeing you up to do what you do best – run your successful business.
So what should you look for in a prospective (or your existing) contractor management service?
Firstly, how experienced are they? Many recruiters have moved into contractor management in recent years, but you want a company with a depth of experience, not a newcomer still finding their way in the sector. Highveld has been the employer of choice for skilled contracting professionals for more than 25 years. We know tax and labour law inside and out and will ensure you are compliant with the legislation at all times.
Secondly, do they know your industry? It’s only natural for ambitious businesses to want to expand, but let a provider from a different sector make mistakes with some other client when breaking into your industry. You want to work with an expert in your field who understands your specific labour market, the trends, technologies and shifts in supply and demand.
How well can you work together? Do your cultures align? Even if you both maintain the highest standards of quality and ethics, you may approach business in different ways. If so, the relationship may become adversarial or at least difficult. Take a bit of time to get to know each other before committing to an engagement.
Spend some time with the account management team who will be responsible for your business. If you have only spoken with the sales director or CEO so far, it’s important to meet the people who will look after you and your team on a day-to-day basis. You need to have confidence that they will understand your issues and be able to solve your problems without drama or delay.
At Highveld we don’t have a one-size-fits-all approach and we meet each client’s needs in a tailored, personalised manner.
Range of services
Familiarise yourself with the provider’s portfolio. You may only need a narrow service offering now, but what about a year from now? As your business grows or evolves, your requirements may change or expand. You may choose in future to outsource payroll management, for example. Can the service provider you are considering cope with these as yet unrecognised needs? How flexible are they? Will they amend your contract or insist on drawing up a new one?
Highveld offers contractor management services, payroll management, workforce planning, and vendor management. Do other providers give you that?
What is their technical capacity? Are their systems compatible with yours? How much of the process is automated, and how much is still manual (with the corresponding risk of human error)? What is the data security policy and does it meet your standards? Have your IT manager talk to theirs. Make sure you speak the same language.
Capacity and quality
This is a critical factor. It’s a balance because you want the reassurance of a provider with a prestigious client list and a track record of delivery to multiple and complex client demands, but you also need to know you will receive the priority and attention you deserve.
Ask to see the client list. There may be some clients who prefer not to be disclosed; that’s perfectly acceptable. You may also need your confidentiality protected at times. But if the provider is unwilling to reveal anything about their clients, this is a red flag. Ask if you can chat to one or two clients in your field. A provider with satisfied customers should be happy to provide testimonials or referrals.
And don’t stop there. Ask the clients about the quality of contractors hired through the provider. This is where the buck stops. However good the CMS provider’s systems and internal people, you are paying for the value added by the contingent professionals’ services procured through the provider. You need to be assured your provider has access to the best in the business. Highveld has a database of the best temporary staff in your field. Contractors stay on our books because of the superior service they receive from us; and you reap those benefits as the client.
Finally, what is the ratio of account manager to clients? Will you be assured of efficient service delivery or will you have to compete for the time and attention of your client service manager? With Highveld you are assured of personal service carefully designed to meet your needs.
Find out more
To find out more about how Highveld can boost your business, contact us on 012 367 5600 or email@example.com
As a responsible employer, you are careful to create a friendly and collaborative atmosphere and you work hard to maintain morale among your employees. But does your contingency workforce feel the same way about you as your permanent employees do? Many of the tactics used to maintain a satisfied workforce may not be suitable to attracting and retaining contractors, and may even work against you. We’ve put together a few tips to help you ensure your temporary workers feel as engaged as your permanent staff.
How’s your rep?
Contractors talk to each other. Those who have been in the business a long time have worked for numerous employers, and have probably worked with some of the same fellow contractors on different assignments. Inevitably they compare notes. So your reputation plays an important role in your capacity to attract and maintain a contingent workforce. Do contractors trust you to be a top-quality, fair employer who provides attractive contracting opportunities working on exciting projects? Rarely does a contractor limp from one job to the next, taking anything going. Independent professionals choose contracting because they have specialist skills in high demand. When your contract opportunity comes up, it is likely to be one of several they are considering. Therefore the employer’s reputation and the grapevine gossip will have a big influence on the professional’s decision to take a particular job or not.
Once the contractor has decided that your reputation is sufficiently attractive to want to come on board with you, how do you make the working environment one where everyone can achieve job satisfaction, contract and permanent co-workers alike?
Here are some tips on how to integrate your contingency workforce into the team.
Educate permanent staff about the positive role contractors play
Core staff may see temporary employees as a threat – a way of bringing in additional resource, perhaps at a more senior level, without going through the full process normally followed for permanent recruitment. While temp to perm does happen occasionally, often as a way back into employment after retrenchment or other career interruption, most contractors have no interest in a permanent position. They have chosen contracting for the advantages it offers them and wouldn’t swap it for the benefits of a secure job.
By contrast, contractors represent a resource that can help the organisation – and its permanent staff – meet tough deadlines and keep projects on schedule and on budget. Contractors are one step removed from the longer-term objectives of the company, generally only work on one project at a time, and do not get involved in organisational politics. So they help other project staff stay focused and drive the project towards timely realisation of its goal.
Once permanent staff understand this, they tend to welcome their temporary colleagues rather than view them with suspicion. But it does involve a degree of communication and education from the organisation; you can’t expect your employees to grasp this automatically.
All one team
As far as possible, include contractors in organisational communications and activities. Make them feel like part of the team. It only takes a few mouse clicks to add them to the team email list, and is just as simple to remove them at the end of the project, so be as inclusive as possible, especially when it comes to communications. This is one of the key factors influencing feelings of inclusion and exclusion. Invite contractors to team and project meetings. Occasionally it may not be appropriate to do that, in which case a polite explanation is usually accepted without demur.
While we are acutely aware of the need to ensure contractors do not ‘look like’ employees for legal and tax purposes, try to remove the obvious differentiators, such as different colour ID badges or access tags. Allow them to use facilities available to other staff, such as the kitchen or the gym (if you have one). Allocate a locker, if your company has them. And if everyone is going for a drink after work on Friday, invite them along! Even if they can’t come (some contractors commute weekly from far-flung places), they will appreciate the offer.
Of course, inclusion works two ways. It’s hard to include someone who excludes himself. Some contractors prefer to remain aloof and work independently. However, if you explain your organisation’s approach when you brief new contractors and let them know they will be treated as part of the team, and they should consider themselves as such, it is likely they will be grateful for the attitude and will respond accordingly.
Contractors are skilled specialists who are hired for their expertise. They are expected to hit the ground running and don’t need excessive supervision. You don’t anticipate having to coach them or spend a lot of time on performance management. For this reason it is easy to overlook the fact that you still need to communicate with them. If the project deliverables or timelines shift, make sure the contract staff are aware of the changes. If you are including them in project meetings this will happen automatically; but be sure to communicate any scope changes or decisions taken in other forums that contractors might not have access to. This will ensure everyone is on the same page and money is not wasted, as well as making your contractors feel valued.
From a health and safety perspective, accidents happen if contract staff have not been fully briefed on safety procedures. In an office this is less critical, but if you work in an industrial environment accidents can occur when contractors are excluded from usual methods of safe working or when there is a gap in communication between contractors and permanent co-workers.
It’s a people thing
There’s nothing technical or complex about these recommendations. At the end of the day people appreciate being treated with respect, with courtesy and with clear and open communication, regardless of their status in the workplace. If you treat your contract staff with the same consideration you show your core employees, you will get the most from your contingency workforce and reap the benefits of engaged and productive project teams and successfully executed projects.
Tell us your experience
We’d love to hear from you. Whether you are an employer or a contractor, tell us your experiences of working in contractor-friendly (or unfriendly) environments. Add your own tips to ours. What makes a contract enjoyable and successful? What makes it difficult? Leave your comments below.