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 firstname.lastname@example.org. Your business is worth it.