There are genuine risks associated with engaging contingent workers in your business. And at CXC, we’ve seen first-hand when these risks turn into first class contingent workforce nightmares.
Nightmares that can destabilise a business. Or jeopardise the very operations that keep your business ticking over.
These nightmares can present in a multitude of formats…
Such as ‘hidden’ contingent workers who are not on the radar of management and are actually misclassified.
Or technology risks associated with workers who are off-contract yet haven’t been off-boarded correctly.
Or even the risk of losing your exclusive IP.
Yes… these are the headache-inducing nightmares that you MUST avoid. And you can, if you’re approaching the management of your contingent workers with a strategic, best-practice mindset.
Today, I’m going to walk you through a few contingent workforce nightmares that we’ve experienced first-hand. And guide you so that you’ll never be in a position to face these situations. Ever.
Contingent Workforce Nightmares: The Ghost Workers
As you know, contingent labour offers innumerable benefits to organisations today – especially in the era of COVID. Acute skills shortages are driving many organisations to look at new ways they can build a world class, high-performing talent pool – both active and prospective. In support of this, companies are looking to apply specialised labour to specialised tasks: labour that is increasingly contingent.
The problem is this: if your workforce isn’t cohesively managed through a centralised system, there will always be contingent workers who fall through the cracks. It’s inevitable. It’s for this reason that the concept of total talent management has become so popular: with more contingent workers in the field, companies have had to simplify their labour management processes to avoid one of the biggest contingent workforce nightmares.
You see, if you don’t know precisely who’s in your workforce at any given point in time, your risk of non-compliance is huge.
How does this happen?
Take this as an example:
Line managers hire contingent workers without consultation at the HR or Procurement level.
This ‘rogue hiring’ often introduces pay rates that are uncommercial. And without a centralised system of management across the entire contingent population, these unapproved contingent workers might stay on in your business, for a long, long time.
This means your risk of non-compliance and breaching statutory requirements escalates. Yes, nightmare.
Legislation is obviously an important consideration in this context. This is why the Fair Work Act plays such a crucial role, in keeping organisations compliant. The following issues are key considerations for avoiding one of the major contingent workforce nightmares:
- Getting the classification of the contingent worker right
- If you’re a large organisation you need to address changes in compliance laws, not continue to operate on the basis of ‘how we’ve always done things’
- To this end, keep abreast of updates on workplace laws: Check with the Fair Work Ombudsman website for changes and compliance stipulations
- Make sure you set defined parameters for contingent workers: So contractors’ roles don’t become ‘grey areas’, make sure you set expectations from the beginning
With poor visibility across the contingent workforce, there’s also the nightmare of poor contingent worker performance. This makes the ‘Ghost Worker’ nightmare even worse. How? Potentially, you’re paying too much for a worker who’s not delivering. It’s a lose-lose situation.
So, for the entire contingent labour-force in your business, you need to be able to answer the following questions:
- How long have contingent workers been with the business?
- What systems, processes and IP do they have access to?
- Who is managing their performance, deliverables, and monitoring KPI’s?
With no consolidated view for integrating external and internal talent, many companies have a number of different systems in place, for different talent pools and it’s easy for workers to slip through the cracks.
Contingent Workforce Nightmares: “Security!!”
Somebody call security!
Security risks are a serious threat to organisations who lack a robust, strategic management program for their contingent workers. And security issues come in many guises, so you may not be across the full scope. These include data loss, IP theft, and the use of unsecured online environments amongst others.
However, with well-planned, best practice process in place for onboarding, talent management and offboarding, you’ll minimise security risk nightmares. And you’ll eliminate the potential catastrophic consequences.
Consider undertaking the following to mitigate security risks:
- Ensure new contingent workers are required to sign NDA’s upon commencing with your business
- Place restrictions on competitive contracting after their tenure with your organisation
- Make sure your legal team (or hired lawyer) is across all contractual arrangements with your contingent workers
The evidence of risks in organisations without a strategic contingent workforce management program in place, show routine breaches in security standards. Below are just a few examples of breaches that are happening …
- 1 in 5 contingent workers used cloud apps like Dropbox or Google Docs to upload proprietary information without the knowledge of the IT department
- Less than half of the contingent workers were informed of any application or data restrictions during their onboarding
- 72% stated they were provided with admin privileges in the organisation’s IT system
- 66% said they had access to corporate data within cloud apps AFTER they had completed their time in the organisation
- Only 28% of workers said the organisation monitored their use of cloud apps for mission critical documents
Contingent Workforce Nightmares: Forgettable Onboarding
Unfortunately, we’ve seen many onboarding nightmare stories, here at CXC. Situations where contingent workers are simply not set-up for success at the outset of their contract.
If you set a standard of poor communication with contingent workers during onboarding, their confidence in your business and your ability to fulfill their career needs will be diminished.
Some key tips to ensure your contingent workforce nightmares don’t include onboarding disasters, include:
- Set clear, identifiable boundaries about their role and deliverables
- Set time and goal specific KPI’s
- Be systematic about engaging them in the relevant workforce population, as pertains to their contract and the project
- Provide plenty of helpful, useful information from the get-go
- Ensure the business feels prepared for their commencement in your ranks, so there’s no unpleasant surprises
- No-one wants to feel like an outsider: give them a sense of belonging and involvement
- Set realistic expectations of their time and output. Give them a chance to warm up to the role and get a feel for your business
Contingent workforce nightmares in your organisation will keep you up at night, if you’re a business leader or HR partner. Yet they’re absolutely avoidable. By being strategic in your workforce management approach, and informed of the potential risks, you’ll be able sleep easy.
As one of the world’s top suppliers of contingent worker management solutions, CXC is perfectly positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across 5 continents and decades of experience, we can assist with every aspect of your program.
If you would like to find out more about how we can help with your contingent workforce solutions please contact us here.