In this third week of our three-part series on the issue of hidden contingent workers, we’re looking at the solutions business can consider, to circumvent a repeat of this high-risk situation. The general lack of visibility of your contingent workforce – both cost and headcount – can be devastating, so knowing how to correct the situation, and forge a path ahead, is critical.
But first, let’s recap the four stages of this content series:
- The negative by-products of unaccounted contingent workers
- Examples of how organisations have uncovered these workers
- Solutions to resolve the issues of hidden contingent workers (that’s this post!)
- Strategies to prevent re-offending & the path forward
Last week, we looked at the common scenarios organisations find themselves in, when they discover an over-supply of contingent workers in their business: a potentially high-cost, high-risk situation.
This week, we’re delving into the solutions organisations can set in place to resolve the issue of these unaccounted for contingent workers.
The organisation inadvertently (or not) retains high-value workers, who are seamlessly integrated into a workforce, at project’s end. The potential for this to happen is high, if a contract worker’s contribution has been significant or especially positive and, for example, the business sees them as integral to the project’s ongoing success.
With a high-functioning Project Management Office, or alternatively, well-constructed and well-adopted hiring processes in place (for ALL hires), which involve HR as appropriate, this situation will become less likely. There’s always the chance a line manager will want to keep a high-value worker under the radar, for their department’s benefit. Hence, a business-wide mandate (best set-up on the back of a strategic workforce audit), with associated processes that are clear, simple and easy to execute, will help to rectify a repeat of this scenario. Ongoing monitoring will be required, for continual adoption and success.
Where the business approach is more aligned to an employment relationship, as opposed to a commercial relationship. This scenario is particularly common in knowledge-based organisations, whereby the team on ‘offer’ to clients is inclusive of the contingent worker/s. This is an easy trap to fall into with highly specialist (read: valuable) talent, and one that can cause real issues for the organisation from a non-compliance standpoint.
Keep clear boundaries between contingent and permanent talent. And maintain these boundaries through simple processes and reporting structures.
HR aren’t involved in the hiring of contingent workers. Probably the biggest cause for concern, AND potentially the biggest source of ‘unknown’ contingent workers in a business. Also known as ‘rogue hiring’ this is a classic scenario for lack of contingent worker visibility and workforce spend.
Mandate business processes that systematically involve HR in the hiring of contingent workers. It’s pretty simple. Similarly, undertake a regular strategic plan and audit of your workforce, keeping HR at the helm of the process, but also, include line managers so everyone who touches a contingent worker, is involved. And none remain hidden.
When the contingent worker isn’t given a specific, well-defined remit, with clear boundaries around timeframes, KPI’s and expected outcomes. So a ‘grey area’ engagement. This is a risky move by the organisation (or line manager), as the contingent worker is operating in a nebulous, potentially changeable context, with no end or outcome in sight.
By undertaking a strategic workforce plan and audit, the organisation will uncover contingents perceived as perms, probably a lack of reporting on the deliverables of the role, or both. When a contingent worker’s role is systematically accounted for by management through a strategic workforce plan and audit, their likelihood of becoming ‘hidden’ is reduced significantly.
Further Food For Thought
By regularly undertaking a strategic workforce plan and audit, your business will experience a host of added benefits outside of uncovering – and preventing any future – hidden contingent workers. These include:
- Your workforce capability will be likely increased as you’ve planned ahead. You’ll reduce the cost of your workforce and you’ll be able to better align talent resources to the future needs of your business. This is closely aligned to another topic we covered recently on Total Talent Management – have a read, it’s worth it
- You’ll be able to better identify those roles and skills within your business that are crucial to its ongoing success. And invest accordingly
- Future-proof your business, by identifying those roles for which you’re able to retrain existing talent and those for which you can outsource as contract
- As long as the strategic workforce plan & audit encompasses contingent talent as well as perms, your ‘whole of business’ approach will prove far more efficient and cost-effective, than taking a siloed approach based on worker classification
Conversely, if you don’t address the issue of hidden contingent workers, your business is placed in a genuinely high-risk situation. For example:
- Exploding costs of your contingent workforce
- Exposure to statutory non-compliance and the associated penalties
- The risk of a data breach or loss of IP
- Rogue hiring – leads to costs blowing out, high turnover of contract talent, and poor hiring decisions
- Poor contingent workforce accounting practices: established procure-to-pay processes are ignored so inefficiencies build
As you can see, there are many positives to getting your contingent worker accounting in order, as there are, conversely, downsides. Next week, we’ll take a look at future-state: how you can ensure your business keeps track of the entire contingent worker population.
To read up on the first two posts in this ‘hidden contingent workforce’ series, click below.
- PART 1: The negative by-products of unaccounted contingent workers
- PART 2: Examples of how organisations have uncovered these workers