It’s not rocket science: when you manage contingent workers – in fact, any category of worker – with a more strategic, considered approach, they’ll offer greater value and potential to your business.
If your organisation has a workforce with multiple worker types, you’re likely working from a robust workforce plan, suited to this mix of talent. And when I say ‘mix of talent’ I’m talking contingent, permanent, part-time, casual, and/or SOW labour.
In this mix, contingent workers are proving to be an increasingly valuable resource – one that organisations of all sizes, seem to be reliant upon.
From our experience working with clients who have contingent workers in their midst, we’ve recognised that the greatest value of contingent workers is primarily drawn from how well they’re managed. Yes, talent engagement and onboarding are important first steps in providing a positive contingent worker experience, but the ongoing management approach is where the real gold lies.
When you’ve taken the time to map out your workforce plan, and you’ve included contingent workers within the total workforce mix, your next major priority is to extract the greatest possible value from these workers. Right?
But first, let’s take a look at the key elements of a workforce plan:
The four key components of your workforce strategy can be narrowed down to the following:
Workforce size: where achieving the right staffing levels is the primary goal. Too many vacancies, and the business output, profitability and performance will decline. Another priority in size, is the successful achievement of minimal attrition.
Workforce cost: where your plan enables the business to achieve the optimum cost-benefit from all categories of labour. This includes paying fair rates for talent (permanent and contingent) and providing other labour incentives for maximum worker engagement.
Workforce competencies: where your ability to forward plan the technical needs of the business is in scope. Your lens on existing competencies in the business offers the ability to better determine current and future needs, including the opportunities presented by succession planning.
Workforce agility: where you strike a balance of worker types, enabling the business to adapt to market changes with ease and efficiency. Contingent workers play a key role in enabling a business to be agile and responsive while sustaining output and profitability.
Manage contingent workers strategically
A well-planned, well-executed approach to the engagement and management of your contingent workforce, will facilitate better outcomes from your investment in these workers.
It pains me to say this, but we’ve seen many line managers and organisations take a very ‘hands-off’ approach to contingent workforce management over the years. Almost a ‘set and forget’ mentality. I can’t emphasise enough how risky – and detrimental – this approach can be.
Old school thinking on managing contingent workers was frequently approached with a focus purely on the outcomes they were to achieve. There was little attention paid to their happiness, their organisational fit, or their level of active engagement – and typically in these circumstances, the worker would rarely go beyond the call of the contract.
It’s incredibly important to include contingent workers, just like permanent employees, into your employee engagement and management strategy.
As I said earlier, the increasing reliance on these workers in today’s market, places a heavier weighting on them as a source of critical skills, business agility and quality performance.
Red flags: hurdles to contingent worker optimisation
Critically, line managers and those engaging contingent workers, need to be across their outcomes and achievements, to be able to successfully extract the greatest value from them. How you manage contingent workers, must include visibility of their output.
Under-management of contingent workers is still prevalent.
Data from the SAP Fieldglass research report, Contingent Workforce Insights 2019: Expertise in Full Force found that:
- 47% of executives were well informed about the contract terms of their contingent workers
- A mere 31% were highly informed about the quality of work, delivered by their contingent workforce
This is a major red flag!
With so little insight into the goals, expectations and output of their contingent workforce, managers are in an untenable position to effectively measure the true value delivered by these workers.
Therefore, extracting and maximising value from these workers is near impossible.
From the same study, other red flags were raised from the under-management of contingent workers. These presented a significant risk, not only to the efficacy of the project or deliverables at hand, but to the organisation overall. These risks included:
- 47% of executives reported digital security breaches with contingent workers sometimes, frequently or nearly every engagement
- 40% of executives reported compliance breaches with contingent workers
- 36% of executive reported worker misclassifications
Gaining a competitive advantage
It’s increasingly apparent that contingent workers are playing a key role in this era of digitisation. With highly specialised skills, contingent workers offer organisations the opportunity to access technical skills that the business doesn’t always need in the long-term. The problem we’ve seen in the past is this: the business doesn’t understand or have complete knowledge of the deliverables of the worker. Nor what success looks like.
However, with a strategic framework in place, organisations can attain visibility of all facets of their contingent workforce. And with this heightened visibility – even down to who is doing what work, and what resources inside the business they’re accessing – line managers can better understand and see the quality of the contingent worker’s output. This visibility, in turn, enables the business to make informed decisions about workers performing at optimum levels, across business lines. This is particularly powerful for worker reengagement. It also means, better decision making with regards to worker compliance.
All of this equates to higher performing teams, higher quality output, a lower risk profile for the business. And ultimately a competitive edge.
All in all, a strategic approach as you manage contingent workers has zero downsides and only competitively advantageous upsides.
It’s time to take your approach to manage contingent workers way more seriously.
As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five 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 please contact us here.