Non-Employee Labour: Maximising ROI
Most ‘Future of Work’ experts speak about the expected continued growth in the numbers of non-employee labour – both from a worker and a business standpoint.
What many don’t speak of is, if this trend is to continue, how can organisations achieve the optimum business environment (output, ROI), from their non-employee labour? How can they get into a position where they can retain or reengage the workers they trust, and have had a good experience with?
There are a couple of steps business can take to maximise the ROI on their non-employee labour. A strategic contingent workforce road map is one: this will go a long way to avoid the feeling of talent insecurity and project failure – that deep-seated dread many of you will be familiar with, of an impending exit of a worker (or workers). Another is caring for your non-employee workers.
Let’s look at these strategies further….
A Contingent Workforce Roadmap
We’ve developed a proven roadmap for managing contingent workers, here at CXC. This roadmap is made up of four pillars for achieving a best practice contingent workforce management strategy. You can take a look at four short videos we developed, right here. In summary, these pillars are comprised of:
PILLAR 1: QUALITY
- Ensuring your talent pool of non-employee workers is of the highest quality
- Refine your internal processes: streamline and get strategic about your contractor sourcing, factoring in all internal stakeholders
- Review your PSL: including the performance of your talent sourcing agents, their fees and service standards
PILLAR 2: EFFICIENCY
- If your internal processes aren’t in order, you’re program for managing non-employee labour will result in a sloppy, uncompetitive workforce solution
- Think slick internal processes & procedures. Areas where you can improve efficiencies include, amongst others:
- Consistent SLAs across all your recruitment providers
- Consistent fee structures for talent sourcing
- Reigning in rogue hiring and ‘hidden’ contingent worker engagement
- Quality data to assist in making better contingent worker decisions
PILLAR 3: REDUCED COST BURDEN
- The cost benefits of taking on contingent workers will be nullified if the program isn’t established as a strategic roadmap
- The result could be an explosion – rather than a reduction – of project costs (the very reason you engaged contingent workers in the first place)
- Some reasons for costs getting out of hand in the absence of a contingent workforce roadmap, are:
- Poor governance on pay rates
- Poor program admin
- Elongated time to contractor productivity
- Inaccuracies on contractor invoicing
- Inconsistent pay rates
- … amongst others
PILLAR 4: RISK MITIGATION
- Risk is one of the major factors deterring many employers from embracing the ‘new world of work’… as non-compliance with the often-changing workplace legislation, especially around non-employee labour, can be a major fear factor
- Setting a robust contingent workforce roadmap in place will help to mitigate a multitude of risks, including:
- Non-compliance with ATO rules & regulations
- Worker misclassification (like co-employment) and the subsequent payroll tax penalties
- Loss of IP
- Visa expiry of overseas workers
- Contract expiry will elevate risk exposure
By using these four elements as a guide to your non-employee worker roadmap, your business will be much better prepared for a successful future of work.
Total Workforce Management
With over 40 percent of the total global workforce now working ‘contingent’ (according to Ardent Partners), Human Resources departments are having to reach beyond a focus on perms, and now MUST become knowledgeable and practiced at overseeing a blended workforce of contingent and permanent talent.
Why? The traditional model of HR managing perms, and Procurement managing non-employee labour, is becoming redundant. Quickly.
Enter: Total Talent Management.
Aligning Procurement and HR in a total talent workforce management approach, produces significant benefits to the organisation. Improved agility (see below) and process efficiencies are just the start. Crucially, the business will be afforded the time and – when established correctly – the intelligence, to make more strategic talent decisions: from sourcing to hiring, and project management staffing, total workforce management has the potential to transform an organisation for a successful future.
Technology is your friend
As organisations – particularly HR functions – become increasingly data driven, decision-making using AI to assist the organisation’s future state, becomes a reality. Predictive analytics is a key trend for 2019, and one that will enable organisations to take action today, for a successful future. These analytics tools not only apply to talent, and future-scoping skills to bring into your business. They’re also a boon for deciding on the best service providers and technologies, for impending projects. By embracing AI and predictive analytics, organisations will have a better lens to make decisions about the non-employee needs of the organisation’s future.
Being able to respond quickly and effectively to specific circumstances or new opportunities is a hallmark of a successfully agile organisation. Coupled with the ability to tap into the right talent at the right time – an on-demand, agile workforce – and you’ve got a truly dynamic business environment. Note the words ‘right talent’: so optimum workforce agility isn’t just about securing suitable on-demand talent, it’s about securing the best non-employee labour for the job at the time. Organisations that can balance the right talent, at the right time (so can foresee business skills demands), are the ones operating optimally. And reaping greatest reward for their investment in non-employee workers.
Some closing thoughts on Caring for Non-Employee Labour
Keeping contractors engaged in your business is crucial to maintain business workflow and productivity and to meet the highs and lows of market influences. So… it pays to keep your contractors happy.
Here are five of the top strategies we’ve deployed for our clients, to make their non-employee labour feel they’re important to the business:
- Quality onboarding: starting the contractor relationship on the right footing
- Setting clear goals with relevant boundaries: so the contingent worker has a sound understanding of expectations and deliverables – no ad-hoc requirements or scope creep
- Consistent communications: this may seem really simple, but keeping contingent workers ‘in the loop’ is an incredibly powerful move
- Milestones: setting project delivery goals not only keeps a project on track, it’s a good way to check in and see how your non-employee labour is going in the job
- Call for feedback: ask the contractor’s advice on how the project is going, on their experience of working in the business as a contractor and where they believe things could improve.
There’s a lot to think about. But with a strategic approach, and preparation, your total workforce – contract and perm – AND your business can look to the future of work with excitement. Not dread.