Contingent workers are on the up; Marcello Sambartolo from WorkForce Software advises how your company can use this as a strong advantage.
Empower Managers with Complete Workforce Metrics
Organisations are turning to contingent workers in record numbers. Some call them temporary workers, while others use terms like freelancers, consultants and independent contractors. No matter what term you use, one thing is clear: the use of free agents is on the rise. In fact IDC has estimated that 35 percent of the workforce, worldwide, can be classified as contingent workers.
Yet many organisations leave these types of workers out of their total workforce metrics – a practice that inhibits the ability to determine whether the use of contingent workers is truly cost effective. Let’s explore some of the reasons why top organisations turn to contingent workers, along with the competitive benefits of including free agents in your total workforce metrics, and how to find a solution that can provide that holistic view.
Why organisations use contingent workers
Using temporary or contingent workers gives employers a high degree of flexibility for ramping up or down as changes occur. According to a 2013 survey of HR and procurement professionals, conducted by the Human Capital Institute, the flexibility to respond to sudden shifts in demand was identified as a top reason why organisations use contingent workers. Indeed, the ability to respond quickly and decisively helps organisations cut costs and maintain productivity in the face of urgent needs, such as unplanned absences or surges in demand – two factors that, unmitigated, can significantly inflate overtime and total labour costs.
Using contingent workers also allows employers to adopt a more strategic, “just in time” approach to managing the workforce. The concept of adding just the right skills, to the right project, at the right time, is widely used in manufacturing to improve business operations, increase productivity and reduce carrying costs. The strategic use of contingent workers allows employers across all industries to apply the same philosophy. By proactively choosing the skills, workers and costs most appropriate for any job, managers are able to mitigate the risk of being over or under capacity at any point in time.
Yet, in order to measure the full benefits of using contingent workers, you need to include them in your HR strategy – and your workforce metrics.
The benefits of a complete view
The ability to effectively and strategically manage your workforce is highly dependent on the availability of accurate, complete information. Access to a cohesive, real-time snapshot of your total workforce metrics – including contingent workers and employees across all locations – allows you to enable informed decision making. More specifically, complete, real-time workforce metrics that co-mingle employee labour data with contingent worker data allow you to:
Respond to needs more quickly. When employees are out on leave or demand increases unexpectedly, employers need to make quick, informed decisions. With a complete view of your workforce, you’ll know whether it’s smarter to hire more employees, contract the work out or reassign existing workers. And if you determine that contingent workers are needed, you’ll be able to anticipate contract lengths with greater accuracy and identify exactly what types of skills you need most.
Make informed hiring decisions. Real-time visibility into your total workforce makes it easier to evaluate the cost and productivity of contingent workers in time to make nimble staffing decisions. Say your organisation has extended a six-month contract to a contingent worker and you need to determine whether you should hire him or her full time. With complete metrics, you’ll be able to see – even before the contract is over – if the decision to leverage contingent resources is working out as intended and whether bringing that individual on full time is a wise business decision.
Identify and deploy new best practices. A flexible, configurable workforce management solution allows you to monitor, compare and assess data generated by your total workforce, accelerating the discovery of new best practices and ensuring that those practices can be rapidly adopted across the organisation when applicable. Particularly when identifying best practices around achieving the right labour mix for your organisation, contingent worker data must be included in the calculation.
Considerations for achieving total workforce coverage
Not all systems are flexible enough to include contingent worker data. For complete coverage, look for a configurable solution that will allow you to:
- Include contingent workers in your scheduling platform. Your managers need immediate access to accurate availability data for their entire pool of workers – including contingent and temporary workers – in one unified system. If advanced functionality like automated call-out functions are enabled, current contact information for all contingent workers needs to be included, as well.
- Store skill and certification data. Your total workforce management solution needs to be able to store and track skills and certifications for all workers, so that the system can take those factors into consideration -without requiring managers to dig through paper records or call individual workers to inquire about certification standings.
- Enable activity based costing. The ability to evaluate and measure costs associated with various activities, workers and worker types will help managers and executives accurately assess the costs of specific projects and/or workers.
- Automatically deploy threshold notifications. A system that can automatically notify managers as they approach threshold limits or budget caps streamlines oversight and helps keep labour costs in check.
Using temporary and contingent workers can help you manage labour costs, reduce the impact of employee absence and prevent productivity losses without the costs associated with adding additional full-time employees. Yet, unless you include these workers in your total workforce management metrics, determining the effectiveness of their use is little more than speculation. Workforce technology that allows you to include contingent workers empowers your managers to treat them as true extension of your team, while also helping you determine the right labour mix via analysis and reporting.