It is intriguing to understand an organisation’s motivation and impetus to improve their Contingent Workforce recruitment and management. Many pundits are forecasting that the Contingent Workforce will represent 50% of the entire workforce.
I have observed many organisations improving their contingent workforce models over the last 6 years, and their reasons generally fall into two categories, “doors that are opening” and “doors that are closing”. The latter are always more powerful and shorter term as they tend to be burning platforms. The former tend to be more strategic and longer term.
Contingent Strategy Business Drivers
Ensuring compliance to legal and statuary obligations- as a result or prospective risks or actual risks in relation to payroll tax etc.
Reducing costs – this is always a great one for Recruitment and HR to achieve. This can be done by reducing margins, consolidating pay rates, and substitute contractors for statement of work consultants.
Ensuring compliance to OH&S – having different supply chains and management of your contingent workforce requires a cohesive approach to OH&S.
Increasing workforce productivity – reducing the time to productivity by reusing contractors and having a cohesive induction process ensures you get the most from your workforce.
Preserving organisational assets and ensuring compliance to licenses- these are important when the cost of assets given to your workforce is high and you need to ensure, from a compliance perspective, that your workforce has the right qualifications to undertake allocated work.
Where Do You Start?
Where you start your Contingent Workforce Project generally depends on what business drivers an organisation sees as important. It is also important to have a business case that can be quantified and reported over time so that you can show a progressive ROI (return on investment) to your stakeholders. This will justify further investment if required.
What ROI are you looking for?
If your organisation’s sole purpose is to reduce costs and ensure compliance to statutory obligations then this is most likely where your project will start and stop. This will generally be achieved within 12 months.
On the other hand, if you take a strategic view and believe that your strategy is about providing your organisation with competitive advantage as well as cost reduction and risk mitigation, then your ROI will be far greater. ‘
What does competitive advantage look like?
Competitive advantage in terms of your Contingent Workforce is generally the ability to:
- supply quality contingent staff in short time frames;
- win profitable projects using contingent resources, start fast and undertake them for less cost;
- acquire workforce agility – having a centralised view of your workforce, as well as terms that offer flexibility are powerful assets when the organisation needs to pivot;
- have a productive contingent workforce, where you are gaining full utilisation and a short time to productivity; and
- gain leverage from your contingent workforce to improve the productivity of your permanent workforce.
Think carefully about where you start your strategy in improving your Contingent Workforce. Where you start may be where you finish. This may mean your organisation may miss many benefits mentioned above.
I understand that you must satisfy key stakeholders and always build a stakeholder influence/impact and business driver grid so that we can ensure all needs are covered.
However, in many cases your stakeholders need their eyes opened, and you must create a Big Hairy Audacious Goal that goes past what your stakeholders envisioned. I always like the words of George Bernard Shaw “Some look at things that are, and ask why. I dream of things that never were and ask why not?
If you want to start improving the management of your Contingent Workforce, join us at the 4th annual Contingent Workforce Conference in Sydney on 22-23 September. You can find more information on the event, here.
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