In May 2013 a group of business leaders, industry commentators and academics attended a forum discussing the challenges associated with a “blended workforce”, one that relies on a mix of permanent employees and flexible staff such as contractors, temps and consultants. This article by forum host, Matthew Franceschini, CEO of Entity Solutions, discusses a range of factors that need to be addressed when implementing a blended workforce approach, to ensure best outcomes for the organisation.
If there is one benefit that can at least in part be attributed to the skills shortage of the past decade, it is the widespread acknowledgement of the importance of talent to an organisation. Where once employees were largely considered from the perspective of headcount, there is now far more focus on who those individuals are and on the skills and experience they bring to their roles.
Talent has entered the HR vernacular. The difficulty of finding the right skills, along with increased business competition has given talent value. Organisations understand that with the right talent and the right mix of talent, they can obtain competitive advantage. This has led to good talent – wherever it may exist – being in high demand. This is evident in the growing number of organisations willing to look internationally for highly specific expertise and skill sets.
Not surprisingly given the market for skills, talent has also become transient. People don't tend to stay in one spot for long.
The case for blending
Despite the focus on talent, no organisation can afford to simply amass talent without the rigor to contain cost. The pressure to reduce costs coupled with an organisation’s obligation to increase productivity has become a constant in business, particularly in light of the global economic situation of the past five years.
Therefore, businesses are looking for more flexibility in their talent engagement models. Rather than setting head counts at the highest level to cope with peak business periods, organisations are turning to blended workforces that combine permanent employees with the supplementary support of independent professionals such as contractors, temporary staff and consultants. These flexible resources are brought in as changing business conditions dictate, such as during busy sales or production periods, or when new skills are required for a particular project.
A key requirement for blended workforce success is to take an integrated, holistic approach, tapping into permanent and contingent talent in a way that ensures a seamless pathway for the project and the organisation. There must be flexibility of engagement while ensuring governance and visibility of spend.
The blended workforce must also meet the driving need of cost reduction, or at a minimum, cost containment. Ideally you want to create a dynamic of cooperation between permanent and contingent workers, one that leads to greater productivity. Your workforce then should be managed in a way that ensures logistical ease when connecting people to projects.
The talent supply chain
This quest for logistical ease is essentially a question of managing the talent supply chain. It involves connecting a person to a position or project, embracing each step from procurement to the pay life cycle. When working smoothly, the supply chain ensures that organisations find, attract, manage, pay and add value that delivers a point of difference and competitive advantage to the organisation, and to the acquired talent.
There are three distinct phases that comprise the supply chain. These are:
Pre-engagement (also known as the acquisition phase) starts with the sourcing and acquisition of talent. Whether looking for a permanent employee or a member of the contingent workforce, an organisation should simply want the best talent available for the role. The right people need to be found and delivered with urgency, ease and containment of cost.
This isn't always straightforward, especially when dealing with a global talent pool. For instance, an organisation must be nimble enough to find that rare subsea engineer in the Oil and Gas hub of Aberdeen, Scotland, where these skills are prevalent, and connect that person to a project in the North West shelf of Australia. This entails a search and selection component, a migration component and a mobility component. All of these events need to be connected.
Now try repeating this 10, 20, 100 or maybe 200 times per year, for each and every position the organisation needs to fill. This is where a defined process helps. Consider:
In its Analyst Insight report, “Driving a Blended Workforce Strategy: a Total Talent Approach”, leading industry research organisation, Aberdeen Group, suggests HR could find it beneficial to involve the procurement or purchasing department when dealing with contractual arrangements and statements of work for contingent workers. As the report notes, purchasing is well-versed in contract management and is likely to have broad experience working with suppliers on milestones and delivery dates.
Having found your talented people during pre-engagement, you now need to get down to the business of working with them. The engagement phase is when risk mitigation comes into play and during this time the workforce needs to be engaged and managed within a regulatory framework that can often be complex and an inhibitor for business.
The engagement process is a specialist area. Whether you take on employees, independent contractors, professionals with an ABN, or individuals on a visa-based engagement, they need to be correctly and seamlessly administered.
The process demands an understanding of the contingent worker DNA. These workers demand flexibility, maximum income, and to be treated with a respect that both acknowledges and augments their professional and lifestyle requirements.
On an ongoing basis, organisations will need to constantly work hard to attract, retain and remunerate their workforce. Every organisation wants to be the workplace of choice among its peers. However, organisations need to develop their own value proposition and create a point of difference to attract and retain the best talent. At the same time, management will need to seriously consider how they can become the workplace of choice for all workers, whether, permanent or contingent.
Increasingly, technology will be a critical element in supporting rapid engagement and if deployed successfully can boost productivity through process efficiency in meeting the changing needs of both the organisation and its workforce.
However, visibility of spend will also remain essential throughout the engagement process.
3. Post engagement
Post-engagement, once the pre-engagement and engagement phases have connected a person to a position or project, focuses on talent management. This is when the organisation needs the surety of uninterrupted business.
Good analytics and reporting become important for monitoring performance. Management needs visibility across the entire workforce – both contingent and permanent – to ensure thorough and effective workforce planning.
The organisation also needs to develop best practices to deal with workforce challenges that extend to areas such as:
Each of these three phases functions in tandem over a long period of time. All should be viewed collectively and their impact on subsequent phases understood. This is where a formal strategy and input from across the business can help. Technology is another important enabler. Each phase should be connected elegantly using workforce solutions to deliver best reach, best talent, best process and best outcomes for all in the supply chain.
While the idea of a blended workforce heralds significant change for many organisations, it is an approach ideally suited to our current competitive and uncertain times. The business case for using contingent and permanent employees is well documented. With holistic management and a keen view to the entire supply chain, a blended workforce will readily deliver cost, flexibility and agility benefits for the business.
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