Managing your contingent workforce

Written by
Changeboard Team

29 May 2013

29 May 2013 • by Changeboard Team

Recruiting your contingent workforce

With the growth of the temporary staffing market, it’s now more important than ever to make sure that you truly have your arms around the contingent population – in terms of recruitment, management and policies. With this in mind, a more strategic approach needs to be adopted to help reduce company costs and mitigate the risk when employing contingent workers.

Many organisations opt for a Master Vendor (MV) for managing their full end-to-end contingent recruitment process. There are various benefits of doing so, such as the continuity and efficiency of the model from a management and tracking perspective. Martin Wiles (Head of Contingent Resourcing) explains the success Thales has had with enlisting a MV: “Doing this in 2009 has resulted in significant cost savings for the business and improved our time to hire and direct hire percentage. In 2012, 90% of our contingent roles were sourced directly by our MV within 22 days”.

When operating such a model, your MV receives all job orders and manages the process respectively. If for any reason your MV can’t fill a position, the role is passed down to their second tier suppliers where they still remain in control of the process. Make sure you enforce strict consequences for hiring managers who deviate from the process – anomalies in your contingent management system mean that processes you implement will be inaccurate and counter productive!

Vendor Management systems

Over the last 10 years we have seen the rise of Vendor Management Systems (VMS), an evolution of the MV model, assisting with the management and procurement of temporary staff. Stuart Rowland (Interim Talent Acquisition Director) notes that “Contingent Resourcing is one of the high-priority groups for any business. Get it right, and the business gets a competitive advantage; being able to recruit business-critical scarce skills in a timely and efficient manner.

As the size and complexity of managing the contingent resourcing piece grows, one growing solution being incorporated into talent acquisition functions is through an end-to-end Vendor Managed service. It's a highly specialist area and it demands highly specialist and innovative providers.

A VMS can provide a solution to some of the big headaches associated with contingent resourcing on a large scale: having a dedicated team (onsite or offsite) for the business to call with any requirement, simplicity of invoicing and finance, reporting, metrics and above all, the ability to innovate in building pools of talent around repeat business needs."

Converting contractors to permanent staff

After battling a fairly static market during the recession, recruitment seems to be bouncing back and has grown by a reported 4.3%. Mark Barnicoat, (Managing Director and Head of Interim Recruitment at Oasis HR) comments on the changing face of the workforce and notes that: “whilst we are experiencing a thaw in the market, I am not surprised to learn that the permanent market has seen a reduction of 8.9%. This is compared to the temporary staffing market which has increased by 5.4% and has resulted in us having to invest substantially more in the interim side of our business to cater to this demand”. (Statistics from the REC, 2012).

Much of this increase is attributed to contracting professionals’ reluctance to convert to permanent employment, workers placing less importance on job security and finally, many businesses can’t currently commit to permanent staff. However, from a monetary perspective it doesn’t always make financial sense to renew contingent workers’ contracts when the most practical solution is to employ the individual on a permanent basis.

It’s critical to develop a system which helps you systematically decide whether it makes business sense to present a vacancy as permanent or contract opportunity. This methodology also applies when deciding to convert a contractor to a permanent member of staff. Weigh up items like the interim’s length of tenure, role criticality and the availability of skills to help you reach a decision. This type of process should prompt managers to justify their reasoning for continuing to renew contracts based on the previously stated criteria.

Many businesses are in the early stages of putting in place the infrastructure to effectively manage their contingent workers, and it is crucial that the business leaders have bought into its importance. The statistics are there to highlight how rapidly the temporary staffing market is growing, so if you have a large contractor population slightly outside your grasp… it’s time to wrap your arms around it!