Cost savings is one of the major benefits for organizations that hire contingent workers. Organizations save on administrative costs associated with hiring and maintaining full-time employees. Peter Hamilton, Vice President and Managing Director, APAC, at KellyOCG is here to candidly showcase a deeper insight onto this issue with BW Businessworld journalist.
1. Can you elaborate on who exactly are contingent workers and the advantages and disadvantages associated with their hiring?
Contingent workers are freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a project basis. They can work on site or remotely. They are highly skilled experts in their fields. These workers are hired to complete specified tasks under a statement of work provision. They add value to your current work strategy. As per the KellyOCG Workforce Report 2022, leading organizations also known as “Vanguards” are 15% more likely to use contingent talent to improve workforce agility, suggesting a link between the use of contingent talent and higher employee productivity and wellbeing.
This has many advantages. A contingent workforce enhances business agility by allowing a company to adapt to ever-changing circumstances. Companies can access the contingent talent to meet expanding business needs or fill skills gaps that may not be available in the permanent workforce. Besides, contingent resources can provide that fresh pair of eyes and perspectives, opening doors to new and diverse viewpoints that can benefit a firm.
Talking about the disadvantages, the hiring process for contingent workforce could often be overlooked or compromised, thus leading to compliance challenges. In addition, the Human Resource Information System (HRIS) for managing permanent workforce is usually not extended or used for contingent resources, leading to a lack of spend visibility for this category of labor. However, these challenges can be easily overcome by partnering with a Managed Service Provider (MSP), giving organizations the opportunity to have in place an effective total talent strategy.
2. Is there an ideal process to manage the contingent workforce and how many important policies have been put into effect for them?
There is no particular “ideal process” as such to manage the contingent workforce, but yes, certain outlines could be implemented to ensure smooth functioning. The most important thing is clear communication with the contingent workforce; they have to be on the same page as the permanent employees to make them feel included. In terms of the working relationship, both the firm and the contingent worker will have expectations. Compensation, deliverables, contract length, and additional benefits are among them. Expectations should be reasonable and attainable in order to ensure that your employees succeed.
We don’t see any standard process implemented across India program, as it varies from client to client. Apart from a couple of policies like insurance and liabilities.
3. What are the barriers to contingent workforce management success and how do we overcome them?
Some barriers for existing business include:
1. Contract Tenure Limit – which can be recognized, depends on client requirement.
2. Mindset towards candidates looking at contract staffing in India (Prefers full time employment against contract)
The biggest hurdle is the mindset towards candidates looking at contract staffing. That needs to change in order to make contingent job opportunities more attractive. Besides this, the organization should avoid bias, discrimination, or alienation of the workforce through adequate training and education of employees to collaborate with their co-contingent workers. Inclusive practices and well-communicated project targets and goals for all employees, permanent and contingent, will result in a stronger bond and better collaborative efforts to meet business goals and objectives.
4. Post-pandemic, how do organizations foresee hiring and sustaining of contingent workforce? Is there a strategic plan in place for that?
Organizations must rethink workforce strategy and management as the pandemic resets important work patterns. According to the report, 34% of organizations said the greatest barriers to having talent required to grow their business is the lack of skills that they need in the market. In India, 48% of organizations plan to increase the use of contingent talent by at least 25% over the next five years.
It is critical to know the business growth needs and the talent and skills needed to fuel that growth. Having a good understanding of the talent available in the market and having a clear plan to attract and engage the contingent labor to fill those gaps skills is important. Organizations that are only starting that journey can seek advice or partner external MSP consultants and experts to ensure they can access this category of labor and a hiring process that is compliant to the organization’s hiring policy and process.
Having a well-established SME program in place, organizations will have good visibility of their contingent talent, reducing compliance risks and being able to make informed talent decisions to benefit the business.
5. Will companies in the near future develop an articulated strategy for the use of contingent talent?
As the freelance economy grows, more businesses are recognizing their strategies to accommodate the changing nature of labor. We’ll see a shift toward an increasingly large and integral contingent workforce. It’s no longer enough to have a few contractors for special projects or to think about temporary workers only in terms of seasonal rushes; we’ll see a shift toward an increasingly large and integral contingent workforce.
One of the most significant impediments to engaging contingent labor, according to our clients, is the organization’s policies and guidelines for the hiring and management of contract workers. That’s why bringing HR and Procurement together collaborate the purchase and management of contingent talent important. Consulting with external talent specialists can also be beneficial in identifying ways to more effectively attract, hire and manage contingent talent. From the report, 30% of India organizations are looking into outsourcing their contingent workforce management to a specialist provider, higher than the Asia average of 26%.
6. What are the tools and technologies that could be adapted to successfully develop a contingent workforce?
Organizations are increasingly turning to technologies like vendor management systems (VMS), which are designed to manage external vendors, and statement of work relationships.
Leaders can more readily evaluate labor costs, worker availability, or skill sets throughout their workforce with the help of an MSP program in place, ensuring they put the right talent where it’s most needed, elevating contingent workers from just-in-time workers to more strategic ones. Some platforms can also automate aspects of onboarding and performance monitoring for freelance personnel, as well as expedite invoicing and billing for contingent workers.