Talent Management for Contingent Workers
“What if we train them and they leave? What if we don’t, and they stay?”
Contingent labour covers a substantial part of a company’s workforce and are key to the delivery of organisational outcomes. Yet, contingent workers are often excluded from important talent management solutions such as performance management, learning and reward. Truly reaping the benefits of relatively high contingent employment costs in terms of employee performance and engagement, means including them in your talent strategy and in appropriate talent management solutions.
Contingent labour in all segments of the workforce
The contingent workforce encompasses all workers with a non-permanent employment relationship. Traditionally the contingent workforce was defined by workers deployed to meet the seasonal needs of the business cycle. These are often low- or unskilled employees that perform blue-collar work with a relatively low impact on the value chain. Nowadays, organisations and employees alike are increasingly looking for greater flexibility. As a result, “flexible labour” now appears in all segments of the workforce, from operational workers to specialists and even strategic hires, meeting the fast-changing business needs and the new generation’s perception of work. Already 35-45% of employment relationships are on contingent basis, as research shows, covering up to 30% of an organisation’s procurement spend.
These statistics reflect the changing needs of both the employer as well as the employee. The “flex-” or “gig economy” - a network of people and organisations who cooperate without any formal employment agreement - has become reality in many industries. On the one hand, organisations are dealing with technological advancements and rapidly changing customer demands, increasing the need for agility and changing the type of capabilities they require. At the same time, millennials are joining the workforce, embarking upon longer careers in which continuous learning and career progression across different areas of expertise and industries are preferred over a permanent contract with one organisation. This means contingent workers are soon to be found anywhere in your organisation and are profoundly impacting the way your business is performing.
Exclusion from talent management solutions
For any organisation to reach its strategic goals and objectives, it is key to ensure that the workforce consists of the right capabilities and competencies. A robust talent strategy will ensure proper workforce segmentation, based on the impact on the strategic value and the scarcity of specific skills, driving the use of dedicated talent management solutions. Too often contingent workers are excluded from these considerations and as a result completely left out from the talent management solutions. Exclusion of contingent workers from talent management solutions such as onboarding may in fact result in half of your workforce not knowing nor practicing your company values while doing work for you. It might mean that your annual satisfaction survey and improvement initiatives based on its outcomes do not reflect a large part of your workforce’ level of satisfaction and engagement. And not offering the career perspective they desire, your critical contingent talent may leave for a more challenging assignment at another organisation – or worse, the competition – taking valuable knowledge and expertise with them and leaving you with a critical capability gap. As the percentage of contingent workers in organisations’ is growing, the business impact of excluding them from mainstream HR processes is also increasing.
Untapped opportunities for total talent management
Inclusion of non-permanent workers in talent management solutions is an untapped opportunity in managing a contingent workforce. Rather than treating them as a mere cost category, non-permanent workers should be part of an organisation’s talent strategy. They should be included in its workforce segmentation by determining their added value to strategic goals and objectives and the difficulty of replacing their skills and competencies. Using this input, contingent workers can be included in relevant talent management solutions along with permanent employees, or have solutions specifically designed for them. If you truly want to leverage the extra costs, your talent management solutions should be a catalyst for high performance, and that requires investment. Regardless of how long your contingent workers may stay with you, critical contingent talent should feel as engaged, supported and committed to ensure the return on investment of talent management for contingent labour.
Business impact of inclusion in talent management solutions
Think about the business impact of a contingent workforce that can be fully operational faster because they were included in your onboarding program or perform significantly better because they have access to training and coaching during their assignment. Or imagine incentivising contingent talent to outperform and deliver above expectations, and the impact this might have on their performance, loyalty and commitment towards your organisation. Like your permanent workers, contingent workers are – though temporarily – part of your organisation and its culture; they operate under your brand, serve your customers and work towards your organisations’ strategic goals and objectives. And should they happen to leave your organisation for a new assignment, you want them to be an ambassador for your employer brand and your network of partners and maybe one day return for a new project.
Ultimately, leveraging your contingent workforce is about creating a contingent worker experience that is fit for purpose. Not all types of contingent labour require the same level of HR involvement, but it is key for any strategic HR department to start including contingent labour in their talent strategy and to assess the potential impact of specific talent management solutions on the efficiency and effectiveness of contingent labour.
1. Ardent partners, the state of contingent workforce management 2014-2015 & 2015-2016
2. “HR Functional Perspectives: The Contingent Workforce”, Deloitte Press
3. Deloitte Global Human Capital Trends report 2016 & 2017
4. Deloitte Global Human Capital Trends report 2017 (Chapter Careers and Learning)