What is happening today?
- Everything from changing social norms, workforce needs and the way companies are doing business are affecting the nature of employment.
- More work is project based and relies heavily on technical skill sets. Businesses and workers need to know how to adapt to a rapidly changing environment.
Why it’s important
- Staying competitive is important and keeping up with the changing workforce.
- Workers need to know how to prepare for the a more flexible, project-based working environment to sustain their careers.
What should you do about it?
- Utilize the contingent workforce.
- Businesses can benefit from employing contingent workforce.
Implementing a contingent workforce over the past decade has become the norm, and more so today as rising labor costs and adapting to the rapidly changing structural shift that has occurred in the marketplace.
The year over year growth in the size and cost of the contingent workforce has caused a few rippling effects. First, it’s causing a shortage of workers to fill critical skill sets. Second, it is understanding what skills and services contingent workers need and helping managers make applicable/accurate based decisions on whether to fill a role or skill with a contingent worker or full-time employee. The third rippling effect is the complex change that is constant, and competition is coming from everywhere. The pace at which companies conduct business is speeding up and that includes technology to support those changes. Since most of the required needs are project-based, it’s costly and ineffective to retain the required skill set in-house. Most companies are turning to the contingent workforce.
Today, one-third of the US workforce is made up of Baby Boomers, and they are starting to retire, causing a gap in critical skills. To fill this gap, companies are turning to the contingent workforce for a few reasons; Responsiveness, Flexibility and most of all the Operational cost of the enterprise. The estimated spend by procurement is 30 percent of contingent workers. Business leaders have had to respond to the structural shift in the marketplace. The Structural change has left business leaders responding to new ideas and business strategies to account for diminished margins.
The barrier most companies face is comprehending what skill sets and services contingent workers supply and providing administrators with the tools to fill a role or skill need with a contingent work or a full-time employee. Even though the contingent workforce segment is expanding insignificance and its size, many businesses may not be skilled at balancing it. Significant concerns include the lack of an integrated workforce management approach, managing behavior, weak data management, and substandard technology. Such imperfections can expose companies to immense business, financial, and public relations threats. Furthermore, the insufficiency of an integrated solution across these parts can inhibit an organization’s capability to make choices about what type of talent to deploy where.
As more organizations see the issues pertinent to contractors and administration, they can benefit from enhanced overall performance, lower labor costs, informed staffing decisions, more organizational flexibility, and stronger HR alignment with business goals and objectives. A focus in this area will provide the potential to find and acquire contingent workforce expertise that is high-quality, and aligned to the specific business needs. Providing the organization the capacity to source and secure contingent workforce talent that is high-quality, aligned to the specific business needs, and available “on-demand” to meet prompt talent needs. Administrators can make practical talent choices at the time of need, and the procedures and systems are in place to maintain and mitigate the risk of the contingent worker and help administration across the worker lifecycle.