The modern workplace has changed dramatically — along with the composition of today’s workforce. An increasing number of companies now rely on a mix of internal and external contributors to achieve business goals. In today’s ever-changing business environment, it’s necessary to increase flexibility by supplementing employees with temporary, project-focused talent. This contingent workforce often brings a depth of experience and diverse skills that are essential for business success.
The Challenge of a Blended Approach
A recent Deloitte-MIT study underscores the popularity of this approach, with 80% of leaders saying their organization’s success depends on external workers. Also, nearly 90% say it’s critical to understand how the contingent workforce adds business value. Yet, only 49% say they actually do.
There are many reasons for this gap, but primarily it comes down to the complexities of managing a blended team. For instance, applying the same productivity metrics to an employee versus a contractor can be difficult, and the results can be misleading. This is especially true when contingent workers are viewed as independent resources that operate outside of the organization.
This situation is further complicated by recent developments in the Joint-Employer Status rule from the National Labor Relations Board. Now, an entity may be considered a joint employer if it has an employment relationship with an individual. In addition, it must share or codetermine at least one of the terms and conditions of employment.
Given this change, many organizations hesitate to integrate contingent workers into their full-time workforce. However, proper implementation can help employers mitigate this risk, while helping them measure the productivity and value of outside talent. The solution is in the way organizations approach contingent workforce management and address critical misconceptions.
Addressing the Contingent Staffing Disconnect
The reliance on outside talent continues to grow, with companies filling anywhere from 30-50% of their roles with contractors. Still, the disconnect between contingent workers and employees still exists. Misconceptions are often to blame, some of which have been long-held.
Historically, contingent workers were typically hired to fill temporary absences or as an extra pair of hands to complete projects. That’s how many leaders continue to view these workers. But over the past decade, the skills they bring to an organization have changed dramatically.
Some contingent workers can now bridge almost any technical skill gap. Others can step-in to fulfill high-level strategic responsibilities, even taking on interim executive roles. It’s imperative for employers to understand the kind of versatility, adaptability, and innovation available through a strong contingent workforce program.
And now, as the battle for talent rages on, organizations can’t afford to simply sign-on contingent workers and forget about them. They must develop strategies to ensure that these temporary team members feel just as valued and integral to the organization as traditional employees. Otherwise, they won’t return to pursue future opportunities.
Smart employers embrace a more holistic approach by including temporary workers in internal training programs, team meetings, and events. Partnering with suppliers can ensure that your contingent workers are included in these activities. Think of it as another initiative to improve your organization’s overall workforce experience. And it’s an effective way to more fully leverage the strength of your contingent staff.
If your organization is struggling to manage contingent workers, solutions are available. An employer of record (EOR) or managed services provider (MSP) can help you navigate a variety of common issues. EORs and MSPs are well-versed in contingent workforce management. They use proven processes to source the right talent and provide operational visibility, so you can effectively manage budgets and control spending.
Making the Most of Your Contingent Workforce
Although this should go without saying, a contingent workforce program isn’t a set-it-and-forget endeavor. It’s important to put just as much time and effort into relationships with nonpermanent workers as traditional employees. And that’s true, even when relying on suppliers like EORs, MSPs, or staffing companies.
Focus on effective communication, so you can ensure that freelancers understand their responsibilities and remain aligned with your operational goals. It’s also beneficial to provide regular check-ins, performance evaluations that include feedback for workers or suppliers, as well as recognition programs.
Even though contingent workers contribute on a temporary basis, they’re still members of your team. Treating them in an inclusive way builds a foundation for ongoing engagement and loyalty. This can go a long way towards improving overall workforce productivity, creativity, and innovation.
In addition, when contingent workers report on their progress, it’s much easier to monitor and measure their performance against your organization’s standard metrics. It also helps reveal where you may need to invest in additional development and training.
This is especially critical when contingent workers are engaged on a short-term basis to scale up operations to meet growing market demands. Giving contingent workers an opportunity to upskill can help you accomplish strategic goals much faster. At the same time, it can do wonders for employee engagement.
More importantly, the time and effort you put into a contingent workforce program helps improve the overall work environment. Both internal and external employees will be happier and more collaborative. Plus, it attracts other potential employees, which decreases turnover and bolsters recruitment. Negative employee reviews are the last thing any company needs. They make it more difficult to attract new talent. And they may even turn potential customers.
A Final Note on Contingent Workforce Management
In today’s world, more companies are seeking the measurable business benefits of contingent workforce programs. But success depends on your ability to help these contributors feel included and manage them effectively. By treating contract-based staff as integral members of your team, your organization can operate more productively and respond more rapidly to fluid market dynamics. And ultimately, by offering thoughtful contingent workforce strategies, your organization can become a more attractive, engaging workplace for all.
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