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Hiring Outsourced Labor? Here’s How to Maximize ROI

In a world filled with uncertainty, one thing is certain. “Business as usual” is no longer a realistic strategy. So, during unusual times like this, is it wise for companies to continue hiring? Many employers say yes. But others are turning to creative alternatives like outsourced labor. Here’s why:

Despite lower inflation and a temporary pause in lending rate hikes, the U.S. economy remains shaky. Some experts still say a recession is likely. Yet even though job growth has recently gained some steam, layoffs continue to spook employees — especially in the tech sector. And who can blame them? After all, technology companies have laid off nearly 211,000 people this year. At the same time, the number of open tech jobs has plunged from a high of 477,000 last August to only 168,000 this month. Chilling.

Even so, employers continue to grapple with the country’s ongoing labor shortage. In May, the unemployment rate remained low at 3.7% (about 6 million people), while job openings inched up to 10.1 million. In other words, many more jobs are available than today’s unemployed Americans can fill.

All these variables are making workforce planning especially difficult. So, rather than debating whether to downsize or expand your workforce — why not consider doing both? This strategy may seem counterintuitive. But it actually lets you retain valued employees while hiring talented candidates who want more work stability.

Of course, for this to succeed, your company’s reputation, benefits, and culture must be top-notch. U.S. employees are interested in organizations with a vibrant work culture backed by strong core values. In fact, 75% of employees say it’s “very important” to work for a company with well-defined values. And almost 20% of employees consider it the most important factor for job satisfaction.

If your company neglects these things, you could lose current employees. What’s more, attracting strong new talent will be much more difficult. For ideas about how to make the most of this strategy, keep reading…

How to Hire Quality Talent Amid Labor Shortages

When hiring, prioritize quality over quantity. The importance of hiring the right people can’t be overstated. It may feel good to receive hundreds of applications for an open position, but it won’t necessarily make things easier. If only a few applicants are qualified, you’ll need to spend many more hours of review and deliberation to find them. This unnecessary effort only makes your hiring process less efficient. 

If you choose to hire full-time employees, seek out candidates who have worked at startups or other scrappy environments. This kind of work experience suggests that a candidate is resilient, resourceful, and comfortable wearing multiple hats. 

Alternatively, consider hiring contingent workers. Because outsourced labor is ubiquitous and inexpensive, this is an attractive solution during talent shortages. Outsourced workers can focus on repetitive, easy-to-learn tasks so your full-time, in-house employees can spend their time on more strategic activities. This increases organizational efficiency and effectiveness. It also enhances the employee experience, which should improve workforce retention.

It’s also worth keeping in mind that the current labor shortage is expected to persist. If so, employee hiring and retention challenges are likely to continue. As a result, many companies could turn to outsourced staffing as a long-term solution. That’s a compelling reason to put successful outsourcing practices in place from the start.

5 Ways to Boost Workforce Performance With Outsourced Labor

Keep in mind that managing outsourced labor differs from managing in-house staff. To make the most of your outsourced workforce, try these tactics:

1. Invest in Structure and Quality Control

Designate one or several points of contact to manage outsourced labor roles, responsibilities, check-ins, and quality standards. This creates structure, which in turn prevents confusion, missteps, and other problems. It ensures that your contingent team members are aligned with your organization’s objectives and functional needs. Plus, it encourages two-way communication that helps minimize disengagement, quiet quitting, and excessive turnover.

2. Schedule Regular Check-Ins

Touching base with outsourced staff and outsourcing partners helps maintain accountability, transparency, and trust. By conducting weekly or biweekly check-ins, you can identify and address issues more quickly and keep the relationship moving forward smoothly.

I’ve seen several clients hire and onboard outsourced staff, and then treat it as a “set and forget” business arrangement. Soon, expectations became unclear, and clients didn’t get what they needed. Keeping in touch with contingent employees is vital to be sure everyone stays on the same page.

3. Don’t Overlook Onboarding and Training

An effective onboarding and training plan sets up outsourced workers for success. By providing the information, resources, guidance, and support needed to perform well alongside in-house employees, you can optimize the business value of contingent staff.

Unfortunately at many companies, onboarding is lackluster — even for in-house hires. In fact, according to Gallup, only 12% of employees think their organization does a great job of onboarding new people. With so much room for improvement, effective onboarding is likely to become a key trend in the future of outsourcing.

In my experience, new hires don’t start strong without complete information and training. They’re less likely to understand their role, and often they’re unsure where to go for answers when questions arise. This can lead to unnecessary mistakes.

However, when organizations plan and deliver thoughtful onboarding, they’re rewarded with motivated people who feel empowered to hit the ground running. So taking time to onboard both in-house and outsourced staff can quickly boost your team’s overall efficiency, productivity, and effectiveness.

4. Watch for Hidden Costs

An outsourced labor strategy is often a budget-friendly move. However, hidden costs can potentially erode any financial advantages. For example, you’ll want to pay close attention to the cost of communication and coordination with outsourced workers, as well as the cost of compliance with local labor laws and regulations.

When selecting an outsourcing provider, choose one that is transparent about prices. Also, look for a provider that adds value with payroll, human resources, and compliance services. This reduces management complexity for your organization and minimizes unexpected additional expenses.

5. Protect Against Security Risks

Unfortunately, data security risks are a modern business reality — especially when you rely on outsourced labor. Of course, some security breaches are unintentional. This is where proper upfront training can build awareness and help staff protect sensitive data and systems.

Regardless, intentional threats still exist. Although your trust in contingent staff will naturally increase over time, proactively protecting your business is mission critical. Some of my clients have experienced security breaches because they shared a little too much data and information before new hires settled into their roles. You don’t want that to happen.

To minimize exposure, carefully review outsourcing provider agreements for indemnification clauses that protect you in the event of a security breach. Also, your organization should use password-sharing tools that make it easy to detect and lock out workers who pose a threat.

A Final Note on Outsourced Labor

For most organizations, business uncertainty and talent shortages continue to play havoc with workforce planning. In this environment, it’s critical to determine how your organization can operate effectively and efficiently, no matter what. Hiring the right people is essential. But if you’re reducing headcount or slowing your hiring rate, outsourced labor is an attractive alternative. Relying on contingent staff to augment your in-house team can help you cut expenses and improve business efficiency without compromising core functions. And when managed well, this solution can help your organization effectively weather today’s economic challenges.

HR Generalists: Tricks of the Trade #TChat Recap

Recruiting and hiring.
Compensation and benefits.
Organizational design and development.
Compliance and employee relations.
Training and performance management.
Change management and internal communications.
The list goes on…

In today’s world of work, the areas of expertise that define HR are varied and complex. Yet, most companies are too small to employ a dedicated staff of specialists. It forces the question:

In an era of increasing specialization, how can one person successfully run an entire human resource department?

Of course, this isn’t just an academic exercise. For many HR professionals, nonstop multitasking now seems to be a way of life. Recent research by The Society For Human Resource Management suggests that there’s a widespread need to support small HR shops. According to SHRM, a majority of its 275,000 members represent HR departments of 1-5 people. They know what it means to juggle many demands on a daily basis. But how can they perform effectively?

That’s the issue our talent-minded community tackled this week at #TChat Events, where two  “in-the-trenches” HR veterans led the discussion:

Dave Ryan, SPHR, Director of Human Resources at Mel-O-Cream Donuts, and
Donna Rogers,
SPHR, owner of Rogers HR Consulting, and management instructor at University of Illinois Springfield.

(Note: For details, see the highlights slideshow and resource links at the end of this post.)

Context: How Essential Is HR, Itself?

Recently, a debate has been brewing about the value of HR departments, overall. Bernard Marr questioned the need for an HR function, while Josh Bersin championed its role. Bersin emphasizes the fact that, despite a tremendous need to reskill and transform the HR function, human resources professionals help solve some of today’s most fundamental business problems. Top executives recognize the strategic role that talent plays in organizational success, and HR professionals are best equipped to define, shape and implement those strategies.

But how does that apply to solo HR managers, who may be living in a perpetually reactive zone? Ben Eubanks describes the best one-person HR departments as leaders with entrepreneurial traits:

We don’t pick up the phone and call our corporate HR team. We ARE the corporate HR team.
We are comfortable with research and making judgment calls.
We constantly seek out opportunities for professional development — if you’re not growing you’re dying.

Comments From the TalentCulture Crowd

Because many #TChat-ters understand the challenges that multi-tasking HR generalists face each day, the vast majority of Twitter chat participants sang the praises of one-person shops. In addition, many offered thoughtful advice. For example:

As the #TChat discussion demonstrates, solo managers don’t need to wait for industry events to connect with smart advice. Social tools make it easy to create a network of virtual resources to assist when you need it. Do you have a question about an unfamiliar subject? Tweet it with a relevant hashtag. (Try #TChat!) Post it to a LinkedIn HR discussion group. I guarantee you’ll get responses, faster than you expect.

Social tools also are useful for communication within your organization. Intranets are a great way to enable collaboration and communication at a relatively low cost. Cloud-based tools are available for internal discussions, project management, and reporting. Hiring systems and performance management solutions also offer social integration without steep IT costs. The possibilities are limited only by the time and interest HR managers invest in professional networking and research.

Above All: Aim for Agility

It seems that, of all skills needed for one-person HR superheroes, the most important is agility. Put aside the notion that you can execute perfectly, across-the-board. Prioritize carefully. Then, with the time and budget available to you, apply tools and resources as efficiently as your able, while making it all seem effortless.

Scared? Don’t be. If you’re reading this, you know that a worldwide community of like-minded people is right here to support you. We’ve got your back!

#TChat Week-In-Review: HR Departments of One

Donna Rogers and Dave Ryan

Watch the hangouts in the #TChat Preview

SAT 11/30:

#TChat Preview:
TalentCulture Community Manager, Tim McDonald, framed this week’s topic in a  post featuring #TChat hangout videos with guests Dave Ryan and Donna Rogers. Read: “HR: How to Succeed at Flying Solo.”

SUN 12/1:

Forbes.com Post: TalentCulture CEO, Meghan M. Biro looked at 7 ways leaders can foster a high-octane social workplace culture. Read: “Top 5 Reasons HR Is On The Move.”

MON 12/2:

Related Post: Guest Donna Rogers shared wisdom from her experiences. Read “Survival Tips for HR Departments of One.

WED 12/4:

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Listen to the #TChat Radio recording

#TChat Radio: Our hosts, Meghan M. Biro and Kevin W. Grossman spoke with guests Dave Ryan and Donna Rogers, about the challenges and rewards of operating as a one-person HR department. Listen to the radio recording now!

#TChat Twitter: Immediately following the radio show, Meghan, Kevin, Dave and Donna joined the TalentCulture community on the #TChat Twitter stream, as I moderated an open conversation that centered on 5 related questions. For highlights, see the Storify slideshow below:

#TChat Insights: HR Departments of One

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Closing Notes & What’s Ahead

GRATITUDE: Thanks again to Dave Ryan and Donna Rogers for sharing your perspectives on HR management. We value your time and expertise!

NOTE TO BLOGGERS: Did this week’s events prompt you to write about how HR professionals can operate “lean”? We welcome your thoughts. Post a link on Twitter (include #TChat or @TalentCulture), or insert a comment below, and we’ll pass it along.

WHAT’S AHEAD: Next week, #TChat looks at the latest Candidate Experience trends and best practices with guest experts, Elaine Orler and Gerry Crispin! Look for more details this weekend.

Meanwhile, the World of Work conversation continues. So join us on the #TChat Twitter stream,  our LinkedIn discussion group. or elsewhere on social media. The lights are always on here at TalentCulture, and we look forward to hearing from you.

See you on the stream!

Image Credit: Stock.xchng

HR: How to Succeed at Flying Solo #TChat Preview

(Editor’s Note: Are you looking for a full recap of this week’s events and resources? Read the #TChat Recap: “HR Generalists: Tricks of the Trade.“)

“I am not a product of my circumstances. I am a product of my decisions.”
–Stephen Covey

Are you an “HR department of one”? If so, you’re not alone.

Statistics suggest that there’s a legion of U.S. small company practitioners who function as all-in-one HR virtuosos.

The Bureau of National Affairs says that the median HR-to-employee ratio remains fairly stable, at 1.1 HR practitioners for every 100 workers. And according to the SBA, more than 98% of firms employ less than 150 employees. No wonder the Society of Human Resources Management  (SHRM) reports that most of its 275,000 members are from departments of 1-5.

Making It Work

With so many solo HR managers in today’s world of work, it’s important to understand how successful practitioners serve their organizations across all specialties. What practices promote effectiveness and efficiency, despite limited bandwidth? How should you prioritize your efforts? That’s the topic we’ll explore this week with two experts who know how to make it work:

Dave Ryan, SPHR, Director of Human Resources at Mel-O-Cream Donuts, and
Donna Rogers,
SPHR, instructor of management at University of Illinois Springfield, and owner of Rogers HR Consulting.

Dave helped set the stage by briefly explaining what it means to wear many HR hats:

And Donna offered her perspective as an experienced HR consultant and teacher:

What’s your advice for HR colleagues who need to do more with less? This is a topic that affects all of us, directly or indirectly. So bring your tips, questions and opinions — and join this week’s #TChat conversation!

#TChat Events: The HR Department of One

#TChat Radio — Wed, Dec 4 — 6:30pmET / 3:30pmPT

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Tune-in to the #TChat Radio show

Our hosts, Meghan M. Biro and Kevin W. Grossman talk with Donna Rogers and Dave Ryan about how to ensure that HR remains effective, even in small company environments. Tune-in LIVE online this Wednesday!

#TChat Twitter — Wed, Dec 4 7pmET / 4pmPT

Immediately following the radio show, our discussion moves to the #TChat Twitter stream, where Dr. Nancy Rubin will moderate an open chat with the entire TalentCulture community. Everyone with a Twitter account is invited to participate, as we address these questions:

Q1: What’s the first thing a one-person HR shop should do and why?
Q2: How should an HR pro organize and scale for all talent activities?
Q3: How should HR pros and business owners partner in small companies?
Q4: What other resources should one-person HR shops consider utilizing?
Q5: What technologies help keep one-person HR shops productive?

We look forward to hearing gathering helpful wisdom from the crowd — so bring your best HR management advice, and let’s talk!

Throughout the week, we’ll keep the discussion going on the #TChat Twitter feed and on our LinkedIn Discussion Group. So please join us share your questions, ideas and opinions.
We’ll see you on the stream!