How to solve business performance using the flexible talent pool

The profession of managing the contingent workforce has emerged as a new trend following the pandemic

June 19, 2024

People in the business of procuring talent started out in an industry that managed non-employee contingent work and was full of procurement directors, HR generalists, and even office managers looking to dip their toes into sourcing freelancers.

However, the profession of managing the contingent workforce has emerged as a new trend following the pandemic, and the industry has changed; what we see happening now is a stark difference to even 10-years-ago.

Dive in as we look at process enhancements, contingent workforce operations, human resources (HR) labor strategies, and access to diverse talent featuring Worksomes' own Sam Orrin - Global Director of Business Development, and Bryan Peña - Founder of Defiant Solutions LLC.

‘Contingent workforce’ as a catch-all term? Is it not so contingent anymore?

"As more companies recognize that this particular category of talent comes with a whole host of challenges and opportunities, the increased professionalization of the role of a contingent workforce manager is evolving. That's going to drive a lot of innovation in the future," says Peña.

Clients' expectations and the solutions they seek should become more advanced to accommodate more sophisticated ideas around what it takes to succeed. This notion incites an interesting trend but has also created many challenges for traditional suppliers in the ecosystem.

What are the most prominent themes and trends in the world of work today?

Peña's work is primarily with enterprises, HR tech, talent platforms, and marketplaces on how to develop next-generation solutions that match the evolving demands of clients. "I think some of the bigger trends are a reassessment, and a re-examination of the traditional paradigm and model of managed service providers (MSP's), or vendor management solutions (VMS), as kind of being the catch-all," states Peña.

There is a hunger for mechanisms to engage people more creatively than traditional agency spend. So a huge opportunity presents itself in being able to present something new to an industry in need of innovation.

The consistent complaint remains that MSP and VMS partners are looking for strategic direction, with events spotlighting their limitations over the last few years. We know that the traditional approaches of outdated MSP and VMS companies neglect to leverage human capital and have seemingly rejected an openness to look at non-traditional forms of engagement.

Tools like Worksome are bridging the gap to help incorporate management tools into holistic enterprise-right strategies. "I hesitate to use the word "total talent management," but I think we're looking at shades of a much more holistic approach to how they manage people," says Peña.

Think of the rise of remote work as a perfectly viable way to get something done. It naturally stands to reason that you'll consider non-traditional contingent workers as a solution within your HR strategy if you understand the benefits of embracing it.

Remote workers are changing how we engage with talent and non-employees

If you don't technically need freelancers in your office, do you need them in your city, state, or time zone? Why hire an in-office, full-time role if you don't need someone in the office? The logical answer to this question can create a golden opportunity for practitioners in the industry who can benefit from the value of an extended labor strategy.

Recently, when Orrin attended the Staffing Industry Analyst (SIA) contingent workforce summit, he learned that "it's so clear, now more than ever, that there is no silver bullet, is there? There is no global solution. Like, a decade ago, you'd lump it onto an MSP, and they'd probably be able to do a relatively fair job of it." Nowadays, this is not the case, and the need for tools like Worksome has emerged as an urgent solution.

We must recognize that most contingent workforce programs originated within a procurement function. The procurement manager's initial value proposition for a program was essentially to bring order to chaos, handle risk mitigation, provide contractual protections, and initiate cost savings.

Honestly, most programs in the 1990s were heavily predicated on supplier management and control, harmonizing contracts, removing process inefficiencies, and minimizing enterprise risks. As programs evolve and these problems get solved, usually after three years or so, what's next?

"As companies solve these initial problems and capture the initial savings, then there needs to be something else that drives value for the organization."
- Bryan Peña, founder of Defiant Solutions LLC.

Peña witnessed how MSPs flourished in the cost savings and process efficiency model. A lot of contracts and solutions were deployed with a strong focus on cost savings and process efficiency only. "As you do that, and achieve those goals, the expectations of the (client) gets more advanced and more robust… Now we're moving into an era where the universe of tools is getting much more robust, and the magnitude of the problems that most companies are addressing using non-traditional labor are that much greater," says Peña.

MSP's are being forced to change their value chain.

Orrin agrees that "the world has fundamentally changed, especially with the covid outbreak. If you look at technology, the rise of smartphones and consumer apps has completely changed the expectations of how processes should be handled."

What is an example of how a contingent workforce program can change to keep up with this trend?

The number one metric Peña evaluates relative to the success of a contingent workforce program is based on adoption.

What percentage of the eligible population uses the program or process flows the way you designed them to be used?  

"When we think about what that future looks like, we focus on maximizing adoption and compliance within the category of spend that you're exploiting," adds Peña

Programs that will be successful in the future move well beyond discreet agency management solutions and move toward incorporating various ways you can choose to engage choice talent, from interns to full-timers and everything in between, under a unified talent pool for enterprises to select from.

Orrin states, "if the program is not being adopted, you've failed." If the overall experience of finding somebody, hiring them, and getting them paid is smooth using front-end technology, then that's the experience that drives adoption.

Unfortunately, many enterprise solutions continue to push clunky, unattractive tech when "the goal is to be ATM simple" regarding usability, states Peña, because inefficiencies can create significant barriers toward widespread adoption.  

"Harbingers for complexity are rooted in people's bias to insert complexity as a mechanism to control and manage risks, which tends to bloat out of control."
-Bryan Peña, founder of Defiant Solutions LLC.

We have to ask ourselves when searching for new tools and processes, is this necessary?

There are open-ended questions around ownership, but as the ideas within this industry trend matures, it becomes more of a human capital question.

The human resources arm of procurement becomes an end-result functionality. The hiring managers and HR departments are the buyers who do all the "work" onboarding and paying varied talent types.

Contingent workforce managers usually only represent buying organizations and often oversee negotiations and supplier relationships on behalf of the end clients, which is HR. Contingent workforce managers typically control and gate-keep the process but don't have the actual budget to pay said contractors.

Question: How do you involve contingent workers in company culture?

"A lot of the histrionics around the co-employment boogeyman have led to a lot of bad practices around how you incorporate non-employee workers into your company," says Peña, "to the extent that they are participating in company events or having access to corporate discounts… I think not including them in those discussions is counterproductive." The key to retaining talented workers is treating them well and keeping them engaged for more extended periods.

Question: What happens to companies that don't hire the contingent workforce, support remote work, or promote flexibility?

Peña answers, "the overall employer value proposition holds suit. If you're not going to match the general zeitgeist in terms of benefits at the time, then (you’ll) have a harder time recruiting candidates."

The war on talent is real. Suppose your business is unwilling to get with the times. In that case, you'll likely have to pay for it in other ways, like raising candidate salaries, offering higher benefits, and overall suffering the increased cost to retain talent.  

Your access to talent will go from being an ocean to a small river. So, instead of forming boundaries around skilled workers, use tools like Worksome that help you to dip into the seas of human knowledge without limitation. We provide solutions that have the most potential to capture human engagement - a win-win.

"The smartest people don't work for any one organization. Tapping the power of everyone is the way to accomplish things — and technology is giving us the ability to do more of that."
- Co-founder of Sun Microsystems Bill Joy

How do you see contingent work being part of an organization's diversity, equity, and inclusion (DE&I) talent acquisition strategy?

"It's your organization's preference toward incorporating those numbers into your hiring strategy,” says Bryan. “When you start to focus on DE&I, I would make sure that instead of writing requirements that strive towards hiring diverse candidates, hire and engage staffing firms or providers that specialize in providing diverse talent. Incorporate them into your strategy. To the extent that your conversion rate of temp-to-perm is an appreciable sourcing channel, (you will) need to incorporate those diversity metrics into your overall calculations… to make sure you're showcasing the right sorts of opportunities to people."

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