How do you manage permanent and contingent employees?

by Anita Lettink

Who are your employees? Is it the person who has a permanent contract in your company and a place on the org chart? Or the contractor who was just hired on your project team? Or is it the temp worker filling in for a colleague on maternity leave? What about the robot that is assembling your products?

In today’s labor market, the notion of a ‘job for life’ is gone. Traditionally, employees’ careers followed a linear upward path, with them remaining at a company for many years.

However, nowadays the career of choice resembles a lattice. Employees choose the projects that challenge their skills, working on and off for certain periods of time. In addition to interspersing their work life with sabbaticals to study, travel or take care of younger or older relatives.

Employees want to have a say in their work. They wish to design their own jobs, a practice known as job crafting. We also see shorter (3 or 4 day) working weeks, with people spending the other days caring for family, having a second job or getting an education.

On-demand workforce

We can arrange everything in our lives on demand, be that going out, shopping or watching a movie. However, for many of us, work still means being at a fixed location between specific hours.

As the lines between personal and work life become blurred. The idea of an eight hour working day is also disappearing. This is because more people work in virtual, global teams. They communicate with colleagues and customers outside of normal business hours and across time zones.

Companies realize that if they want to attract talent, they must accommodate employees’ personal lives. Consequently, this means creating solutions that fit their individual needs.

Flexible employment status aka the contingent workforce

It’s also not in a company’s interest to hire everyone as permanent staff. This is so they remain agile and be able to respond fast to changing circumstances. Companies can use more short-term, flexible forms of labor, such as freelancers, contractors and consultants. This is opposed to offering everyone a permanent contract.

This results in a more fluid, more temporary workforce. All this means is that the people you work with in your team are less often permanent employees of your company. People come and go as the company needs. We call this the contingent workforce.

In the end, it comes down to setting up a flexible working environment, where work fits an employee’s lifestyle. It’s about offering a flexible workplace with alternative arrangements that fit someone’s specific needs at different stages of their life.

Talent management

One thing however has not changed. As employer you still need to identify the best available talent and when they work for you. Therefore, it’s up to you to ensure that people are paid correctly and labor laws are respected. However, how do you:

• Do that, when not all of them are permanent employees on your payroll?
• Know which contractors delivered quality work and should be rehired and which ones didn’t? Especially in larger organizations, how do you share knowledge so other departments don’t rehire bad performers in future?
• Alert the organisation, to the fact that a contractor bounces around and works there year round? So it might be more economical to hire them on a permanent contract?

HR needs to integrate these contingent workers and their data into select processes and practices. This ensures they are productive, connected, and factored into strategic planning and analysis. For permanent staff, you can view these insights in the HR system, both from a cost and quality perspective.

An integrated view of the workforce

So how do you ensure you record information properly for people moving in and out of your workforce during the year? Adding them to your HRIS is usually not a good idea. This is because it can’t always capture the right information, especially from a financial perspective.

The contingent workforce doesn’t earn a salary, they send you an invoice. They are not the company pension scheme and they don’t receive benefits. However, you still want to be able to rate their performance.

The challenge is to design a system in such a way that it provides you with an integrated view on your total workforce, permanent and non-permanent staff included.

New cloud solutions bridge that gap. They unify the records of everyone that works for you as part of the contingent workforce. Contingent workforce management solutions also cover adjacent business processes. Including procurement, statements of work, contracts, project management as well as invoicing and payment. It allows you to:

• Store personal data
• Receive and pay invoices
• Record use of company systems
• Arrange for access badges and other company property to be assigned
• Manage all aspects of your contingent workforce. Including advanced functionality like category-specific supplier management practices and analytics using data modeling and optimization

All of the above allows a company to properly procure, manage and optimize their global workforce. Ensuring contingent labor, services managed through statements of work and independent contractors are included.

‘What if’ scenarios

Ultimately, having an integrated view on your permanent and non-permanent workforce allows you to analyze what-if scenarios:

• What if you suddenly experience an upswing (or downturn) in demand for goods and services?
• Can you handle that with permanent staff?
• Is that the most efficient and effective solution?
• What if your preferred temp agency can’t fulfil request?
• Do you have a second choice with the resources that enable you to keep your delivery commitments?

Conclusion

In summary, contingent workforce management systems enable you to pull all workforce data together. They provide a comprehensive view and understanding of your workforce. In the highly competitive business environment of today, where talent is procured globally, that is not a luxury but a necessity in order to survive and be successful.