Why a Contingent Workforce Strategy is Central to Performance

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Businesses that want to leverage their workforce as a true strategic asset should include contingent workers in their overall strategy. Otherwise, they won’t take advantage of the skills, knowledge and energy that’s come along with their complete talent pool.

Organizations that take such a holistic view outperform competitors that follow a more traditional path to workforce management, according to Forrester Consulting. They also see advantages in areas such as revenue growth and customer success.

Study: Employers with a holistic view of full-time & contingent workers outperform more traditional competitors. @ADP @HR #HRTech Share on X

Forrester refers to these employers as “people-centric.” In a study commissioned by ADP, the firm examined how their idea of tying employees to the center of business strategy played out in the real world. While the report was published in June 2019—before the Covid-19 pandemic tipped the business and labor environments on their heads—its conclusions are still worth considering.

For example, while more candidates are chasing fewer jobs today, employers still want to attract and retain the most talented workers they can find. While they search, they must contend with the challenges of remote recruiting and onboarding, managing a dispersed workforce, and creating some kind of comradery and culture among employees who may rarely interact in person.

‘People-Centric’ Includes Contingent Workforce

In a nutshell, Forrester defines people-centric organizations as those whose “fundamental operating philosophies” focus on people as being critical to success. That focus is reflected efforts to develop an employer brand, a team-oriented culture and an engaging work environment (which includes a successful digital experience, Forrester said).

These employers place workers “at the heart” of everything from their business priorities and KPIs, to CEO mandates and the tools employees use to get work done, Forrester said. And by workers, Forrester means contractors as well as full-time employees.

The most “mature” organizations—meaning those that have done the most to incorporate workforce dynamics into their operating model—use contingent workers to expand and improve their capabilities, Forrester said. They value contractors for specialized talent, the ability to fill skills gaps and produce higher quality work. Less mature companies, on the other hand, tend to regard contractors as inexpensive labor. They hire then to reduce costs, handle seasonal work and provide extra hands when pipelines expand or speed up.

Mature organizations also regard contingent workers as a part of their workforce—an extension, rather than a bolt-on, say. Sixty-five percent of highly mature employers engage contractors through HR, rather than leave them to the Purchasing department as mere vendors, Forrester said. They also find more contractors through employee recommendations (48% compared to 37%). By contrast, 61% of low-maturity organizations find and hire contractors through Procurement.

In January, the ADP Research Institute reported that the contingent workforce had made greater inroads into the global economy than most people recognized. Its report technology was transforming why, where and when people worked as much as it impacted how they worked. This indicated that the spread of contingent work is taking on a more structural aspect than many employers may have realized.

Disclosure: ADP Next Gen HCM is a sponsor of the HCM Technology Report. Originally published June 2020

Image: iStock

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