What is Flexible Workforce anyway?
I am now for almost a decade in the Staffing / Recruitment industry and focus on technical solutions for companies who want to manage their workforce. While there is a lot content written about permanent recruitment, the non-permanent staffing side and the technical implications don’t get too much attention. I am in the fortunate position to have worked with a wide rage of companies in the Banking, Agriculture, IT, Insurance, Telecoms and Manufacturing/Engineering industries and implemented staffing software and processes for them.
I have seen both sides, the RPO (Recruitment Process Outsourcing) for permanent placements and the MSP (Managed Service Provicer) for temporary workers. While RPOs use ATS (Applicant Tracking Systems) such as Successfactors, PeopleFluent, Taleo, Lumesse to track and manage applicats as well as onboarding, they are often also used as CRM (Client Relationship Managemet) software. VMS (Vendor Management Systems) have to go a lot further and have to be far more flexible. Samples of VMS sosftware are for example Fieldglass, PeopleFluent, IQnavigator and Beeline and they all have the same goal: Managing flexible workforce within an organization.
This is challenging: capacity planning, finding talent, managing costs, considering legal implications and deciding on the engagement model. All these things have to be done no matter if 5 or 50 000 external workers are being managed. Adding complexity, in large corporations this is done across multiple sites, functions and entities and at high speed – in the blue colour space for example workers might need to be replaced within the same shift.
On average, companies spend 44% of their workforce budget on non-permanent staff. That is almost half of the total workforce spend being utilized to engage, manage and pay a highly diverse, external employee group which is not just difficult to retain, but even harder to keep visibility and financial control of.
External workers create a competitive advantage by gaining access to top end suppliers and workers in a fiercely contested skills market. But who are these external workers? This is such a simple question, but most of the clients I have been working with over the past decade have exactly this definition as a starting point which involves procurement, HR and managers. And the definition set the boundaries for any system which is implemented.
In essence, there are 3 types of workers managed under the term of flexible workforce:
There are two types of contingent workers. Firstly, there are those who fill an existing permanent role which is temporarily vacant e.g. due maternity leave or extended sick leave. Secondly, there are contingent workers who fill new roles due to high volume, new projects or seasonal requirements. Both types of contingent workers are paid for hours worked and get compensated for expenses such as travel.
Statement of Work(SOW)
A multi-bid SOW or RFx requests scope, price and information requirements from potential suppliers in a standardized and comprehensive format to ensure objectivity. Once the supplier is chosen, the Statement of Work can be created from either from a template /pre defined legal contract or individually setup. A solid SOW contract contains details about the workers, deliverables and contractual clauses such as liquidated damages and minimum acceptance criteria.
Workers who fall into neither of the above categories, such as managed services, are usually tracked for visibility only. They allow for better capacity planning, visibility, onboarding and reporting. Though they are not paid by the company but directly by the supplier these workers still count towards the external workforce.
In the upcoming blogs, I will share more insight of flexible workforce management and how to organize “human procurement” and the challenges I come across during implementations.