Accelerating the growth of your contingent workforce can put company culture at risk.
Introduction
Increasingly, talent acquisition teams are making contingent workers a core part of their resourcing strategies. There is, quite rightly, a lot of noise around the importance of managing the risks around contingent worker non-compliance and contingent workforce costs. Yet there is often less heard around how to manage the risks to company culture and performance.
The background
The growth of the contingent workforce is a global phenomenon. For many workers, the added flexibility and autonomy that comes with being self-employed is a benefit. A part of the attraction for employers is that it allows them to add an element of elasticity to their workforce, using more agile resource to capitalise on growth opportunities without the burden of adding to the permanent headcount.
It seems to be a win-win, especially when the outlook for future growth is so difficult to forecast accurately. As organisations scale, and the contingent workforce expands, it is tempting to rely on contract workers more and more. But there is also the danger that rapid growth in an organisation’s contingent workforce can create new challenges. How deeply do contract workers engage with the values, mission and vision of an organisation? How strong is their affinity to the company culture and do they share the right mindset, behaviours and attitude?
When you need to accelerate the growth of your contingent workforce, how do you manage and reduce the potential risks?
What are the warning signs?
It feels inevitable that organisations will rely more on contingent talent in 2024 and 2025, not least because of changes in the recruitment market, ongoing skill shortages and candidate expectations. As those contingent workforces grow, what do organisations need to watch out for?
Here are a few warning signs:
1. Is your contingent workforce hidden?
How are contingent workers tracked through your organisation? For many employers, contingent workers can enter the business informally and, often, the processes and policies that apply to permanent employees do not apply to off-payroll workers. Since contingent workers don’t necessarily impact a company’s employee headcount, a hidden workforce can develop.
2. Does your contingent workforce complement your permanent workforce?
Recruiting in a business that is scaling quickly can be a challenge, whether you are bringing in permanent or contingent talent you need the time to ensure that you bring in the right fit. Do they have the right skills to complement what you already have? Will your existing workforce feel as though they are being replaced or overlooked? Are you adding to the talent you already have, or just adding to the numbers, the cost and the headcount?
3. Do you have a robust onboarding process in place for contingent workers?
As Hiring Managers often decide to bring in a contract worker, organisations do not always have a robust onboarding process. This means that contingent workers can join the company without having an understanding of the working environment, values or standards. Particularly in highly regulated environments, where there are business-critical processes around Health & Safety for example, onboarding quickly, and effectively is vital.
4. Do your contract workers have clearly defined goals?
Experienced contract workers are often recruited into organisations to fill skills gaps. When it happens quickly, it is not unusual for those workers to have loosely defined roles and responsibilities – and then to move around onto different projects as they become part of that ‘hidden workforce’. Setting out roles and responsibilities clearly is an important part of evaluating organisational requirements, ensuring that you have the right skills for the right tasks, and that you are paying the correct rate.
What is the solution?
Different organisations manage their contingent workforce in different ways. It depends on your industry sector, the size of your organisation, the processes you already have in place and your wider resourcing needs.
1. Appointing a Managed Service Provider
A Managed Service Provider will partner with your organisation and take responsibility for ensuring that your contingent workforce is compliant, cost-effective and on/offboarded effectively. There are different ways that an MSP can deliver a contingent workforce program, but an important component will be a technology platform that can help to standardise contracts, harmonise invoicing and manage the end-to-end vendor supply chain.
2. Ensuring that Talent Acquisition impacts in the right areas
In some organisations, Procurement or Operations deal with contract workers whereas Talent Acquisition deals with permanent. Employees are added to the payroll system, while contingent workers are compensated more like vendors by the finance department. Therefore, there is a tendency for contingent worker relationships to feel more transactional. It is, for this reason, important that Talent Acquisition impacts on key process areas, such as onboarding, to ensure that contingent workers gain a sense of the values, culture, identity and mission of the organisation they are working for.
3. Educating hiring managers
Avoiding the ‘hidden workforce’ means educating and communicating with managers about the hiring process for contingent workers. If you appoint an MSP, this could be something that they will also play a part in – ensuring that hiring processes are consistent, workers are classified correctly and contingent workers are tracked properly on their journey through the organisation.
4. Extending your Employer Brand to include contingent workers
Employer branding is a standard Talent Acquisition tool when it comes to recruitment for permanent roles. But not every organisation extends it effectively to include contingent workers. As the market changes and the competition for contingent talent increases, building branded communications will be an integral aspect of every contingent workforce program.
5. Mapping your talent communities and candidate journey
One of the factors driving the evolution of the contingent workforce brand is the increasing availability of talent community technology and freelance/contractor community platforms. There are no more opportunities for employers to build their brand presence, engage with contingent workers outside of the recruitment process, and build direct relationships.
Conclusion
Utilising contingent workers can help Talent Acquisition teams to identify different talent communities, incorporate new skillsets into teams and help to manage the growth trajectory of the organisation – but that is really only part of the picture. Looking ahead, forward-thinking TA teams need to be thinking about how they build a truly integrated, inclusive, blended workforce where permanent and contingent workers both feel valued, rewarded and motivated by the role they play in an organisation’s success.
If you would like to learn more about how to integrate a contingent workforce within your organisation, get in touch with us.
