Growth of Contingent Workforce Creates Challenges for HR

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By Martin Berman-Gorvine

Dec. 9 — The unprecedented growth of the temporary or “contingent” workforce is leaving HR departments scrambling to keep up, a consultant and a vendor management systems company executive said during a Dec. 9 webinar.

“Today, companies are under pressure to enhance profits from the contingent workforce, and they face many challenges related to this workforce,” Juan Gaytan, director of human transformation at Deloitte Consulting, said during the webinar, which was sponsored by South San Francisco, Calif.-based cloud computing company SuccessFactors.

Demand for temps is being driven by such factors as workforce demographics, pressure to reduce or at least limit full-time headcount, value-added strategies and cost management, he said. At the same time, Gaytan said, increased government enforcement on issues like misclassification of employees as independent contractors is creating compliance risks (33 HRR 1226, 11/16/15), and temps may be working on operations that are essential to organizations' intellectual property or business needs. Managed service providers, vendor management systems (VMS), and improved reporting and analytic functions can help improve employers' ability to manage contingent workers, he said.

Gaytan said that contingent workforce management involves both a “front end” of finding and hiring contingent workers either in-house or from external companies, and “back end” activities such as tracking, management and reporting about the temps; and the latter activities tend to get short shrift. Savvy employers can improve matters by, for instance, asking suppliers in various geographic regions for the going rates for contingent workers on the front end, and designating a single point of contact who understands the regulations governing contract employment on the back end.

Arun Srinivasan, senior vice president of strategy and operations at Chicago-based VMS provider SAP Fieldglass, said that in the context of the huge increase in the contingent workforce in the past 15 years, which he said is an “irreversible” trend, leading organizations are taking “a phased approach” to managing contingent workers.

“The composition of the workforce has changed, and the management of the workforce presents differentiating opportunities for your company,” he said. “I see procurement and HR as two sides of the total workforce management coin.”

Still, for HR this may seem like “a lot to take on,” Srinivasan said, so he suggests to “start with something simple: inclusion and visibility” of the contingent workforce as a part of the total workforce.

If there is an accurate headcount of the contingent workforce, along with good figures on how long they spend working for the organization on average and total spending on them, it leads to “better decisions,” Gaytan said.

To contact the reporter on this story: Martin Berman-Gorvine in Washington at mbermangorvine@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com