America’s contingent workforce – the broad category of workers who are best described as anyone who is not a full-time, permanent employee – continues to expand.
At last count (though the latest numbers are not all that recent), the Government Accountability Office (GAO) found that contingent workers accounted for 40% of the workforce in 2010, up from 35% in 2006. According to the GAO, the growth was not typical freelancers/temp workers, who are nothing new, but an increase in permanent part-timers, a category that grew as employers cut hours and hired fewer full-time workers during the 2008 recession.
Concurrent with the rise of the nation’s contingent workforce, according to a report from Deloitte, some large employers estimate that up to 30% of their procurement costs are spent on contingent workers. At some employers, Deloitte notes, the populations of contingent workers have ballooned so much that they may represent a larger percentage of the workforce than ”regular” employees.
The struggle with management
While the contingent workforce segment is growing in importance and size, many organizations may not be skilled at managing it, Deloitte reports. Challenges include the lack of an integrated workforce management strategy, ad hoc and sometimes high-risk managerial behavior, poor data management, and inadequate technology.
Unfortunately, according to Jody Rummel, vice president of HR at Yoh, a Philadelphia-based international talent and outsourcing company, the lack of management skills also means retention of this growing, and valuable, category of workers often is left to chance.
In his role, Rummel knows first-hand about developing and implementing a retention plan for contract employees. It’s too bad, he explains, that it’s a strategy often not pursued due to the massive challenges associated with keeping those employees engaged.
“Company leaders can find more stock in this planning if they consider their contract labor and employment brand, build a contract workforce that they have confidence in, create contract employees as brand advocates, and view the plan with financial benefits in mind,” he says.
For outsourced recruiters, clients work more directly with contract employees than they do with the recruiting resource or company they represent. Therefore, building a strong relationship with the contract employee is important because the employee’s feelings towards their employer of record will be transparent when dealing with clients.
In 2014, the average share of contingent labor landed at 18%, up from 12% in 2009, and the figure is continuing to grow, Rummel says.
“When you truly think about the plethora of benefits that can be gained from a sophisticated retention campaign, you start to realize that no matter what it takes, it is worth the investment of time and resources,” he says.
Go back to the well, create brand advocates
According to Rummel, soon after a contract worker successfully completes a project, companies should find ways to “re-deploy” the same individual again. Often, recruiters choose to go back to the candidate marketplace to source a new, unknown candidate rather than go back to the well of pre-qualified, competent candidates who have worked a similar project before. The negative consequences of the latter practice go well beyond wasting time and money.
“Following a successful contract assignment, the potential for gaining new opportunities for talent acquisition drastically increases,” he says.
Then there are financial benefits
Not only will increasing retention among contract workers make life easier for recruiters and enterprises, but there will be significant financial benefits too, as not needing to continually vet new candidates against client contractual requirements – criminal background checks, drug screening and more – will save both time and money.
“Organizations need to consider positioning internal recruiting resources in a more efficient and effective manner, as opposed to resetting the search process every time a new open position hits the desk,” Rummel explains, adding the it’s important to take notice of an organization's actions to see what impacts "the care, engagement, retention and/or redeployment of your valued contract employees"
