With the latest estimates from Statista showing that there were an estimate 1.69 million temporary workers in the UK in November 2022, it’s easy to see that the ownership of managing a contingent workforce needs to be fully thought through and communicated across any organisation.
An increasing number of businesses are adopting an agile workforce, comprising both permanent and temporary workers to allow them to respond to changes in demand. This makes it more important than ever to have a process for bringing in contingent workers that’s robust, efficient and delivers when needed.
In this environment, the age-old question of who should own contingent workforce management rears its head once again. Should it sit alongside traditional hiring and management in HR, or should it be seen as a series of processes and contracts that would see it fit into procurement’s portfolio?
There are advantages to each area owning it. As both have certain skills and expertise they could bring to the role. But they also have significant blind spots which create risks from having sole responsibility in managing a contingent workforce.
Why do you need to manage a contingent workforce?
We’ve known contingent workers are increasingly becoming a key segment of the workforce. For businesses there are advantages to being able to scale and respond to demand quickly through taking on temporary workers. But without careful management the business won’t fully benefit from this way of working.
For instance, there may be one area of the business that’s able to fulfil a need in another team. But without oversight of the resources already in the business and the costs associated with that resource it may lead to duplication, cost spiralling or the need going unmet.
Part of creating a successful blended workforce lies in treating all workers the same and ensuring a consistent experience. Without careful management of the contingent workforce, it’s impossible to do that, heightening the risk of dis-engaged temporary workers and reducing the size of the talent pool for future contracts.
Team HR
Traditionally it’s been HR that have led the way with strategic workforce planning including managing the skills agenda for the company. They have the skills and knowledge of hiring and managing and that’s a fundamental part of their function. It’s only logical then, that when it comes to who should own the process it would sit within HR.
Talent management and all processes connected to that run through HR. That includes employment contracts, flexible working arrangements and periods of leave and absence. Placing HR at the heart of the need for a contingent workforce and allowing them to coordinate everything from one place would make sense.
With the need for contingent workforces to be treated the same as permanent employees from the hiring process through to the onboarding, attributing HR with this responsibility also brings permanent and temporary workers together and helps ensure there is synergy between the two experiences. This might be a shift for some HR teams that have focused purely on permanent employees but it enables there to be a holistic oversight of all people management within the business, without it being siloed into two different camps. It also builds in the ability for HR to think strategically about whether a role is best suited for a contingent worker or a permanent employee, taking into account wider people impacts and the EVP or CVP that is used in attraction. There’s also the possibility that an individual working on an assignment could be converted to a full-time position.
Visibility of total workforce costs will also allow an oversight of what is most commonly the biggest cost to an organisation and how this is managed and planned efficiently. HR would be hard pressed to carry out this important role without clear oversight and knowledge of the contingent workforce within the business.
Team Procurement
Procurement’s primary function focuses on value. Value through pricing, contracts, terms and conditions, partnerships and other formal arrangements. The notion of value is at the heart of contingent worker agreements.
The argument for procurement leading the way when it comes to contingent workforce management is that they can ensure the best price and value in the agreements. With agency costs usually considerably higher than permanent salaries , it’s essential that there is a process in place to monitor costs and standardise them, where possible, across the organisation.
The skills and experience across the procurement team also proves valuable when it comes to performance ,ensuring there are compliant processes and management of the supply chain. Focusing on the strategic and structure of a contingent workforce rather than the people side means that a more formalised process emerges. Bringing together sporadic hiring decisions that might vary across the organisation. But this focus excludes productivity, workforce quality and employee engagement. Three elements that are crucial for a successful workforce.
Managing a contingent workforce requires collaboration
It’s clear that the best way to manage a contingent workforce across an organisation is through collaboration. Both HR and Procurement have clear strengths but they also have blind spots which, thankfully, complement each other.
Procurement can focus on ensuring value, standardising the process and building a solid supply chain enabling HR to step in and look after the people involve, creating an equal hiring and onboarding process and engaging the contingent workers.
It’s only by working together that rogue costs will be eliminated, standardised pay will be established and high-quality individuals who deliver value to the business will be brought into the company when needed. When managing a contingent workforce is left to just one department the shortcomings of that department will be highlighted – whether that’s in the management of people themselves or errors and overspends in the contracting process. A truly collaborative approach is the only way to successfully manage your contingent workforce.
