I had the pleasure of sitting down recently with the founder of Aptitude Research, Madeline Laurano, for a webinar titled “Total Talent Management: The Key to the Future of Work.” During our hour-long discussion, we talked through some analysis of the workforce, who should own the extended workforce, what the rules of engagement should be, and offer some key recommendations for the future.
Today, over 80% of companies are leveraging contingent workers, and one in three plan to increase their investment in 2021. This increased reliance on extended workers (i.e., contractors, gig workers, freelancers, independent consultants, project-based workers) brings new challenges for the enterprise.
There is an increased investment in contingent workers based on Aptitude’s analysis, but there’s little visibility into their make-up. What’s more, companies have no idea if they’re managing it right. Without a “playbook,” HR leaders feel unable to be successful.
Some companies have doubted the rate at which the contingent workforce is growing. Aptitude’s research shows 40% of the workforce is actually contingent, and this number has been validated by many industry experts.
Organizations are now facing a post-COVID world. They will have to shift to remote work or a hybrid work environment and will also hire remotely more so than in the past. People want flexibility, which leads to a greater push towards the gig economy.
Madeline and I have been having these conversations about disruption and change, and we were ready to make some bold statements about how companies are going through this transformation. Specifically, HR should own this population of workers.
This shift from procurement to HR ownership is already taking place. According to Aptitude research, 43% of companies said they are shifting from procurement to HR to manage contingent workers. Many Workday customers already have a good spotlight on their employee population but they need visibility into the total population of workers. We’re seeing that procurement is happy that HR is finally at the table because this total view mindset is a talent exercise. It’s about how companies hire, retain, and engage their entire workforce. The end goal is visibility to make better business decisions throughout the organization.
According to Madeline, there are several reasons HR should ultimately own the extended workforce -- namely, it’s a people business. To achieve total talent management, you’ll need to have full visibility across your entire workforce. HR should have control, they should know what their organization’s workforce looks like. This includes people, skill sets, key performance indicators, and how workers are classified.
Additionally, HR should control the non-employee lifecycle. If you don’t have visibility, you don’t have control. This control can empower HR and allow them to impact worker experience, engagement, DE&I initiatives, and career pathing. If you don’t think the extended workforce is important to include in these things, Madeline said, look no further than Glassdoor reviews -- many of which are left by contingent workers. This can have a major impact on how a company is viewed.
One interesting thing Madeline picked up on is when looking at job descriptions for Chief People Officers compared to Chief Procurement Officers is the People Officers’ focus is on the employee, DE&I, and aligning business and culture. The Procurement Officer is, in contrast, concentrated on obtaining goods and services to help the business grow. And yet, in many organizations, procurement manages all non-employee labor without the requisite skills necessary to do so.
HR ownership mythsOne pushback we’ve heard to owning the entire workforce is that, “This is going to be so much extra work.” However, the mindset is quickly shifting amongst many business-minded HR leaders to “this will enable me to expand my career.” This shift enables things to get done effectively and increases productivity across the enterprise.
Another concern we’ve heard from HR professionals is that they don’t have the expertise to manage the extended workforce. Madeline says that’s not true. You’ve shown your ability to step up and into major trends like COVID, DE&I, remote work, and other challenges over the past year. You have the expertise already. The level of experience you have with the employee lifecycle can be applied to the non-employee lifecycle in the same way.
In fact, visibility into spend, costs, and engagement is far greater in companies where HR owns this category of workers.
The rules of engagement can be difficult if you have no visibility into your workforce. Extended workers are being left out of cultural shifts happening like social justice, pandemic-related decisions, DE&I because there isn't a single system in many organizations to manage across the entire workforce.
Today, technology provides a path forward with visibility to allow proper management across the enterprise. Traditional VMSs were designed for procurement. They are transactional in nature and weren't designed for HR or the worker themselves. Working with Extended Workforce Systems like Utmost allows for a fundamental way to change how organizations and workers interact.
Simple gestures go a long way to show your organization takes its entire workforce seriously when it comes to decisions that will impact them and their work. Start small. Talk about your entire workforce when you are creating language for job descriptions and other policies and procedures. It shows you care in the same way for the entire company.
Provide similar experiences to employees and non-employees. Siloing your extended workforce is detrimental to talent that's so important to the company. It impacts productivity, brand outcomes, and referral channels.
To do this, companies must classify their workers properly to be able to make this distinction and offer them appropriate perks (i.e., badge access, gym membership, etc.) Create an “employee” lifecycle for them, one that's appropriate, inclusive, and engaging.
Aptitude found one in two employees reported that they’ve not been recognized since the beginning of the year. Recognition is good for retention and morale, and contingent workers should be included in this, too. There’s no compliance risk in offering thanks for recognizing someone for their work. Finding a systematic approach to gratitude will only increase productivity and retention.
The key takeaways from our time with Madeline were this:
Empower HR to own the extended workforce. HR is where all talent should be concentrated. This encompasses finding, attracting, vetting, retaining, measuring, and reporting on all talent across the enterprise.
Create visibility. Companies are investing so much in their workforce with little visibility into the fast-growing segment of their population -- contingent workers.
Ask difficult questions. Have internal conversations with procurement, finance, IT, and talent acquisition to discuss a total talent approach and decide what’s working and what barriers are in place to achieve it.
Invest in better solutions. There are purpose-built, future-centric technology options that exist today. Traditional VMS technologies were not built to cater to the worker or the extended workforce.
Be a champion. HR leaders must continue to shift from a “more work” mentality to an opportunity mentality to fundamentally change the way their organization plans, manages, and impacts their entire workforce.
If you want to check out the webinar in full, watch below or click here.
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