Sourcing and Managing Contingent Workers: Issues and Solutions (notes from the World Café sessions at the Contingent Workforce Conference)

The World Café sessions at the ATC Contingent Workforce Conference  brewed robust discussions about the issues facing companies when sourcing and managing contingent workers  (you can read the Twitter action from the two day conference here #ATCCWF).

As a table captain for one of the groups during the World Café, my task was to facilitate dialogue on the topic of sourcing contingent workers. Three groups cycled through during the allotted period. About half of the participants at my table already had specialised sourcing functions for their organisation, or their client organisation.

Here is a summary of the notes from the discussions:

Key issues relating to sourcing and managing contingent workers

– Hiring managers directly sourcing and paying high fee’s.

– Lack of screening processes for contingent workers.

– Skillset shortages when needing contingent workers.

– Lack of on-boarding processes, including payroll, IT, OHS, risk.

– Clarity around classifying contingent workers as casual, contract, fixed term, statement of work.

– Loss of IP (Intellectual Property) when contractors leave.

– Complexities with managing contingent workers and the changing legal and tax landscape.

– Reputation management.

– Payment of invoices through antiquated systems.

– Finding / setting up categories for roles and understanding the market values of their skills can be complex.

– There can be an understatement of work from service providers. Creep can occur over and above the contract statement, how do you identify the leakage?

– Having a single source provider for contingent workers can be limiting.

– Internal misunderstandings from departments have occurred about how to treat the contingent worker.

Solutions companies have developed to improve sourcing and managing of contingent workers

  • Conduct a thorough needs analysis with the manager before engaging a contingent worker or a vendor to find one. Be clear about the legal risks and have a process in place to minimise potential risk. Line up classifications for both permanent and temporary workers.
  • Have an alert system in place whereby when a contingent worker has been in place for 3 months HR and the Manager are notified. This can help with decisions to convert people to permanent, reporting, moving contractors around to other areas in the business where required, and managing costs.
  • Involve HR early with workforce planning. Be clear about the problem you are trying to solve. HR can help a manager evaluate all the options. Asking the hiring manager why they need a contractor, can a permanent employee fulfill that particular work requirement?
  • Engage contingent workers in a compliant manner. Set up a clear recital, aim of engagement and thorough contract to ensure compliance and agreement upfront.
  • Set up a relationship with a CMO (Contractor Management Organisation) and mandate it through the company. Gain executive buy-in during the process.
  • Obtain clarity at the beginning of the process of finding resources, this can help avoid a double fee if someone starts looking for a contingent worker but then decides they need a permanent.
  • An ATS (Applicant Tracking System) can be adapted and evolve to include contractors. Involve the stakeholders in the early stages before centralising / decentralising a system.
  • Provide timely feedback to candidates and set expectations about timelines. In demand skilled workers have options and don’t stick around if they aren’t engaged well.
  • Set up a preferred supplier structure with contractor management organisations. Negotiate fees and service levels up front.
  • Set up consistent categories and rate cards.
  • Manage quality of services across vendors.
  • Set up a tight panel where all contingent workers must go through that system / vendor.
  • Don’t put in too many processes to slow down the engagement as people with in demand skills will walk. Talent is nomadic.
  • A supplier panel with three major suppliers can improve visibility and reporting on what is actually going on with a contingent workforce.
  • Have HR own the whole process of sourcing, engaging and maintaining the quality of contingent hires.
  • Communicate internally about the contract model adopted and ensure it is fully embraced.
  • Create useful sourcing strategies and understand stakeholders involved.
  • Create a process for hiring and managing contingent workers around how the business works.
  • As a business grows rapidly there can be issues around finding space for workers. Enabling people to work from home or taking on home based contractors can help alleviate this issue.
  • Put in place rules and policies to support the engagement of different types of labour.
  • Run reports monthly on contractor usage, and monitor.
  • If you have a well-structured permanent recruitment model you can adapt that for a contingent model.
  • Consider which contractors you can convert to permanent to help with retention of intellectual property.
  • Obtain surveys and feedback from contractors – they may be a talent pool for future projects or assignments.

The World Café sessions and conference overall provided a fascinating window into the world of the ‘blended’ workforce. One speaker described a business today as a new workforce ecosystem – one that includes company permanent employees, professional services firms, outsource providers, consultants, remote workers, casual staff, statement of work contractors and more!

This new work landscape brings with it levels of complexity around administration, compliance, risk, attraction and retention of workers, payroll, reporting and control. As a growing area for businesses in Australia, balancing agility with sound management is an ongoing challenge.

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