Managing the Complexities of the Contingent Workforce

One of the conversations I’m having more often is around this concept of the contingent workforce, but in a recent presentation I realized some people weren’t aware of the issues surrounding this group. In essence,this segment of the workforce in the United States is made up of temp workers, contractors, freelancers, part timers, and other non-full time labor. With me so far? Now, let’s look at how big of a deal this is:

“Up to 30% of the Fortune 100 workforce is contingent. That number is expected to increase to 50% by 2020.” Source

When I read that statistic recently in a research paper, the magnitude of this shift is in the makeup of the workforce really hit me. There are three key areas that this trend is impacting businesses: a focus on skills, the gig mentality, and a results-oriented approach. Nontraditional workers are making up an ever-increasing portion of the overall workforce, and for companies that don't have a clear plan to take advantage of these workers, this can slow down and even hinder their growth.

The Focus on Skills

When companies need payroll support, they seek out companies that know and do payroll on a daily basis. It's no different when they are looking for nontraditional workers. The organization has a problem, and it needs a solution. In this case that solution happens to come in the form of a person with a specific skill set to get the job done.

Often times, those skills are needed for a temporary basis if they are highly specialized. In this area, staffing and contingent workers can fill the skills gap without a long-term commitment on the part of the employer. According to one PwC study, six in ten CEOs believe that there is a skills shortage. At the same time, that shortage can be mitigated effectively through the use of temporary or contract workers for their specific skill sets.

The Gig Mindset

With the rise of the “Gig Economy,” companies and workers are seeing less of a focus on the traditional employer-employee relationship. The downside of this is that many contingent workers do not receive benefits from the employers, whether financial or personal. This Workforce article highlights one worker who felt scorned by someone she supported, which ultimately impacts her loyalty and commitment over time. Companies need to be sure they treat their contingent workers with the same respect and appreciation they afford their full-time staff.

On the other side of the equation, driven individuals with extensive skill sets can differentiate themselves in the market and command the compensation they deserve. Instead of a single company having a monopoly on a person's talent, the worker can partner with multiple employers on smaller jobs and tasks. In addition, it allows the person to focus on working in areas of strength, which we know has positive effects on the worker's ability to reach higher levels of success.

A Results-Oriented Approach

If companies want to attract and retain high quality contingent workers, the focus needs to be more on the results they achieve and less on the process they use. In my mind, this seems to tie together a combination of two strong movements in the world of work that seem to fit here.

  1. Dan Pink’s book, Drive, focuses on how to engage workers through three intrinsic methods: autonomy, mastery, and purpose. These three words have taken on a power all their own as companies try to create compelling work environments that engage employees and allow them to do their best work.
  2. The Results Only Work Environment (ROWE) movement was started at Best Buy's corporate office years ago as a way to move away from the traditional considerations of how long employees were at the office. Instead, leaders focused on whether employees were producing results. This shift forced managers to examine employee roles, determine what specifically drove performance, and measure those activities effectively.

Management of Contingent Labor

One of the challenges of contingent labor is that it’s made up of people that need to be treated like, well, people. They need to be recognized for their efforts. They need training. Their performance needs to be assessed. The problem, as many HR pros will tell you, is that we don't always want to be in charge of the contingent workers. Some of the more common reasons:

  • The person isn't an employee, so procurement needs to handle them.
  • I can't treat them like an employee or we might run into issues with the IRS or Department of Labor.
  • With a temp hire the advantage is having the agency handle payroll, training, etc. We are offloading those tasks for a reason.

You get the picture. There are laws on the books that don't provide the flexibility for companies to handle this issue without involving some risk. On the other hand, there has traditionally been a silo mentality breaking out contingent hiring from “regular” hiring practices.

The problem won't be solved today, and there are enough companies making errors with the current laws that we probably won't see any changes to the legal side of the issue for some time. But HR can work to take ownership of the process and the contingent workforce while still developing safeguards to keep from running afoul of legal requirements.

In the end, the cause for this issue is partly due to the mindset of the HR population, and it's partly due to the existing legal framework that governs how we employ our staff.

Take this as a reminder that “the way we've always done it” might not be the best way to address issues as you move forward. Reevaluate the assumptions you might have about how work gets done. I'm excited to see how the legal environment changes over time to account for increasing work flexibility and a highly mobilized workforce.

How do you handle your contingent workers? Does your procurement team manage them, or does HR play a role in the process? 

Creating a Shared Culture of Learning with Books [Podcast]

Books. They’ve been around pretty much forever, and that familiarity is one reason they are not as appreciated as some other learning tools. But don’t be fooled–there’s more than meets the eye. It’s been said that reading one hour a day will make someone an international expert in their field in 5-7 years. While that exact figure may be up for debate, it’s clear that reading is a powerful activity for self-development.

In this episode of We’re Only Human, I interview Zach Rubin, cofounder of PBC Guru, a company that designs and delivers book club experiences for organizations looking to create a culture of shared learning. The discussion covers what books companies most often request, how to use books for supporting social learning, and a special free offer for We’re Only Human listeners.

Whether you’re a book nerd like me or not, this show is going to demonstrate that this fundamentally human activity, reading, has more value than you would have imagined.

Special Offer: PBC Guru is offering to implement and manage a virtual book club with your company completely free for six months. Just visit http://pbc.guru and fill out the contact form mentioning you heard about them on the “We’re Only Human” podcast.

Listen in the embedded player above or click here to listen on the hosted site.

What do you think about book clubs? Do they hold value at work? Why or why not?

What are “Organizational Silos” (and How Can Human Resources Stop Them)?

An organizational silo is a tight group of employees that forms within your larger workforce. You could think of it like a high school clique – members within the silo normally work together really well, but they often clash with other people outside their own group.

Organizational silos can be dangerous, because while the silo might produce great results as a team, they may be less invested in wider company goals and objectives. This makes them very difficult to spot, because on the surface, it can look like the silo is just a group of really dedicated employees! So from your position in Human Resources, take a moment to analyze the social movements of your workforce.

It doesn't matter whether you employ 5 people or 500 – organizational silos can form in any organization. It pays to learn how to stop them. Continue reading →

How can Project Management Aid HR?

There are many essential skills required for a position in HR that can be learned or strengthened through the study of project management. There is a lot that HR and project management and HR share and by studying both you can develop an edge that you might not have expected:

Planning and Meeting Targets

An important role of the HR department is to manage targets. This means that you must have strong time management skills, understand how to make the company more efficient and be organised in your work. You need to be able to keep people on track, and ensure that they are meeting their set goals, or at least working towards them. Getting experience in a project management position is one of the fastest ways to realize that this is a task that requires a lot more skill than one might have initially thought. It takes a good understanding of the people on your team to know how to motivate them and keep them on target without distracting them or applying too much pressure. But, seeing the project management side of target management can give you an alternative perspective on how the dynamics of a team can affect their pacing. In a HR role, you need to put together efficient teams and hire employees that are compatible with the company and capable of meeting their targets. When you study project management, you can achieve a better understanding of what it means to put together a strong team and see for yourself how the dynamics of a team can affect their progress. Continue reading →

How to Rock Your Next HR Job Interview

Recently a friend was applying for a job, and she came to me for help with preparing. She had worked with the firm for some time, and the opening was for a more senior position she was hoping to achieve. We took a little time to make sure the resume was presentable, and then we went to the fun part: a strategic plan.

Together, we developed an action plan for the first six months after she got the job that would allow her to be more effective than the previous leader, generating new business for the organization. We included discussions around business development, customer satisfaction, and employee relations.

And she got the job.

This is an incredibly powerful practice, but hardly anyone actually does it. Here are a few options for you to leverage this approach next time you’re looking for the right HR job.

Keys to Success

The first mistake people make is thinking that this just needs to be in their notes or in their head. Not true. This plan needs to be a physical thing you bring with you to give to the interviewers during the conversation. The simple act of giving them something they don’t already have puts you in a different light. Instead of just focusing on you, they are also focusing on your ideas and your insights, which (if they are good ones) can give you a leg up over the competition.

The second piece of advice is to make it attainable. Don’t throw twenty things on there, and don’t put one on there, either. Every company has something they can change, improve, or update. Ultimately, they might take none of your suggestions, but the goal should be to present a powerful case for why the things you mention are worth exploring.

How to Put this into Practice: Never Worked There

It’s challenging to do this from the outside, but with HR we have at least one avenue into the organization that others can’t leverage: the recruiting function. From the first moment you find a job ad, start making note of things that could be improved, changed, or modified.  Here are some ideas:

  • Job ads: are they written in a way that appeals to job seekers? Are they using good search engine optimization techniques to be found more easily by candidates?
  • Interview process: are communications and instructions clear? Do you know what to expect and who you’ll be interacting with?
  • Assessments: does the assessment add value? What is the perception from the candidate side–are the questions relevant and helpful?
  • And, of course, we could examine it through the perspective of the candidate experience. For instance, did you get any notification when you applied? Was mobile apply available, or did you have to use a desktop? Could you do one-click apply with LinkedIn, or did you have to manually enter every piece of information?

Whether you’re bringing in some research to offer context or you’re just giving an observation based on your perceptions (or both), you can make your point in a tactful manner. That’s a key to this entire approach, because if done poorly, it will make you look less qualified.

How to Put this into Practice: Worked There in Non-HR Role

If you have experience with the company already in a non-HR position, you’re in even better shape for helping to illuminate some of the areas of improvement. Remember, this isn’t a gripe session or a chance to air grievances: it’s a process improvement approach. Some ideas on what to talk about:

  • Modifying the onboarding process to get employees up to speed faster.
  • Changing the performance management system so that it actually encourages performance, not hinders it.
  • Offering niche voluntary benefits that appeal to one population or another in your company, such as dependent care or elder care. Or you can go the rock star route, offering something like a ski house for employees to use (one of our previous guest authors, Jane Jaxon, used to offer this as a recruiting tool at her company).

The entire purpose of this exercise is to show that you’re going above and beyond the basic job duties, looking for ways to innovate and bring additional value to the business. Again, I have to remind you that the way you approach this matters just as much as what you actually propose. You have to be careful to point out opportunities for improvement in way that doesn’t indict those that put the processes in place (or those that continue to manage them, for that matter).

How to Put this into Practice: Worked There in an HR Role

If you have worked there in an HR role and this is a promotion opportunity, then you have the biggest advantage of anyone else in the running, because you know what is working and what isn’t. You also have the biggest challenge, because you are familiar with the inner workings and might not be immediately aware of any innovative ideas for how to improve your practice.

If that’s the case, I would encourage you to do more reading, listening, and consuming of HR and business-related content to help broaden your horizons and help you understand some of the ways that exist to improve your processes and approach. Think about the evidence-based HR approach that I wrote on recently–it is a great way to help you examine and propose solutions to problems that others might have already given up on solving.

8 Powerful Ways to Create a Culture of Innovation [Podcast]

Innovation is often discussed as an activity available only to a select few people or companies. but it is an incredibly powerful tool for companies, especially when we seek ways to use our HR influence to drive a culture of innovation.

[Click here to listen to “8 Ways HR Can Drive Enterprise Innovation“]

In this episode of the We’re Only Human podcast, we point out 8 key ways that HR leaders can create, reinforce, and drive innovative behaviors in the business. In addition, we cover two common ways that companies kill motivation and innovation with their human resources practices. Continue reading →

3 Examples of Evidence-Based HR in Action

evidence based approach to hr

Last week I had the pleasure of presenting a workshop based on metrics, evidence-based HR, and change management. The session was a lot of fun, because we were able to tie the three topics together in a variety of ways to help reiterate not only why each of them matters, but how each of them can really build value when used in conjunction with one another. HR is often using anecdotal information (if any at all), conjecture, and pure hope to make decisions, but we can do better. Today I want to go a little deeper than my post last week on “keeping up with the Joneses,” focusing more heavily on the evidence-based HR piece.

Note: We covered a relevant topic recently on the podcast: 3 Examples for Measuring HR’s Business Impact.

If you’re not familiar with evidence-based HR, here’s a primer:

Evidence-based human resources is the practice of identifying solutions and approaches that have a strong empirical basis.

In other words, we don’t just use gut instinct, an interesting anecdote, or anyone’s opinion to make our point. We use data and other solid evidence to support our decisions at every possible turn. But where does that evidence come from?

Sources for Evidence-Based Decisions

Here is a list of sources I offered the audience as credible options for finding research materials:

  • Management journals (scholar.google.com)
  • HBR
  • SHRM Foundation
  • Deloitte/Bersin
  • i4cp
  • CEB
  • ATD
  • CIPD

If you just do a quick Google search for one of these organizations and the topic you need to research, you’ll more often than not find something to help make your case. I actually had participants do this during the session, focusing on areas like recognition’s impact on productivity (definite linkage), using talent pools for faster hiring (no data we could find), and other relevant HR activities.

Be careful not to just grab a story of a company that is doing neat things and grabbing headlines, because that’s not enough to warrant good evidence. You want to find information from a study or some other data-backed approach that helps to lend credibility to your eventual decision. If it’s just a neat anecdote, then you’re really not improving the process any more than just making a decision based on gut instinct.

Making an Evidence-Based HR Decision

There are six key steps to making an evidence-based decision in the workplace.

  1. Asking: translating a practical issue or problem into an answerable question
  2. Acquiring: systematically searching for and retrieving the evidence
  3. Appraising: critically judging the trustworthiness and relevance of the evidence
  4. Aggregating: weighing and pulling together the evidence
  5. Applying: incorporating the evidence into the decision-making process
  6. Assessing: evaluating the outcome of the decision taken

Using this approach can help you to not only leverage evidence, but think critically about how valuable the evidence might be relative to other sources of data and information about your problem. Instead of going with the normal approach of “Bob said this worked at his last company,” we can use more credible sources of information to frame and resolve the issue.

Examples of Evidence-Based HR

Seeing this practice in action is the most powerful way to really “get” the value it can offer. I originally was turned off by the idea of having to research everything HR does on a daily basis, but in reality we make relatively few key decisions like those an evidence-based approach to HR would help with. For instance, New York spent more than $75 million on teachers to help increase student performance and teacher satisfaction. The result? No improvement. There is already data available that could have shown that this kind of approach has not yet been proven to deliver strong results (this examination of multiple studies still came away inconclusive, or “cautiously optimistic,” calling for additional research). Despite the lack of evidence, someone went ahead with the program anyway.

Here are a few examples of how it works in practice.

  • Selection Techniques-Your hiring managers are often used to creating high pressure interview situations to “see how candidates will respond.” They also like using tools like application data and GPA to filter out candidates. You find research that demonstrates the validity of their methods is in some cases no better than performing a coin flip to make a hiring decision, helping to sway them into using more structured methods and assessments for hiring decisions.
  • Employee Recognition-One of your managers is resistant to using recognition because “everyone can’t get a trophy” and she doesn’t want to “coddle” her workers. You find some existing research that points to the value of recognition not just in increasing worker satisfaction, but in increasing productivity as well, helping the manager to see the benefit to her and the team by improving her recognition skills and practices.
  • Performance Management-One of the trends in the US is “disposing” of the traditional approach and taking a different avenue for rating and assessing performance. You want to make this move with your company because you feel like your existing process is not adding organizational value. There isn’t much data, if any, available to support the different approach, but there is some data showing that collaborative environments support better teamwork and cultures than those focused on forced ranking and distribution of employees.

Leveraging research can drive immense value across the board, even for organizations outside the private sector. For instance, the Warner Robins Air Logistics Center, which repairs military aircraft for the US Air Force, used new research methods to speed repair processes for C-5 aircraft, allowing reductions in working capital of approximately $50 million (source: Deloitte).

While many of us aren’t working hands-on with aircraft, we still have the company’s largest budget item, its people, under our purview. Isn’t it time we started treating them like the valuable assets they are, managing them to the best of our abilities with the most relevant research and information available?