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Contingent Workforce Growing
A new report says the contingent workforce is expected to grow to 10 percent of the entire U.S. workforce population within two years, but most companies may be unprepared to manage them because of a lack of collaboration in the process.
A new report predicts that within two years, 10 percent of the entire U.S. workforce will be made up of contingent workers, with pharmaceutical, biotech, and retail sectors experiencing the largest growth in temporary and contract workers. According to 2007 Staffing Buyers Survey, released by Staffing Industry Analysts, Fortune 1,000 companies "will expand [the] use of contingent workers to manage variable or unpredictable workloads, to handle the strong overall growth at many companies," and to cope with the difficulty of finding quality workers in a low-unemployment environment. "As the contingent workforce grows," says Barry Asin, chief analyst of Staffing Industry Analysts, based in Los Altos, Calif., "corporations will need to be much more sophisticated in managing this increasingly large expense." "To handle this growth, corporations must look closely at crafting a well-conceived contingent-workforce program, leveraging technology, and assigning talented managers to oversee this area of operations," he says. According to the report, 77 percent of the companies surveyed expect to grow their contingent workforce in the coming years. It also found that decision-making about the contingent workforce is currently dispersed across several different corporate levels, and the typical manager with responsibility for contingent labor decisions spends only 20 percent to 39 percent of his or her time on this task. The report also found that procurement managers, rather than HR professionals, will increasingly control the management of contingent-labor programs -- a notion one expert thinks could lead to trouble. "Procurement [managers] approach buying people in the same way they approach buying pencils," says Elaine Taylor, a contingent-workforce industry analyst and principal of eTaylor Consulting Inc., based in San Francisco. While a contingent workforce allows companies to put elasticity in the budget, "companies leak millions of dollars annually because they do not effectively manage their contingent workforce," she says. Such losses, she says, are not typically a result of fiscal irresponsibility. "It's not intentional, it's just not on their radar screen," she says. "There isn't a contingent-workforce department in virtually any large corporation. "[Contingent workforce management] is a multi-faceted discipline," she says. "It's part HR, part procurement and a big part, legal because of huge risks associated with security issues." Achieving a successful program will be difficult without bringing all the company's key stakeholders together in a joint effort, she says. "Since 1997, I have never seen a company have a successful [contingent workforce] program unless they got a collaborative effort going," Taylor says. In addition to collaboration, companies must also focus on what she calls the "three Cs" of cost, compliance and control. The issue of compliance and the maze of tax and labor laws that are involved in contingent workers are the reasons that HR "will never be out of [contingent workforce management] business totally," Taylor says.
May 17, 2007 Copyright 2007© LRP Publications |
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