Project-Centric Organizations: The Impact on Recruitment and Retention

Because roles in today's organizations are increasingly defined by projects rather than traditional functions, skills forecasting becomes a vital tool in recruiting and maintaining the right talent in both permanent and contingent workforce. In this changing environment, HR leaders must be prepared to take a new look at its responsibilities.

Sunday, October 1, 2006
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As organizations shift from functional working structures to a project-centric structure, new challenges arise in recruiting the right people for the workforce and retaining those with essential skills that fit core-competency needs. It is essential to sort out long-term and short-term skill-set needs and to know when to bring in contingent labor as opposed to hiring full-time employees.

Develop a strategic human capital plan

Skills forecasting is a crucial component of human resources planning in project-centric organizations. HR's recruiting function should work with the company's project-management structure to identify the types of skills that are needed and to have them available at the right time. This means putting in place a strategic human capital plan that clearly lays out immediate and future workforce needs.

Core competencies

A key process in establishing a strategic plan is determining what the organization's core competencies are -- the skill sets required for foreseeable projects -- and what kinds of skills would be more efficiently brought in only as needed. The recruitment of full-time staff is then defined by core competencies, whereas skills required only for specific projects should be brought in via contingency, or contract, staffing.

As an example, let's say your company is migrating from a mainframe-based COBOL system to a server-based environment. Future projects will be based on the new platform, but for some indefinite time you will still have projects running on the old system.

It would make sense to decide that COBOL programming skills are no longer a core competency, and legacy projects involving COBOL programming might well be outsourced or handled, as needed, by contingency staff. Recruiting full-time staff, on the other hand, should aim at hiring employees with skills in the new platform.

Internal mobility and retention

When good employees leave their companies for others, it's usually because they don't feel there are sufficient opportunities for growth or career advancement.

A strategic, project-centric human capital plan can enhance workforce retention by identifying the kinds of job roles that are coming up in future projects and making it possible for workers to move into those they find exciting or beneficial.

One serious challenge, though, can come from managers and supervisors who do not want to lose their key people to opportunities outside their department. It is HR's responsibility to persuade managers that internal mobility is of value to the company as a whole -- that without it, the organization stands to lose its best people when they are unable to move upward or grow their skills within a given department.

What kind of people should be recruited?

Project-centric organizations require changes in the criteria for selecting new recruits. Traditionally, recruiters tended to look for people with specific functional skills for any given job. For example, if a position required someone with proven competency in financial reporting, that may have been the yardstick against which applicants were measured, over and above all other considerations.

In the project-centric environment, certain behavioral skills are also highly important. Teams are pulled together for specific projects and employees often find themselves shoulder to shoulder with people they've never worked with before. They complete a project and move on to another, for which they may be teamed with yet a different set of co-workers.

This puts a premium on employees' ability to work collaboratively and adapt readily to new assignments and new teammates. They must also have the capacity to learn quickly, to ramp up their skills as needed.

The recruiting function must be able to determine the behavioral qualities that are crucial in a collaborative environment and how to screen job applicants for those qualities.

The contingent workforce space: a new role for HR

Changing to a project-centric human resource model pushes HR into new territory, requiring HR to play a role in the procurement of contract workers. The recruiting function spills over into the area of contingent staffing because strategic decisions must be made about hiring full-time employees versus contracting out positions.

For example, a project manager asks that a new Java developer be brought on board. HR needs to be involved in determining whether the position should be contingent or full-time, based on the strategic human capital plan. If it turns out that the position should be filled by an outside contractor, HR may or may not need to be involved in the procurement.

The argument for involving HR in procurement functions is based on the fact that how a particular position is filled is similar for a contractor and for a full-time employee. HR's recruiting staff has the hiring skills in place, so why not let them handle the process in both types of cases?

On the other hand, dealing with outside contractors involves complicated issues that are not traditionally HR functions.

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Vendor management is one such issue: knowing who the reliable vendors are and how to work with them most effectively.

In addition, there are the legal issues around the role and treatment of a contingency workforce, as exemplified by the widely known Microsoft "permatemps" case. Contractors and employees must be treated differently in certain specific ways; if not, contractors are legally entitled to receive the same benefits as full-time staff.

As HR moves into the contingent-staffing picture, an organization still needs to have a contractor procurement/legal function in place. It is critical that the role and responsibilities of HR and contractor procurement be carefully and clearly defined.

Implications for HR

As HR departments navigate the changing environment of recruitment and retention in a project-centric organization, they need to pay attention to four important issues:

Improving reporting and metrics: Reporting and metrics are not usually HR departments' strong suits, but they are indispensable tools for forecasting skill set needs and making long-term human resources decisions.

Developing procurement skills: HR people should be able to handle some of the procurement functions associated with contingent staffing -- not necessarily contracting per se, and not legal functions, but in certain areas of vendor management.

Building effective collaboration within HR: All too often, recruiters and HR generalists see their objectives from conflicting perspectives. Moving into a project-centric model means they need to work together collaboratively, for example in strategizing for internal mobility. Recruiting and HR generalists cannot afford to be siloed functions.

Aligning with project management: To play its role in skills forecasting and resource strategizing, HR must strive to be "in synch" with the Project Management office or other project governance bodies of a company.

HR needs to know what kinds of skill sets are needed for projects in the pipeline, and what, exactly, the requirements are. If the call goes out for a project manager, recruiters must understand the expectations for that PM in specific terms. If a senior Java developer is to be recruited, recruiters have to know what "senior" means in the job title: a certain level of experience and/or competency with Java? ? the ability to serve as a project lead?

In short, HR must be prepared to make changes that will give the company value-added human capital service for the transition to project-centric organization.

Fumiko Kondo is managing director at Intellilink, a boutique consulting firm specializing in automating knowledge-worker organizations. Her areas of expertise include talent management, resource management, IT governance and organizational change. She can be reached at

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