In 2010, HCI conducted extensive research into the the depth of integration of the contingent workforce into organizations. The resulting report, Contract Talent: Are Contractors Included in Strategic Talent Management Initiatives?, highlighted the most common practice, that the integration by in large stops after acquisition, and showcased rare best practices. One of those was the inclusion of CT usage and need into the strategic workforce plan.
Workforce planning focuses on the strategic front end of the talent wheel, but also has impact throughout integrated talent management. The first step in alignment is to synchronize business strategy to human capital strategy. If this is not done, talent becomes disconnected from the focus and direction of the organization. All strategies have ramifications for the human capital of the company, so they must be documented and articulated. When a human capital plan is in place, the impact on the workforce can be addressed. When this is done properly, the rest of the Talent wheel works more effectively. Talent practices are aligned and focused on what is important for the present and future success of the enterprise.
The workforce planning process starts with the organization’s strategy and objectives. It then defines the critical roles or jobs that are required to execute the strategy, as well as the individual competencies for these roles. Once these requirements have been defined, then the supply and demand of talent is addressed. Both internal and external factors are considered. Finally, the strategies for closing the gap are delineated through the alternatives of buy, build or borrow.
The critical part of the workforce planning process is that it must be anchored in the strategy of the organization. If workforce planning is divorced from strategy it is useless, or worse, even harmful to future success. Everything flows from strategy.
The majority of respondents in the original survey, 64%, reported that they do factor both for contract talent and its availability into their overall workforce plan. While this indicated a positive progression for the integration of CT, the result was puzzling in the context of other responses. For instance, when asked if they had an enterprise technology or system to view metrics and statistics like cost, headcount and contract personnel data, only 35% of respondents said yes. This didn’t vary dramatically based on enterprise size or industry, and appeared to be trending upwards, as a similar question asked in 2009 revealed only 25% of respondents were using a vendor management system (VMS).
These two statistics are intriguing when considered together. How effective can an organization truly be at factoring for CT in the workforce plan if a full quarter of respondents don’t have an enterprise system to even know how many workers are engaged at one time?
“Across the board we need to get better at identifying when roles should be filled permanently versus contracted and how much we’re spending. But right now we’re lacking central oversight and technology to manage this aspect
and make these decisions,” said Greg Muccio of Southwest Airlines in an interview for the research.
Other companies interviewed described outside factors, like the Great Recession, as fluctuating too wildly to plan effectively, or bluntly asked, “What’s workforce planning?”
“We ask, what is our core workforce? What is our most strategic need? We allow that 20% of our workforce will be contingent, and this allows us to scale up and down based on our business,” advised Tim Keefe of CH2MHill.
Elizabeth Mashakas, Director of Recruiting for Orbital Sciences, concurred. “We plan for 10% of our workforce to be contractors; if things get lean, we have ways to reduce labor spend. We also review our upcoming programs and decide on staff appropriately- if the program is for less than a year, for instance, it doesn’t make sense to bring in talent we may not need full time. We don’t want to be in a position where we have to let go of the permanent workforce.”
Mark Cooper, Senior Vice President at Aerotek, an underwriter of the 2010 report and a subsequent report on finding quality in contract talent selection, will share his expertise and experience on flexible workforce planning in a talent shortage in an upcoming webcast.
Image: la fattina