The market ain’t what it used to be. Businesses and the economy at large were spoiled by the 25-year period between 1983 and 2007 where the U.S. economy spent only 6.3% of the time in recession. Fear and stagnation permeate the private sector with uncertainty about the world economy only growing. Some analysts have turned to pretty apocalyptic predictions of what’s to come. But before we start trying to Google the best place to buy oil drums to hold our precious grain and ammunition and decide which of our neighbors we would prefer to eat if things really get out of hand, let’s take a breath and think about this.
What are businesses doing right now to avoid the risks of hiring wantonly in this unstable environment? Why, using contingent labor of course! It’s flexible, it cuts down on long term benefits costs, and it seems that nowadays one can find almost any legal service for cheap. In 2005, it was estimated that about 31% of the U.S. workforce was considered “contingent” or temporary. While current data is a little murkier, most folks guess it could be anywhere from 25% to 40% and rising. This is all well and good but few organizations are really managing this growing portion of the workforce like the strategic asset it is.
In a recent discussion with Teresa Butson of Royal Bank of Canada (RBC) about an upcoming webcast, she mentioned that RBC can now ensure the quality of their contingent workers by using a stream of constant feedback and analytics between managers, executives and (of course) vendors. Because of their enhanced management of contingent labor, executives at RBC are now seeing it as a strategic tool for filling temporary demands, sourcing niche talent, trying before buying etc.
RBC is not alone in this kind of advanced management however, I have also been speaking with Brian Schubmehl of Whirlpool about how they have managed the risks of misclassified independent contractors thereby allowing them to treat their contractors as an addition to their current talent pipeline.
Organizations like RBC and Whirlpool will continue to develop increasingly sophisticated methods of supplementing the traditional workforce with contracted workers. The advantage being that they have the ability to judiciously and quickly respond when there is a need to scale up their workforces and shed them just as easily in a contraction. This strategic use of contract talent therefore leaves the vast majority of the permanent workforce untouched and not as demoralized as they would be after a traditional round of layoffs.
Those oil drums filled with ammunition are starting to look a little less necessary aren’t they? Not to me of course, fortune favors the prepared, my friends.