As more companies grapple with the challenges of talent scarcity a new strategy of Total Talent Management has emerged as a viable solution - ensuring the right workers are available in the right place at the right time. This strategy strives to balance traditional employees with flexible workers under a holistic planning framework. Early adopter organizations are learning they must become a "client-of-choice" in order to attract and retain the flexible workers they need. Procurement organizations have a critical role in achieving a successful outcome in the increasingly competitive environment.
How Did We Get Here?
Over the past decade a complex and interrelated web of trends have collided into a perfect storm which is impacting organizations across all industry sectors and regions, particularly those that rely on skilled knowledge workers to get vital work done.
These significant demographic trends have impacted the workforce supply:
Baby Boomers - the second largest and best educated generation in the history of the US is now beginning to exit the workforce. Many still want to earn incomeâ€¦on their terms!
Post-Boomer generations - Generation X and Millennials (the largest generation just entering the work force) view work very differently.
"Non-traditional" households - as defined by the US Bureau of Labor Statistics, are now the majority (83%).
Unemployment - we are near historic lows for unemployment of college graduates, particularly those with professional or STEM degrees.
Life expectancy - continues to get longer, meaning we'll need more income in old age, especially as the cost-of-living also increases.
Birthrates - are decreasing across the globe, limiting long-term supply of the work force.
There are also dramatic firmagraphic trends which have changed the workplace environment and the demand side of the equation for talent:
Service economy - the majority of the US economy is now services-based, as opposed to manufacturing. Brainpower is literally more valuable than bricks & mortar!
Economic conditions - economic uncertainty and rapid fluctuations are the new normal.
Change & Complexity - driven by technology innovation, we're seeing unprecedented business disruption.
Outsourcing / Offshoring - as wages begin to normalize across the globe, the significant cost savings once associated with sending work overseas are now more difficult find.
Corporate conservatism - as a result of all these rapidly evolving trends, organizations are forced to be more conservative when it comes to adding overhead.
The above evolutionary factors have in turn created a complete psychographic revolution within the workforce. The changing nature of work, and the resulting "new" workforce are fundamentally different than anything we've ever seen:
Diminished loyalty - a bi-directional decrease in loyalty, meaning companies can no longer promise workers employment for life; while more workers want the variety, flexibility, and control that come with being independent.
Changing nature of work - work itself has become more deliverables-based or
"projectized", versus a role that is filled to complete a process or task
Career Definition - a professional's career is now commonly viewed as a successive series of engagements, or "tours of duty", versus one job held for many years.
Today's Market Reality for Talent
As evidenced above, the talent equation has fundamentally shifted. Today's knowledge workers are in more control than ever before, and they have options. Many of them want to be independent, free from the shackles of traditional employment and also free from any agency representation. For companies, those with the best talent are in a much better position to dominate their markets. This represents new, and uncharted, territory for organizations that must attract and retain flexible talent.
Procurement organizations have historically played a significant role in sourcing and managing contingent labor suppliers and programs. Due to its large volume, complex agency supply chain, and significant cost impacts, the management of the temporary labor segment was often assigned to procurement. Most Human Resources groups were happy to abdicate oversight of this segment of the workforce so that they could focus on recruiting, hiring, and managing regular employees of the company. Human capital management, led by HR, emerged as the management framework for doing this.
Under the umbrella of Total Talent Management, Procurement organizations must now partner with their Human Resources colleagues to create a framework for managing the organization's entire talent chain. To do this they must also create a new, singular, company recruiting brand. In times past the focus was on becoming the "employer-of-choice", in the new era of talent scarcity it has morphed to becoming a "client-of-choice"!
How Procurement Can Help the Organization Become a Client-of-Choice
At Synergy Services we work with a number of procurement organizations leading the transformation of their organization into a client-of-choice. Often Procurement has been through a transformation itself and is sensitive to the political and process land mines, and can be a valuable business partner to a group newly embarking on this journey. A few proven best practices:
Partner with your HR, Legal, and Financial management colleagues to build a leadership coalition that owns Total Talent Management for your organization. Much like you might rationalize a supply chain, evaluate the human capital supply chain for the organization. First, look at the work performed across the organization by your current workforce. Then evaluate the workers required to do it. How much of the work really needs to be done by traditional part-time and full-time employees? Consider what work could be done better, or more cost effectively, by temporary workers, freelancers, Independent Contractors, or Consultants?
Projectize the work. Once you have an idea of the work that needs to be done by employees versus flexible project workers, you can then start to redefine "jobs" into more discrete deliverables that will be delivered on an SOW basis. To accommodate flexible workers, forward-thinking companies are recasting traditional job descriptions from competencies and skillsets, to outcomes and deliverables.
Focus on value. Recognize that Total Talent Management is not just about cost-savings. Your objective should be to optimize the traditional value equation of quality, service, cost within the context of a knowledge worker:
Quality is the expertise of the worker
Service is the results they deliver
Cost is not just their direct cost, but the time it takes to get the work done, and any additional indirect costs.
Streamline on-boarding. Many companies choose to partner with an Independent Contractor Engagement Specialist that brings proven processes, technology, best practices, and engagement options for the flexible workforce. Be careful not to force individuals into engagement solutions that they are not comfortable with as it will cause disruption and low program adoption. Also, focus on making the contracting process and SOW creation easy.
Make it easy to be a vendor for your company. It is important to recognize that many flexible workers are truly a "business of one". Is it a reasonable requirement for them to have the same levels of business insurance or to accept the same payment terms as your traditional large services providers? With increasing frequency we're seeing contractors electing not to accept projects due to overly burdensome vendor requirements. Remember, top talent has many choices in today's economy!
Manage your risk. Engaging flexible workers can introduce unwanted risk to the organization if not done carefully. Worker misclassification and co-employment are very real business risks, however they are fairly easy to mitigate with the right engagement program in place.
Reward good work. Aside from competitive remuneration, the best reward for flexible workers who do good work, is more work! One way to do this is to build a talent community of proven resources that you can leverage for future projects across the organization.
The above best practices are helping progressive organizations and their Procurement teams to become a client-of-choice in today's ultra-competitive talent market. Which ones will you introduce to your company?