-Introduction – description of self Been in flexible staffing for over 20 years – as both a strategically using and laterally directly providing and advising on levels etc. -
The labels of temporary staffing, contingency staffing and flexible staffing are frequently used interchangeable by the general business community. People think that these 3 concepts mean pretty much the same thing, but in fact there are differences to the practical application and the business impact of these 3 types of staffing services. While temporary staffing and contingency staffing generally are often used by companies to meet their staffing needs, it is the concept of “flexible Staffing” that holds the key to delivering measurable results.
Temporary staffing is traditionally……
Contingency staffing – 3 categories The Traditional Temporary Worker – Millions of students, Teachers, retirees and parents with young children choose temporary work because they are either unable or unable to make a permanent commitment to a single employer – they work on a short term basis, generally a few weeks or months, primarily to supplement their income – It is estimated that 20% of staffing firm employees are made of these type of workers The Transitional Workers It is estimated that 55% of a staffing firms employees are made up of these type of workers using temporary work as a bridge or a means to permanent employment, maybe re-entering the work force after being laid off, transitions from welfare to employment or simply having quit their previous employment with the expectation of finding something better. Transitional workers use temporary work as a way of gaining more experience or to get their foot into an organization The Long Term Workers make up about 25% of a staffing firms employees and are those employees that are out on long term assignments – they tend to be higher level and more skilled positions and are staffed by individuals who have been previously contractors or slef employed and enjoy the flexibility of these types of assignments.
Many large organizations today deliberately plan to have a reasonable amount of their workforce staffed with contingent workers. Having a number of long-term contingent workers, but don’t truly understand why or whether those amounts are needed or in line with the workload requirements. Flexible staffing wraps the concept of “temporary help” and “Contingency Staffing” in a strategic parcel. The concept of flexible staffing conveys that contingency staffing is most valuable when used strategically as a supplement to the permanent workforce and not simply as a quick fix for absent employees or to help during downsizing or when we have restricted budgets.
The concept of flexible staffing should be compared to “just in time” concept of inventory control or delivery in the manufacturing and warehouse businesses, with the use of flexible staffing arrangements to provide “just in time labor” – giving employers the flexibility to adjust labor requirements to meet product and service demands - giving a competitive edge over those companies with a less flexible workforce and therefore higher operating and productivity costs.
A company must identify its base permanent workforce. The base workforce is made up of workers that are pivotal to the companies success. But how do you decide who is really pivotal? You need to start by understanding that in most businesses not all employees are created equal. Certain employees play a disproportionate role in creating value. Value is based on both the role that the employee plays and their contribution in that role to the business – start by: Identifying the Job families that you have within your organization – here is an example of a “front of House” job family chart Then identify the value of those job families based on the impact they have on the business and ROI that they bring continually.
Once you have determined the value that each of these job families play in the organization - you then need to drill down to determine the value impact each individual has within that job family Grade the employees by grouping them based on the value they bring: A = Top performers within the job family – highest quality and highest productivity B = Mid-level performers with a job family C = Bottom level performers within a job family Looking at both their productivity and their quality of work This will allow you accurately grade all workers within your organization But how do you know if you are over or under staffed?
When analyzing to determine who makes up your current workforce and the fit against productivity and expectations you should always remember to adopt the 80 / 20 rule of productivity – not relying on the old forms of productivity measurement …… are they walking or running down the corridor or did I need to replace that person when they called in sick??!! Studies have shown that employees generally work at 80% of their ability level leaving 20% or their effort up tapped meaning that you are actually only achieving 51.25% of productivity. If your workforce has 80% of the right skills and 80% of the right knowledge and 80% of the right behaviors then you would assume you would get 80% productivity – but you will actually only get 50% - why? Because the productivity is the product of a mix of a persons skills, knowledge and behavior – the three cornerstones of productivity – therefore productivity is really 80% x 80% x 80% - equaling just over 50%
In order to then affectively calculate the workforce to the workload you need to be able to calculate the workload in man hours – this calculation can be adapted to most functions within a businesses environment so long as you know what the out put requirements are for the area you are looking at – for example…
Having followed steps 1 and 2 you will be able to effectively calculate the workforce to workload requirements within each department. Every business experiences workload peaks and valleys to some degrees, some specific industries and job functions experience “swings” of business and slowness. Many companies though don’t step back and fully analyze the patterns of their workload and more importantly how their staffing strategy embraces these workload swings. Using the information you have gained from steps 1 and steps 2 you should be able to accurately map and chart your staffing level needs and the workload requirements – the example here shows – Horizontal line across the page is the actual man hours that the organization currently has – the fluctuating line is the workload requirements – fluctuating in line with the peaks and valleys of the business. As can be seen with a fluctuating business there will always be times when your workforce doesn’t meet the requirements of the business and therefore increased costs are realized through overtime payments / short notice staffing increases and backlogs of orders / delivery failures – then also on the opposite end – times where the staffing levels out way the levels of businesses meaning increased costs in salaries and idle time of workers.
When a company is either over or understaffed or when staff are only being utilized at 80% of their capacity due to workload fluctuations there is a direct impact on the companies bottom line. Managing the balance between your workforce and their associated workload is challenging. Companies tend to staff for peak periods, then when the workload declines staff are simply not able to utilize their time effectively. By Using flexible staffing to offset these trends you are able to consider who you use in your workforce on both a permanent and a contingent basis and when you should utilize these people. The key to achieve measurable results in cost savings and productivity efficiencies is to strike the perfect balance between your varying workloads and staffing levels. You need to analyze the organizations most effective blend of permanent and contingent workers and conclude if your workforce is overstaffed or understaffed and what if any permanent headcount adjustments should be implemented along with When and Where contingent staff are required. If we look back at the fluctuations of business we had in the workload to workforce chart we showed earlier we can see where changes and cost savings can be made.
Remember this shows that in this fluctuating business there are both time when we are over and understaffed – both having a direct affect on our bottom line and profitability of the business as well as on the productivity levels. Based on this information we are able to determine what the optimal headcount should be.
What would happen if we achieved the optimal headcount for our business and utilized flexible and contingency staffing more affectively and to it’s full potential.
As you can see from the above – by mapping out our business fluctuations and out workforce to workload requirements we are able to identify that the permanent levels of staffing can be reduced to a more efficient and effective level – However we still have the needs of the fluctuating business to contend with – by effectively planning and mapping our business we can see where, when and what levels of flexible staffing needs we have – building in our contingency and flexible staffing levels to affectively assist with the business fluctuations. Continuous monitoring of workload and commensurate staff requirements is the key to sustained productivity and profit gains. First Line managers are then able to manage more effectively and contribute to the achievement of cost reduction and increases in quality and service levels – adopting this system allows that to continue and adapt with the business on a week by week and month by month basis.
Most organizations at some point will use contingent and flexible staffing but not in a measurable or strategic way – allowing for the benefits to be truly realized. Flexible staffing can be beneficial in so many ways to your business if used correctly and planned strategically as hopefully we have demonstrated through these slides. Cost Saving – Organizations save costs by directly reducing their overhead associated with employees – such as: Benefits, Equipment, facilities – as well as indirect cost reductions such as the cost of complying with regulatory employment issues. Market Flexibility – By using flexible staffing a company can respond more flexibly to competitive pressures. If business is booming, contingent workers can be added as needed to handle the extra work until the company is confident that the workload and business will sustain additional employment and an increase in permanent workers. If profits are significantly down, contingent workers can be easily removed without a loss of morale and bad press associated with staff lay off’s, if a company wishes to get into a new line of business with a minimum risk and investment – contingent workers can be a quick and low-risk staffing alternative Infusion of specific expertise on an interim basis – If a companies need for specific expertise is irregular – contingency workers may be a sensible alternative to hiring permanent staff that will ultimately be underutilized. Contingency workers used for this reason often provide cross-fertilization, introducing new working methods or new technologies that the company might not have considered before. A method of trying out potential New Employees – The US National Association of Temporary Services estimates that 1 out of every 3 temporary assignments leads to permanent work – hiring a contingent worker can be an ideal strategy for determining the individuals skills, knowledge and behaviors before hiring them on permanently
Every company wants to see a return on their investment – and as with any part of your business this needs to be measured and recorded correctly – but you need to remember with staffing the ROI is not necessarily the pure cost of recruitment and you need to factor in several areas such as : Cost of rapidly staffing up – what would it cost your internal HR function to bring on 100 people for a 4-5 weeks period? What costs are actually involved in this? What happens if they are not able to find the workers? Do you have sufficient staff to hire such large numbers? Can your internal payroll handle an increase of this amount with a decrease 4-5 weeks later? Scheduling – who in the organization will project manage this? Who will communicate with all the additional workers regarding shift, start times, finish times etc and then submit and record their hours and administer their payroll? Flexibility of business commitments – What is the cost of having too many or too few workers in your organization? Can be broken down into two main areas: Productivity Savings – though correct staffing levels at all times – Statutory compliance costs – arising from the over staffing or termination of workers on-site We are confident that is Flexible staffing is strategically planned at all times the ROI to the organization can be significant and realized very quickly.
There are TRUE benefits to flexible staffing approach
So in summary – there is an art and science to flexible staffing and if strategically planned into your business it can be benefit and efficiency and not a “necessary evil” as seen by some……. Remember the key points:-
The Art & Science of Flexible Staffing
THE WEBINAR WILL BE BEGINNING SHORTLYThe Art & Science of Flexible Staffing
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About Our PresenterSian DawsonRegional Manager – Eastern Canada• 20 years of global HR Experience• Strong focus on flexible staffing• Strategic advisor to HR Managers on flexible staffing
Temporary StaffingTraditionally, short-term workers were brought in to meet an immediate staffing need such as vacations, illness, maternity coverage etc.
Contingent StaffingHiring of staff for longer durations and to meet more strategic business needs Includes consultants, contractors, freelancers, or temporary staffContingent Workers fall into 3 Categories: The Traditional Temporary Workers The Transitional Workers The Long-Term Workers
Flexible StaffingStaffing is a strategic business concept– Having analyzed workload to workforce– Allowing “Just in Time” labor and business staffing flexibility
Would You……Order more or less raw materials than you needed for production? So why do we do this with our workforce?
Flexible StaffingHow do you ensure your flexible staffing will meet your staffing and business needs?
Consider the Following• Are you forced to let go of top performing employees during slow periods?• Do you know the real cost of employing and training contingency staffing at each peak period?• Does the introduction of new contingency staffing during peak periods distract managers and existing employees?
Adopt the 3-Step Approach to Achieving True Flexible Staffing1. Understand who are the core pivotal workers in your current workforce.3. Measure and record your workload and your staff hours.5. Staff to achieve an ‘optimal’ headcount. Manage your workforce to align with your workload.
Step 1 – Understand your Workforce Who are Your Pivotal Permanent Workers?
Step 1 – Understand your Workforce Who are Your Valued Performers?
Step 1 – Understand your Workforce Evaluating Individual Productivity
Step 2 – Workload to Workforce Measure the Workload and Staff HoursWorkloads:Use the basic labor productivity ratio to measure workloads in labor hours:Productivity Output e.g. claims / labour hour Input loads / labour hour payments / labour hour widgets produced / labour hourFor example if the workload out put requirement is 1000 claims @ 5 claims per hour(anticipated productivity) then staff hours required is 200 hours.
Step 2 – Workload to Workforce Measure the Workload and Staff Hours
Step 3 – Staff for Optimal Headcount• Over and under staffing directly affects your bottom line• Workload fluctuations cause poor productivity: Over worked – low productivity Under worked – low productivity• How do you achieve the Optimal Headcount?
Strategically plan your flexible staffing• Cost Saving• Market Flexibility• Infusion of specific expertise on an interim basis• A method of trying out potential new employees
Strategically plan your flexible staffingMeasure Your ROI:• Cost of rapidly staffing up• Scheduling• Flexibility of Business Commitments – Productivity Savings – Statutory compliance costs
The Benefits of a True Flexible Staffing Approach:1. Increased return on investment in staff achieved by aligning staff numbers to workload2. Increased flexibility to respond to changes in the marketplace achieved by quick access to specific expertise for defined periods of time.3. Informed decision making capability to changes staff levels based on financial impact.4. The decision to adopt this approach can also be assessed on the most likely net benefit before any significant investment is made.
In Summary1. Understand who your core pivotal workers are.2. Measure your workload in hours using an achievable productivity rate.3. Determine the optimal perm staff level and make appropriate changes to permanent staff levels also considering qualitative factors.4. Staff up to the workload peaks with flexible staff.5. Identify and eliminate the causes that led to staffing above your workload in the past.6. Measure and start again – continuously improve the productivity rate.
Contact Information Sian DawsonRegional Manager – Eastern Canada Drake International email@example.com 613.938.4777 Jay Rosales Drake International firstname.lastname@example.org 416.216.1070 (Direct)
Special OfferWe are pleased to offer you a FREE consultation onyour organization’s workforce level.•No Obligation•Strictly ConfidentialContact Sian to takeadvantage of thisexclusive offer!
Upcoming Events Webinar Next March 8th, 2012, 12:00 pm EDT to 12:30 pm EDT LMS Selection and Implementation for Associations >> Presented by David Dineen, Manager, Talent Management Solutions, Drake International Register at http://drake-webinars.com