What Influences Contract Talent Usage?

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Bill Craib
Vice President of HCI's Center for Human Capital Excellence (CHCE)


With the flux in economies around the world, the style of talent used inside of organizations is a hot topic. Yet many organizations still see contract labor as a short-term solution rather than an integral part of their talent management strategy. In this original research & presentation from the Human Capital Institute, we'll address how factors like economic conditions, unemployment, and contingent program maturation influence why and how companies use contract talent.

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What Influences Contract Talent Usage?

  1. 1. What Influences Contract Talent Usage? A Spring 2011 Research Report from Human Capital Institute and Beeline Tuesday, May, 24 20111
  2. 2. Presenters ■  Meghan McVeigh, Program Manager, Workforce Mgmt Public Service Enterprise Group ■  Beth Perdue, Vice President, Strategic Solutions, Beeline ■  Bill Craib, Vice President , Human Capital Institute2 HCS Certification Course, V.3.0, 2010
  3. 3. About this research One-on-one interviews with senior practitioners from Spring 134 •  healthcare 2011 respondents • financial services • professional services Analyzed by: Percentage of CT in the workforce How far in advance CT needs are projected If there is an EWCTP in place Company size3
  4. 4. Keeping it temporary “Despite a surge this year in short-term hiring, many American businesses are still skittish about making those jobs permanent, raising concerns among workers and some labor experts that temporary employees will become a larger, more entrenched part of the work force.” Motoko Rich, NY Times, Dec. 20104
  5. 5. Use of Contract Talent increased during the recession... ■  Overall, 75% agreed that CT is used more during times of economic uncertainty. ■  A significantly higher percentage (87%) of those respondents with more than 5% of CT in their workforce agreed with this statement.5
  6. 6. Discussion Question: ■  Why does Contract Talent usage increase during times of uncertainty?6
  7. 7. ...and will have a sustained presence moving forward■  What percentage of your current workforce would you estimate to be Contract Talent?■  What percentage of your workforce would you estimate to be CT one year from now?7
  8. 8. Discussion Questions: ■  Is it inevitable that Contract Talent will continue to increase? ■  How does this impact the roles of the various stakeholders involved in Contract Talent within organizations today?8
  9. 9. Why is Contract Talent being used more now? “It is bringing in the technical skills necessary. It’s time to market “It’s cheaper to hire contingent workers, but also more flexible for – sometimes bringing in full-time staff takes longer. It’s a longer employers. If someone decides, ‘We need to be this size,’ it’s far decisioning process. If you can bring somebody in quickly who easier to do that with contract workers and temps." can get your initiative or backlog done sooner, it’s a more agile workforce that allows you to do more in a shorter period of time. Bill Kahnweiler So time-to-market is a big deal.” Associate Professor Department of Public Management and Policy Cynthia Moore, Co-founder Georgia State University VMS Professionals9
  10. 10. Key Influences to Contract Talent usage: Flexibility to quickly expand workforce Provides flexibility - able to quickly expand or contact our workforce Need specialized skill not available in our workforce Need experience that was not present in our workforce Want to reduce benefit, insurance and health insurance costs Want to reduce employment/payroll taxes Lower wage cost10
  11. 11. The rate of change and planning ■  Because of the constant change of business, its expansion and contraction, contract talent allows organizations to flex.11
  12. 12. Key Influences to Contract Talent usage: Ability to access skills/experience not currently available in their workforce Provides flexibility - able to quickly expand or contact our workforce Need specialized skill not available in our workforce Need experience that was not present in our workforce Want to reduce benefit, insurance and health insurance costs Want to reduce employment/payroll taxes “We don’t need a full-time person long-term, so we bring in top contract labor, particularly when we have project activity, to Lower wage cost cover those ebbs and flows of the workload. It is usually a particular skill in regards to the IT world, it’s something you know you can find in the marketplace more easily and quickly than trying to find an FTE.” Sally Ballard12 Regence Group
  13. 13. Discussion Question: ■  How do we make our Contract Talent programs better, even as they get bigger?13
  14. 14. CT Management becomingcentralized and standardized■  Increased use of Enterprise-Wide CT Programs and CT Tools such as Managed Service providers (MSP), Vendor Management Systems (VMS) and Independent Contractor Engagement Specialists (ICES)■  Each of these tools improve capabilities to effectively manage CT program and people “...in terms of being able to scale services like contract services across the organization, a Vendor Management System is critical to being able to do that. There was a time here at H&R Block where things were more decentralized. VMS helps from a reporting standpoint so that we understand what is our volume and how we can negotiate with our vendors to get the best prices.” Kimberley McDonald, Director of Talent Acquisition14 H&R Block
  15. 15. Discussion Question: ■  What aspects of Contract Talent as a talent management strategy have the biggest impact?15
  16. 16. Benefits of EWCTP & CT Tools Organizations with CT Tools Organizations with CT Tools % Agree That CT Program has: % Agree That CT Program has: The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again.16
  17. 17. Conclusion ■  Final thoughts from panel ■  Your questions ■  Look for more best practices and case studies on Contract Talent from HCI and Beeline in our series, Contingent Workforce in the 21st Century, on www.hci.org17
  18. 18. Thank You. Further Questions?18

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