Talent mobility and contingency manpower staffing

Freelance Total Rewards Effective Rewards for Global Talent
Talent Mobility and Contingency Manpower Staffing:
Essential Elements in Today’s Business World
THE FUTURE OF WORK AND BUSINESS
37th NATIONAL CONFERENCE OF EMPLOYERS
July 13-14, 2016 — Manila, Philippines

Managing Contract and Mobile Talent Requires 3 Things:
Collaboration
Competence
Calibration
(c) Freelance Total Rewards Pte Ltd Always seek qualified legal advice on any legal matters 2

COLLABORATION
Taking a multi-stakeholder approach

Look at All Perspectives
Free Market dynamics Governance
Customer Perspective Society’s needs
Company Needs Workers needs

Shared Prosperity through Training
You and your worker are making
two pairs of shoes per day.
Your competitor and his worker
are making one pair per day.
You can pay your worker more
than the other guy, AND still make
a higher profit.

Supply and Demand for Contract Work
SUPPLY DEMAND
• Planned needs
– Peak seasons
– Projects
– Major events
– One-time business activities
(inventory, product switch)
• Unplanned needs
– Disaster recovery
– Major unexpected order
– Repair
– Product recalls
• Unemployed
• Underemployed
– Lacking qualification
– Unable to work normal hours, etc.
• Specialists
– Skilled trades
– Professionals
– Performers, artists, athletes
– Freelancers
– Uniformed services
The Market

Agency/
Subcontractor
The Stakeholders
Contract
Workers
Company
(principal)
Supply
Demand

• Create a public marketplace for buying,
selling goods and services
• Add value for both buyers and sellers
• Background checks, verifying skills
• Invoicing, payroll, recordkeeping
• Foster competition
• Expertise in “matchmaking”
• Expertise in navigating regulations and
procedures
Agencies

10(c) Freelance Total Rewards Pte Ltd Always seek qualified legal advice on any legal matters
Staffing Services Industry

Two More Important Stakeholders
Worker Agency Company CustomersSociety

Benefits to Society
• Every American is now legally
required to have health care
• 37 million Americans were without
healthcare
• 8 million more Americans now have
health insurance
– Through their employers if working 30
hours/week
– Individually, if not employed
• Subsidies available
• Cannot exclude pre-existing
conditions
Impact on Employers
• Must provide “affordable” healthcare or pay a
$2,000 penalty per employee per year
• Papa John’s pizza – 29 hours/week
maximum to avoid the health benefit
obligation
• Many employers are taking the “off ramp”
and simply no longer providing employee
benefits
– Minimize employee headcount, pay penalty
– Compete on salary or other types of benefits
– Higher use of part-timers
• Robots, automation, vending machines
Impact Government Mandates – Affordable Care Act

• Yingluck Shinawatra promised higher
minimum wages if elected PM
• She won and announced a new minimum
wage of THB 300 in 2013
• No economic studies or dialogue conducted
• 7,221 businesses went bankrupt and closed
down (average of 3,000 previous 9 years)
• Many businesses moved to Myanmar
• Cost of living rose sharply
• Thailand has decided to end the 300 baht
minimum wage
The Importance of Government Dialogue

“No one ever helped the
caboose by hurting the
engine.”
—Abraham Lincoln
16th president of the United States

CALIBRATION
Finding the right balance

Contracting: an Ancient Practice
Matthew 20:1-15 Laborers in the Vineyard
• Some hired early, some mid-day, some late
• All agreed to a day’s wage and got paid
• Some complained it was unfair to pay a full
day’s wage to those who did not work a full
day (internal equity issue)
• Householder asserted it was fair to pay
what was agreed with each person

Contract Worker
 Has skills needed by an employer
locally
 Willing to work for a fixed term
 May not be employable in a field due
to lack of skills, experience,
education, etc
 Personal circumstances may limit
employment opportunities
 Short- or long-term reasons
 Range of skill/education levels
 Most occupations and professions
 Contract for services, not
employment
Mobile Worker
 Has skills needed by an employer
in another country
 Willing to work for a fixed term
 Lack of opportunity at home
 Adventure or personal reasons
 Professional reasons
 Short- or long-term reasons
 Range of skill/education levels
 Most occupations and professions
 Can be an employment contract,
contract for services or an
assignment agreement on top of
an employment contract
Characteristics of Contract and Mobile Workers
Both sign
contracts

A Legal Contract (general principles)
Is there mutual consent and capacity?
Voluntary and
Intentional
Are services promised in consideration of a payment?
Commercial terms
Is the deal exclusive to any of the parties?
Exclusivity
Is the agreement open-ended, or for a fixed term?
Duration
Is this type of contract legal?
Legality

Contract Worker
Contract to commit a
crime
Contracts to do unethical,
dangerous or harmful
things
Contracts prohibited by
other contracts, such as
union contracts
Contracts in excess of
quotas or other limits
Mobile Talent
Same as contract worker
restrictions, plus
Immigration limits or
restrictions, such as
All HR managers in
Indonesia must be local
Foreign workers cannot
exceed x% of total staff in
Singapore (by industry)
U.S. H1B’s limited to 85,000
Both can be Legally Prohibited

Segmentation of Contract Talent
More Skilled $$$$$ Less Skilled
Non-Core
Work
Core
Work
Engineers
Consultants
Performers
Skilled Trades
Armed Security
Engineers
Healthcare
Real estate
Attorneys
Loose association
or network of
independents
Freelancers,
experts for
hire
Retail/F&B
Construction
Office Staff
Agriculture
Factory
Call Center
Taxi driver
Truck driver
As-needed,
harder to
plan for
Extra hands
for peak
season or
mutual
agreement

Manpower PlanningManpowerRequirement(FTEs)
100
Q1 Q2 Q3 Q4
50
150
100
If contract workers were not permitted
Sustainable employment level
Focus only on cost, but will not have a well-trained or productive workforce

Recruitment Process Outsourcing (RPO) Services
• Recruitment process, e.g. employment, interviewing, etc.
• Flexible Workforce Management (FWM) solutions
• Workforce planning, supply/demand forecasting
• Blended workforce solutions
• Managed-services-provider programs (subcontracting security guards, cleaners, etc.)
• Contingent workforce services
• Employment brand management
• Outplacement and redeployment
• On-demand and interim resourcing
• Managed contract services
• Background verification

Mobile Nurses
20,000
125,000
278,083
REGISTERED/SENIOR STAFF NURSE
Monthly Salary in PHP
Philippines Singapore United States
(Estimate)
Sources:
Payscale.com
Singapore Ministry of Manpower
U.S. Bureau of Labor Statistics

World Economic Forum, 2012
“Talent Mobility is the physical
movement of workers within or across
organizations, industries or countries,
and globally, or the professional
movement of workers across
occupations or skill sets. Mobility may
be temporary or permanent and may
also involve moving people from
unemployed to employed, moving jobs
to people or allowing virtual mobility.”
People to jobs, jobs to people

Effective Rewards
• Pay for performance
• Performance variation can be significant
• Pay market value
• Productivity can be enhanced
• Training can pay for itself many times over
• Incentives can be self-funding
• Some earnings can be shared with workers
• Try mixing fixed cash, incentives and benefits
• Losing customers is also expensive
• Manage people effectively. You will need fewer people and you will fire less of them.
Supporting Productivity with Rewards

CALIBRATION
Finding what works for you

Striking the Right Balance
Quantity of jobs Quality of jobs
Maximum cheap labor Right mix of talent
Make talent Buy talent
Minimize Cost Maximize Value for Money

• A well-trained store clerk can outsell an
untrained clerk by multiples
• Assume clerk earns 50p per hour
• 20 hours, or 1,000p to train
• Sales performance increases from selling
5 items per day to 6
• At 500p per sale, it will take just 2 days to
cover your training investment
• In a year (260 work days), that’s P130k
more revenue
• Use a sales commission plan to reduce
fixed cost and breakeven faster
Cost or Value for Money?

Make Talent
• Hire young, inexperienced people
• Significant training investment
• Cheaper but longer learning curve
Buy Talent
• New hires must be experienced
• Minimal training provided
• More expensive but productive on day 1
Make versus Buy
26,000 employees (before Freescale merger)
<10 Learning & Development FTEs
25,000 employees
>100 Learning & Development FTEs

• World’s largest private company
• 55,000 employees from 70 countries
• 15% are expatriates
• $10,000 USD per employee training
• Corporate Manpower Planning Model
– Forecasts talent needs, anticipates gaps
– Identifies staffing strategies to fill gaps
– Looks out 10 years for 400 job families
• Priority for staffing
1. Local
2. Contractors
3. Mobility
100
200
500
30
20
20
50
300
4
4
150
80
800
40
30
300
ENGINEERS TECHNICIANS FIELD OPERATIONS FINANCE HR
Talent Source Allocation, Next 2 years
Location A
Local Existing New Hire Contractors Mobility
Saudi Aramco Workforce Planning
Source: Talent Mobility, World Economic Forum
32

• World Bank Philippines: Labor Market Review:
Employment and Poverty in the Philippines (January
2016)
• Underemployment rate around 18.4%
• Labor productivity up 3.4% per year but real wage
growth still lagging productivity
• “in-work poverty”
• Lamented subcontracting and contractualization but
noted this is largely due to intense global competition
• “It’s the right proportion in regular employment and
subcontracting that matters.”
• Solutions must address both supply and demand
The Right Mix

• Recent article in Straits Times (6/28/16)
• Singapore contract workers with >3
months at same firm will be entitled to
statutory leave benefits
• MOM, NTUC and SNEF noted contract
workers are “a small but important part
of the workforce.”
• Contractors (workers on term contracts)
made up 11.3% of the resident
workforce, a steady percentage the last
10 years
What’s the Right Mix for Society?

Freelance Total Rewards Effective Rewards for Global Talent
Thank you!
Thomas (Tom) A. Farmer, CCP, SPHR, ACTA
Owner/Principal, Freelance Total Rewards
Consultant, HRMBSi, +63 2 706 9949
Please submit your questions to:
NCE37 Chair Mr. Freddi Marquez
FreddMrq@aol.com

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