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Workforce Composition Transformation
The document discusses the transformation of workforce composition due to increased reliance on contract labor following the recession, highlighting trends in non-employee utilization and its implications for businesses. It identifies misalignments in decision-making processes, emphasizing the need for better integration between procurement, human resources, and business leadership to manage this shift effectively. Recommendations are provided for improving contract labor management and aligning operational planning with workforce strategies.
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Workforce Composition Transformation
- 1. Workforce Composition Transformation Presented By: JoelCapperella Sr. VP Client Solutions October 28, 2010 How the recession has changed today’s workforce
- 2. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 3. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 4. Respondent Profile Product Manufacturing Other Health Care Banking/Financial Services ConsumerProducts High Tech Professional Services Aerospace & Defense Telecommunications Life Science Media/Entertainment Federal Government Annual Revenue: > $750M Disciplines: Business Leadership Procurement Human Resources Nonemployees: 5% to 20% Industries: High Tech Consumer Products Financial Services Health Care Life Sciences Product Manufacturing Telecom Professional Services Media / Entertainment Public Sector 4
- 5. Increased Contract Labor Dependency GreaterInvestment Post Recovery Poor Alignment Increased Risk & Poor Collaboration 80% Levels Remain or Increase 85% Report Increased Use 2010 Workforce Trends Study Workforce Composition and Management Transformation 5
- 6. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 7. Remained the same Increased bya small percentage Increased by over 5% Decreased by a small percentage Decreased by over 5% Dramatic Dependency on Non-Employee 88.5% Since September of 2008, 88.5% report the size of their non-employee workforce has either stayed the same or INCREASED 7
- 8. Utilization of ‘non-employees’either decrease or introduces NO management complexity Benefits of Non-employee Workforce No Change Decreases Labor Related Expense Increases Labor Related Expense 0% 20% 40% 60% 80% 100% No Change Decreases Mgt Complexity Increases Mgt. Complexity 88.5% Overall labor related expense decreases or remains consistent with increased use of ‘non- employees’ 83.5% DECREASED management COMPLEXITY and labor related EXPENSES create incentive to expand the ‘non-employee’ segment of the workforce 0% 25% 50% 75% 100% 8
- 9. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 10. Recovery Yields TransformedWorkforce 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Reported Non-employee use stays the same or increases Reported decrease dependency on non-employees Strong economic recovery will show continued use and INCREASES in the non-employee workforce 80% Stays at Current Level Small Increase Increase > 5% 10
- 11. Increased Focus on‘Non-employees’ 0% 10% 20% 30% 40% 50% 60% 70% Investments in non-employee Processes No investment in non-employee processes Increased Employee Engagement Vendor Consolidation Improved Employee Communication Include ‘Non- Employees’ on All Teams Significant INVESTMENTS are being made to improve the management and effectiveness of the ‘non-employee’ segment of the workforce 63% 11
- 12. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 13. Consumer: Non-employee Decision Priorities 0% 20% 40% 60% 80% 100% Possessabove average skill or a specific and unique skill set Can agree upon specific service level requirements Affordability Potential to become an indispensible contributor to the team Flexibility to end the relationship as business conditions change Previous working relationship 59% 41% 35% 27% 22% 18% 30% 21% 31% 41% 54% 25% 12% 39% 35% 33% 25% 58% Most Important Average Importance Least Important 13
- 14. Organization: Non-employee Decision Priorities 0% 20% 40% 60% 80% 100% Possessabove average skill or a specific and unique skill set Affordability Can agree upon specific service level requirements Potential to become an indispensible contributor to the team Flexibility to end the relationship as business conditions change Previous working relationship 54% 41% 36% 31% 26% 13% 31% 24% 29% 37% 54% 27% 16% 36% 35% 33% 21% 60% Most Important Average Importance Least Important 14
- 15. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 16. Misalignment Organizational and BusinessPriorities CONSUMER ORGANIZATION Quality Cost Availability Availability Cost Longevity Longevity Flexibility Flexibility Quality Relationship Relationship COST CENTRIC decision making minimizes quality, value, impact and integration of the non-employee segment of the workforce 16
- 17. Misalignment Accountability and RiskExposure 0% 10% 20% 30% 40% 50% 60% 70% 80% Cost is the overwhelming concern over contracted labor use Accountability and Risk currently not given top priority 17
- 18. Misalignment Loose Supply ChainControl 0% 10% 20% 30% 40% 50% Procurement Business Leadership Business Controls Procurement Controls STARTLING indicator of continued lack of control over efficient acquisition of contracted labor 18
- 19. Misalignment Poorly integrated collaboration -5% 5% 15% 25% 35% 45% 55% HumanResources Hiring managers / Project managers Sourcing / Procurement Finance Influence over introducing contracted labor into the workforce rests with hiring managers and is shared with human resources 19
- 20. Misalignment Workforce Plans vs.Operational Plans 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Stays at Current Level Small Increase Increase > 5% 60% 65% 70% 75% 80% 85% 90% Human Resources Procurment Workforce planning appears to be poorly aligned with operational planning 20 Human Resources Procurement
- 21. Misalignment Isolated process investments 0% 10% 20% 30% 40% 50% 60% 70% Increased Employee Engagement Vendor Consolidation Improved Employee Communication Include‘Non- employees’ on All Teams 63% 0% 15% 30% 45% vendor consolidation engagement improved communications Add more make no changes While investments are being made they appear to be isolated and outweighed by inaction 21
- 22. Misalignment Poorly Identified Expectations 0% 5% 10% 15% 20% 25% ProcurementBusiness Leadership No change Decreases labor related expense Increases labor related expense 0% 20% 40% 60% 80% 100% 88.5% Overall labor related expense decreases or remains consistent with increased use of ‘non-employees’ The business does not have expectation of cost savings when using contracted labor – an opportunity for procurement to assist 22
- 23. Respondent Profile Increased Dependencyon Contract Labor Post Recovery Forecast & Investments Contract Labor Decision Criteria Misalignment Recommendations
- 24. Procurement Human ResourcesBusiness Leadership Contract definition Workforce plan alignment Contract labor inventory Recommendations Aligning Procurement, Human Resources, Business Leadership Workforce Composition Analysis 24
- 25. Recommendations Aligning Procurement, HumanResources, Business Leadership Workforce Composition Analysis Evaluate Integration 25 Procurement Human Resources Business Leadership Effective and easy processes Suggest contract labor use ID Process Circumvention
- 26. Recommendations Aligning Procurement, HumanResources, Business Leadership Workforce Composition Analysis Evaluate Integration Define Shared Accountability 26 Procurement Human Resources Business Leadership Cost to value metrics Job description consistency Communicate change in needs
- 27. Recommendations Aligning Procurement, HumanResources, Business Leadership Workforce Composition Analysis Evaluate Integration Define Shared Accountability Evaluate Supply Chain 27 Procurement Human Resources Business Leadership Summarize engaged suppliers Provide quality metrics Performance report history
- 28. Recommendations Aligning Procurement, HumanResources, Business Leadership Workforce Composition Analysis Evaluate Integration Map Out Processes Define Shared Accountability Evaluate Supply Chain 28 Procurement Human Resources Business Leadership ID acceptable flexibility Identify ‘best-use’ scenarios Adopt process suggestions
- 29. Recommendations Aligning Procurement, HumanResources, Business Leadership Workforce Composition Analysis Evaluate Integration Map Out Processes Define Shared Accountability Evaluate Supply Chain Risk Mitigation Strategies 29 Procurement Human Resources Business Leadership Indemnity education Compliance checklist Communicate risk expectations
- 30. Workforce Composition Analysis Evaluate Integration Map Out Processes Define Shared Accountability EvaluateSupply Chain Educated and Enable Risk Mitigation Strategies Recommendations Aligning Procurement, Human Resources, Business Leadership 30 Procurement Human Resources Business Leadership Quarterly Business Reviews
- 31. Increased Contract Labor Dependency GreaterInvestment Post Recovery Poor Alignment Increased Risk & Poor Collaboration 80% Levels Remain or Increase 85% Report Increased Use 2010 Workforce Trends Study Workforce Composition and Management Transformation 31
- 32. 32 WORKFORCE SOLUTIONS Aerospace &Defense Engineering Federal Services Health Care Life Sciences Information Technology Telecommunications DELIVERY Immediate Resource Needs Managed Services Recruitment Process Outsourcing Vendor Management Systems Independent Contractor Compliance Payroll Services www.twitter.com/joelcapperella www.twitter.com/SeamlessWkfce www.seamlessworkforce.com Thank You & Questions