Global businesses are increasing their reliance on contingent labour – the practice of filling full-time positions with contractual workers – and this has quickly turned into a trending long-term practice.
Today, almost 26% of the average workforce is considered contingent, temporary or contract labour.
According to Kay Vittee, CEO of Quest Staffing Solutions, this change in labour practice necessitates a need for an equal change in management processes.
Vittee says, globally, about 41% of businesses believe they face increased risk related to the management of contingent labour. This is partly due to businesses using contractual employees, but not adjusting the methods used by their human resource departments in their management.
An example of where contingent labour requires unique management is in terms of contract time spans. Vittee refers to the management of contingent labour through an internal human resources department, which is familiar with dealing with permanent staff.
“This can easily present an obstacle in keeping track of when contracts have come to an end and can lead to businesses incurring unnecessary costs to terminate the employment of a contractual employee – who has continued working past the date stipulated in his/her contract.”
“It therefore stands to reason that businesses adopting the contingent labour trend need to be aware of the solutions available to them, not only to meet their general business and strategic objectives, cut costs, improve governance and promote management, but also to eliminate legal and financial risk,” says Vittee.
Referring to the 2014 Buyers Survey: Best (and Worst) Decisions Made by Contingent Workforce Managers, conducted by the Staffing Industry Analysts (SIA), Vittee says the most common “best decision” among buyers, by a large margin, was adopting a Managed Service Provider (MSP) solution.
“Buyers said this service reduced costs, was easy to use, was completely transparent and offered the buyer control and better management of their contingent workforce. The dominance of the MSP and/or its supporting Vendor Management System (VMS) answer in the survey was notable because the question was open-ended, with no potential answer suggested or prompted,” Vittee says.
Interestingly, she says when the survey asked buyers what their worst decision was, “allowing local branches or managers to exercise too much control over hiring,” was by far the worst decision followed by “overspending” and “unclear or insufficient management of contingent workforce”.
These respondents, who experienced challenges in contingent labour management, found a solution in choosing to place some of this responsibility on a third party.
“Particularly useful for large companies with many suppliers, the emergence of Staffing MSPs has recently gained momentum in South Africa with staffing solutions companies championing the trend,” explains Vittee.