CWS 3.0: August 22, 2012

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What’s Driving Rising Contingent Workforce Usage?

According to results of a recent survey of contingent workforce buyers, their usage of contingent labor is rising. Specifically, responses indicate the share of buyers’ total workforce that is contingent is 16 percent this year, up from 15 percent a yer ago and 11 percent in 2005, the first survey of this nature. What is contributing to this increase?

There are many reasons. To begin with, there is a better appreciation and acceptance of the flexibility and quality of contingent workers thanks to the continued uncertain economy. The real difference, though, lies in C-suite interest: The contingent workforce is now included in core strategic planning and utilized in a critical way to flex talent muscle. The recession made visible all the advantages of contingent labor. And today there is a recognition that talent comes in different packages, flexible and traditional.

Whether you sit on the procurement side, the HR side or elsewhere, you should be thinking ahead and anticipating a future where contingent workforce management (CWM) and strategic workforce planning (SWP) merge to form a total talent management solution. A company that holistically embraces this approach will be better poised to meet the increase in demand for talent and flex its muscles when needed. Your executives will be looking for your ideas and solutions, the tools are there, the practice is now mature and it is your turn to have a seat at the table in developing and updating the business strategy.

Senior leaders and their teams review and assess programs and plans for numerous drivers of the business, including products and services, research and development, customer preferences, the competitive landscape, financial outcomes and the workforce necessary to deliver on the strategy. CW Program managers sitting in HR, procurement or elsewhere must be engaged in this process to know what workforce requirements will be necessary to support the strategy of the overall business. Need guidance? Take a look at some of our latest research on the topic here and make sure your increasing share of the CW is part of the total talent management solution.

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oDesk

Matt Cooper 08/22/2012 01:36 pm

One important point on the statistic you share is the timing of the surveys. Contingent hiring always leads the way out of a recession -- it's not surprising that a CEO that survived the last 4 years is more focused on moving a fixed cost to a variable cost via contingent labor than a CEO in 2005.

That said, I agree that there is a fundamental shift underway, and it's not just being driven on the demand side. We've already seen average job tenure drop -- we now work for 5 companies in 10 years rather than 1 company for 30 years. We're headed toward a mode where we are working for 5 companies in the same year. According to MBO Partners, more than half of the US labor force will be working as an independent contractor by 2020 (http://info.mbopartners.com/5-predictions.html).


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