CWS 3.0: August 10, 2011 - Vol. 3.19

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Heard on the Street: Delineating Core, Noncore Functions

The unintended consequences of a workforce that is out of synch can be costly. The wrong workers are often engaged in non-core positions, rather than using efficient, blended workforce solutions that enable faster and less costly ramp-up and reduction when needed.
— Carolyn Nolan, vice president of strategic marketing, Volt Consulting Group

Today, many companies find that employment costs are their single largest expense. Charged with achieving revenue growth and innovation, they are still a bit leery of hiring only direct employees or they can’t find the appropriate talent. Therefore, they have introduced a lot more labor complexity into their operations, Nolan says. Companies must manage a whole range of workforce options, including contingent labor, statement of work consultants, independent contractors, and other partners.

Certain workforce solutions such as internal shared services or external partnerships are ideal for non-strategic, tactical, repeatable roles. In an IT organization, for example, a strategic element like driving the road map and new development would be best addressed by in-house, division-specific staff, whereas tactical areas more suited to a shared services model or external partners include quality assurance, because it’s a repeatable test script.

However, this is not always the case, and what’s core may differ from one company to another and even by individual units within an organization. It is not simple to demarcate what is core, strategic to the company and what’s not, and many companies struggle to do that across their organization.  

But it’s a step that should be undertaken. The core versus non-core analysis helps companies determine what roles and responsibilities within their organization they want to utilize an internal shared services organization or possibly partners for. Then, it’s really important to analyze what they want to get out of their supplier relationships, which sets the stage in selecting the right suppliers. So it’s really useful for companies to perform that core versus non-core assessment of their labor requirements so that they can utilize suppliers better, whether their suppliers are for contingent labor, SOW types of engagements, or whether they’re for some other type of labor input, says Nolan.

But don’t stop there. Performing the core vs. non-core assessment of job functions also leads to cost savings, efficiency of operations, and better-quality workers. Because business evolves, it’s critical to assign key performance metrics, monitor performance, and perform consistent change assessments. Make sure that you have visibility into all of your relevant data — and that the data tells you something (drives strategic decision making).

Your partners can help you. “We do an awful lot of analytics to continually monitor the success of our programs, but it’s also important for the client to continually measure their satisfaction levels, the quality that they’re receiving and if their needs have changed,” says Nolan.

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