CWS 3.0: March 11, 2015

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Contingent labor is simple, engaging them another paradigm

The world we live in is quite simple when it comes to contingent labor. A firm has a need for a task or service, then a human resource that can resolve that task or provide that service is engaged — which can be in many forms — the resource is compensated when the task is completed or the service provided.

Don’t get taken in by how simplistic this sounds. There is complexity that comes from one point in the chain: engagement. It is at the engagement level we encounter legal and regulatory concerns, contract issues and cost ramifications. These concerns can derail programs and companies. Whether we are talking about agency resources or independent contractors, they are still people providing a service or resolving a task but the nature of engaging these workers can cause compliance issues that can run into millions of dollars for corporations.

What would be the ideal method of engagement, then? While the specifics can be debated, any such solution needs to include some form of direct engagement as we see in online staffing or freelancer management models. And we are getting close to such a solution with the advent of online staffing models /freelancer management and VMS technology. With Beeline’s acquisition of OnForce and IQNavigator’s partnership with WorkMarket to name a few, we will soon be able to see real growth in alternative modes of engagement by the creation of private talent pools.

Private talent pools are curated pools of pre-identified talent resources, which can be program alumni, retirees, former contingents, consultants or even job applicants who didn’t get the full-time job they applied for but would still like their foot in the door. In a VMS workflow, it’s possible to have requisitions routed to these talent pools as you would normally and then these resources would be engaged either as a properly vetted IC or through a payroll service. This approach promises significant savings as there would be a lower markup on the workers’ pay rate and would better leverage your company’s employment brand as opposed to that of the agency. Additionally, these pools could become a key source of FTE talent. The benefits go on and on.

But this talent pool is highly unlikely to eliminate the need for staffing firms; there will always be a role for staffing agencies to help manage tougher fills and more difficult skillsets.

These approaches to a curated labor pool are nothing new — we see this in union environments for example — but can be powerful tools in providing vetted talent quickly with minimal risk, better cost containment and increased efficiency.