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Temp workers gain favor

CWS 3.0 - Contingent Workforce Strategies

Temp workers gain favor

Adrianne Nelson
| March 15, 2017
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There used to be a stigma around using temporary workers. Companies didn’t want to discuss their usage of nontraditional staff. But that was a number of years ago, before the Great Recession highlighted the obvious benefits of having such a flexible workforce. The fact is there is a new reality on the ground, and that is only 27% of the world works exclusively with traditional, full-time employment contracts, according to the World Employment Confederation’s managing director, Denis Pennel.

Pennel, a labor market analyst and work futurist, points to India as a good example of a country that does not rely on contracts or perm employment to be successful. Ninety percent of the country’s workforce has no contract at all, yet it enjoys annual GDP growth of more than 7% in recent years - far exceeding levels of growth achieved in Europe, Japan or the US.

But India aside, the world at large is waking up to the advantages of using temporary workers. As a result, there is now an acceptance of flexible work that is far-reaching. Technology and preference have given everyone from millennials to baby boomers a taste of remote, flexible work and the appetite is growing here globally. We revisit why it makes sense to use temps.

First and Foremost: Talent

The war for talent is on and has been for some time. We hear it again and again. You need to maximize every source you can get. There are currently 800 million people aged 60 years and up, comprising 11% of the world’s population. In 2047, for the first time in human history, a higher proportion of people in the world will be aged 60 and over (21.0%) than under 15 (20.8%). The aging population affects all countries and income levels and will ultimately affect the talent supply, according to the “Ageing Societies” report by Steve Beales of the Imperial College London.

It’s managing the flexible talent pool that is of utmost concern to many companies. It’s to help address those concerns, as well as those of compliance and the companies’ bottom line that led us to develop the flagship certification program for the contingent workforce professional, CCWP. Currently, we are developing a sister program for the management of statement-of-work arrangements.

In both programs, we highlight what we call the QCER framework: addressing the four key components of CW management. The courses address how to measure and improve each area. Here, I discuss how each speaks to why companies should make use of contingent labor.

Quality. Your company is expert at what they do but there are areas where many companies do not have a core competency and need help (look at the demand for IT contractors for example), there are also peaks and valleys in your business cycle when you need quality talent fast and temps and contractors are the answer. They provide trained, skilled talent on demand that you can count on to help you get the job done, any day, any time.

Cost. Having the flexibility to adjust to demands in your workflow saves money and then there are the real cost savings associated with using flexible workers of all types, for temps, most buyers we surveyed thought they saved around 9% according to SIA’s report, “Perceived Cost Savings From Using CW.”

Efficiency. You can create on demand talent pools and while devoting far less time in skills training: They already know what to do; temps and contractors are also a more efficient recruiting source for you - if you like the try-before-you-buy approach.

Risk. Temps are generally paid on a W-2, which helps mitigate risk. Using temps and contractors also helps you monitor due diligence on compliance and protects your firm by obtaining indemnities from suppliers.