Are You Making the Most of Your Temporary Staffing Options?
The “shamrock organization” that has been widely touted as the model for the future, suggests that as much as 33% of your workforce can be contingent workers, while another 33% are the workers provided by “outsourced” service providers. Only 33% of this shamrock workforce are core employees, with the responsibility to manage and coordinate the work of the contingent others. Does this staffing model make business sense for your company? Your team? How much money could you shave off your operating budget if you became more “shamrock” like?
2. Is the demand for your goods or services increasing or decreasing? How have you adjusted your headcounts to deal with these trends? Reducing or adding to your temporary/flexible workforce is fast becoming the preferred staffing model to cushion the highs and lows of economic volatility. The notion of “right sizing” isn’t just about reducing staff; it’s also about not making permanent commitments to core employees until you know for sure that a business trend is stable. Using a flexible staffing strategy to always stay “right sized” has become a strategic method used by employers to transition wage costs from a fixed cost to a variable cost. Investing in or holding onto fixed costs that your competitors treat as variable will eventually impact profitability and your ability to compete.
3. Do you have a good handle on the rhythms of supply and demand for your department’s particular goods and services? The reoccurring low and high points of your team’s work cycles? With the growth in popularity of temporary and contract staffing options, an employer’s ability to move employees in and out of work environments quickly has significantly improved. Many employers have made a science out of staffing their teams at levels to support the lowest points in the demand cycle and using flexible workers to cycle-up or cycle-down in response to business need. “Workforce optimization” software’s have been developed to help companies track productivity requirements prior to impact.
4. How much overtime is currently being required of your workforce – core and flex? Overtime is very costly and is often a reactive strategy rather than the result of a well thought out plan. Staffing with the right number of core employees and augmenting up or down with flexible employees should eliminate most overtime requirements.
5. When special projects or reworks come up, do you typically have enough employees currently on staff to handle the extra work load? If you have core staff that consistently have the time to volunteer for additional work, chances are your company has too many fixed wage costs embedded into your workforce strategies. Most work that is non-reoccurring or not part of your regular routine should be done by your flexible workforce, not your core.
6. How long is it taking you to hire a core employee? What is the impact to your business of an inability to hire? If you need to move quickly and it takes too long to hire a core employee, you can miss important opportunities. Temporary or contract employees with the skill sets you need, can be brought in and put to work quickly. Temp-to-hire staffing models have dramatically increased over the last two years. Workers who have found themselves suddenly out of job are oftentimes willing to work in non-core ways. Many of these employees will bring new ideas and new ways of working to your company, promoting an atmosphere of change.
7. Are there jobs under your direction with high turnover, requiring you to be constantly in “hire” mode? Reoccurring turnover can be a sign that the job you are trying to fill just might not lend itself to a core staffing model. Many work groups composed of workers with low to moderate skill levels have been fully converted to a temporary staffing model.
Another way of dealing with a high turnover job is to use a rotating group of auditioning contingent workers who you can use to keep work flowing, while giving workers a chance to demonstrate their special interest in or talent for the work to be performed. This auditioning process allows you to “always be hiring” while outsourcing much of the staffing costs to a third party employer.
8. Are there jobs under your direction where the morale of the work group seems to be an issue? Or where a large number of employees are no longer on their A-game? In large teams performing repetitive tasks, there are oftentimes cycles in employee performance that can be managed just like any other business cycle. If your productivity goals are such that all employees need to be on their A-game always, you might consider a more flexible staffing model that capitalizes on the opportunity to bring fresh new employees into your work group at just the right time—recycling employees who might have “burned out” into other work or jobs.
9. Is your team undergoing significant process changes? Bringing on new ways of working? New technologies? Periods of rapid or longer term change are often times when you need to slow down your commitments to core hiring and convert to a more flexible and short term work model. It is not unusual for work groups dealing with extended periods of uncertainty or change to be composed of more temporary than core workers.
10. How much of your operating budget can you devote to temporary or contingent staff? Many companies that monitor hiring levels carefully will at the same time provide considerable budget dollars for temporary/interim staff. One of the ways to add to your workforce without breaking full time employee (FTE) rules is to identify an employee you want to hire and instead of hiring them directly, you use an “employer of record” service through a third-party employer service. This staffing strategy avoids most of the hidden costs associated with core employees, retains the flexible component of an hourly employee who can go in and out of your workforce “at will”, plus protects your current core employees from the stress of trying to do more than they have core FTE to do.
For more information about ways to drive down fixed costs by using flexible workforce strategies, contact the PACE Staffing Network at email@example.com.