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PACE Staffing Network knows this trend first hand. Over 65% of the “temp orders” we fill are being tagged by our client as “possible hires”. Over 35% of the employees we place into “temporary roles” end up being hired by our clients directly. … Read More »
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Call Them Temps. Call Them Contractors. Call Them Consultants. Whatever You Call Them – You Need Them! Employers who have mastered the management of large and strategically focused flexible workforce's, and have learned to embrace this workforce rather than see it as a necessary evil, know that the workforce strategies represented by these workers are anything but temporary. … Read More »
Set your course, but keep re-calibrating, here's how... … Read More »
Okay…while not a pure play contrarian, I’m finding myself reacting less than enthusiastically to all the talk on employee retention that has been hitting the airwaves lately—apparently the hot topic in the staffing world. For me, the mandate that companies do what is necessary to retain their high value talent is HR 101. So when I read all the hoopla on the value of retention, I want to make sure our readers also hear the other side of the story—that for some jobs, the goal can’t always be about reducing turnover/improving retention, but needs to be more about better managing the turnover they have—smartly, proactively! MANAGED TURNOVER is a different sort of staffing strategy that I believe has a legitimate place in any hiring manager’s arsenal of staffing options. Most (but not all) of the MANAGED TURNOVER staffing models we put together for our clients are developed in response to scenarios involving what we call High Impact/Low Appeal (HI/LA) jobs! You know those jobs—ranging from that pesky front office job that was crafted from all the work no one wants to do, to the folks in your warehouse doing that boring, repetitive assembly type work that no one could pay you enough to do. No matter how great the manager’s motivational skills or generous the company’s pay programs, the nature of HI/LA work lends itself to workforce issues—increases in absenteeism, accident rates, and other workplace mischief that makes HR shutter. Sooner or later most HI/LA jobs suffer from high levels of voluntary or involuntary turnover, directly impacting team or company performance. When asked to find employees for HI/LA jobs, one of the first things we explore is the option of ending the uphill battle for retention, and replacing it with a staffing model involving a strategically rotating group of temporary workers. Here’s why:
The goal of a MANAGED TURNOVER staffing model is to optimize the number of workers in the earliest, most productive, stages of the performance cycle, while systematically cycling out employees just before they start into the downward cycle. When done proactively, the employee’s temporary assignment begins and ends at predetermined times, most correlated with optimized worker performance.
One of the important benefits of a MANAGED TURNOVER staffing model is that it side steps all the negativity embedded in a core employee staffing model applied to HI/LA jobs. Employers no longer spend time outlining their defense of a decision to terminate a core employee. Employees no longer struggle with a job that is no longer challenging. Assignments begin and end in accordance with a custom designed staffing plan based on the performance cycle typical of that particular job or workforce. Minimal hassle, minimal complication. The heavy lifting of replacing departing employees is assigned to a third party staffing agency, reducing if not eliminating internal recruiting costs.
Another side benefit of a MANAGED TURNOVER staffing model is that your temporary workforce becomes an always-available pool of candidates for hire. As all hiring managers know, when it’s time to hire the ramp up time, costs to find, screen and hire a new employee can be significant. And there is no guarantee that who your hire will work out. Having a large number of auditioning workers continuously available for hire allows employers to hire in a timely way, selecting only the very best to become a part of their core team, reducing the costs and disruption of hiring errors.
Not to worry, a MANAGED TURNOVER model doesn’t mean your entire workforce becomes "temps." Depending on the work to be performed, there are identifiable ratios of core and non-core workers that optimize overall performance. Too many temps and stability suffers. Too many core workers and your operational costs will eat away at your bottom line during your less busy periods. Ratios of temp to core workers can range anywhere from 10-15% to a high of 85-90%, depending on your business cycles and the nature of the work.
Here are two examples where one of our PSN partnership teams implemented “managed turnover” staffing models that improved worker outputs, dramatically reduced recruiting costs, and/or improved overall team performance and morale:
Some of our earliest converts to a managed turnover staffing model were call center clients who were hiring large numbers of entry level employees for service roles. One particular call center was facing a serious issue with first year turnover which was both increasing their internal recruiting costs, while also impacting service levels.
1. In partnership with our client’s HR team, our call center recruiters augmented the client’s recruiting team, reducing our client's internal recruiting costs. We worked in partnership to implement a uniform staffing process where all employees, sourced either by the client or our own recruiting teams, were screened and onboarded in the same way. All new call center reps were employed by PACE during the first 90-days of their employment.
This “audition period” allowed employees who were unable to meet the client’s expectations to be systematically removed from their assignment so that at the end of the audition period, the client offered employment only to those employees who were able to meet the full scope of their expectations. Those not measuring up were either given an extended “audition” period or their assignment was ended. Using this “managed turnover” staffing model in effect transferring most of the first 180-days of turnover to PACE, the client’s first year turnover rates were cut in half. Employees whose assignments were ended during the audition period became available to be placed on other PACE assignments, better suited to their personality or skill sets.
2. A second example is provided by one of our large healthcare clients who were experiencing turnover, attendance and workplace injury issues in their laundry area. After viewing the work, it was easy to see the classic HI/LA profile—physically demanding, repetitive, and ultimately boring work.
While the client initially asked us to help them improve their hiring outcomes (i.e. reduce turnover), our recommendation was that they focus instead on better managing the turnover we suspected was there to stay.
With the client’s guidance, we implemented a MANAGED TURNOVER staffing model. As each core employee left we replaced them with a temporary employee, whose assignment varied in length depending on our client’s anticipated needs. The employer’s workforce was soon “mostly temps” who were hired for specific work performed for a specified time period—and were oriented and managed accordingly.
The PSN partnership team set up a performance management system which, with our client’s help, was used to manage the employee’s performance. When an employee started to fall below defined standards, PACE, not the client, invested its recruiting resources to find a replacement candidate.
For this client, the MANAGED TURNOVER staffing model delivered a level of orderliness and predictability to their staffing process they hadn’t experienced in the past. It eliminated the negative impact of unexpected turnover, as well as taking away the pressure on their internal recruiting teams to staff a high turnover workforce. For our temporary employees, it provided them with assurance that when their assignment ended, their performance would earn them the opportunity to be placed elsewhere.
Workplace injuries were reduced by cycling temps in and out of the performance cycle, avoiding the burnout that had been a contributing factor to both attendance and workplace accidents.
Obviously this MANAGED TURNOVER staffing model can’t be applied to all jobs and all work environments. And even if you determine that one of the HI/LA jobs you manage would lend itself to a MANAGED TURNOVER staffing model, there are some basics that need to be in place:
The Right Staffing Partner. A staffing agency who only knows how to recruit people is not the partner you need to implement a MANAGED TURNOVER staffing model. Look for an agency who knows how to address productivity issues, has tools and systems in place to help you manage employees, and can bring you ideas about how to implement a managed turnover staffing plan. Look for a staffing partner as interested in solving your operating challenge as you are.
The Right Financial Model. You will need to keep your CFO aware of what you are doing and why as you will be purposefully expanding your budget for temporary staffing while decreasing the monies you spend on high cost core staff.
While the per hour costs of temps and core employees is almost identical (by the time you factor in all the regulatory and benefit costs of core employees), depending on how your company organizes its budgets and expense allocations, the costs of these two different types of employees can end up in different places on your financial reports and may trigger questions from “up the chain.” You will likely need at least one senior manager on your team who understands the shift you are making in how you are doing “staffing,” and why.
The Right Mindset. Most of the MANAGED TURNOVER staffing models we implement with clients tend to migrate into very objective, data driven, staffing processes. Even though you are no longer managing core employees, the need for clear performance standards, transparent metrics, and fair administration does not go away!
This article was written by Jeanne Knutzen, the founder and CEO of the PACE Staffing Network. The PSN partnership teams are well versed in a variety of flexible staffing strategies, including MANAGED TURNOVER programs. For a complimentary consultation on what flexible workforce recruiting and staff strategies might work in your organization, contact us via our InfoDesk at infodesk@pacestaffing.com or by calling 425-637-3312.
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Temp to Hire staffing strategies are one of the most popular methods of hiring in today's marketplace. They work for both employer and employee. Here's why! … Read More »
You've likely noticed that the number of temporary and contract workers in your workplace has been steadily increasing and probably more than ever since the start of our last recession in late 2007. In December 2013, we learned that the economy added a disappointing 74,000 jobs—but even more disappointing for some was the fact that over 40% of those 74,000 jobs were temporary positions, targeted for project work, or to last for short periods. Since the 2007-2008 recessions, the number of temporary or contingent jobs has outpaced the growth in core positions by a ratio of 2-to-1, a labor trend poised to be replicated for the next decade.
Since the publication of Charles Handy’s Age of Unreason in 1989, Prof. Handy and other futurists have predicted the growth of non-traditional staffing models. Believing that workforce flexibility would be a key driver of organizational success in a global marketplace, futurists rightly projected that outsourcing the employer relationship was one of the primary ways companies could ensure workplace flexibility. Up and downsizing core workforces are costly propositions. Up and downsizing a workforce composed of workers who aren't your employees, and are only attached to your workforce on a temporary basis, not so much.
While the earliest predictions regarding the relationship between flexible to core workers, frequently targeted to reach 40% have fallen short, current research is still pointing to employers increased reliance on flexible labor pools to meet their business needs. In their 2012 Workforce Management Report, the Aberdeen Group predicted that 27% of the worker population will be attached to the workforce in temporary, contingent, or other non-traditional roles.
For some companies these types of predictions create discomfort and angst. For others, they earmark opportunities to differentiate themselves in the marketplace.
If current trends hold up and flexible workforce solutions become the staffing strategies of choice, it is important to ask just how forward thinking your company has become in terms of embracing this shift in workforce demographics. Do you tend to view your flexible workforce as an annoyance—a necessary evil that is only in place to deal with temporary issues or periods of uncertainty? Or, is it embraced as a workforce solution that your company can use to set itself apart from its less nimble counterparts?
Here are ten questions you can ask yourself to find out if you’re ready to turn your flexible workforce into a competitive advantage.
1. How transparent are the staffing strategies already in place? Do you know when, where and why your company will use a flexible workforce model instead of hiring direct? Is there a clear philosophy about what staffing scenarios dictate flexible rather than core staffing solutions?
2. Is temporary or contract staffing visible in your operating budgets and considered a part of your overall staffing costs—or do the costs of your temporary and contract workers get buried somewhere in administrative overhead, making it impossible to identify what your company is actually spending on the people it needs to get work done?
3. How effectively have you integrated your core employee screening and selection standards with the standards applied to your flexible workers? Do these two components of your staffing operation tend to work together or are they seen as two different functions with little to no overlap?
4. Have you optimized how your company uses temp-to-hire auditioning processes as a way to leverage your internal recruiting resources, reduce turnover, and lower your costs of hire? How carefully have you thought through your temp-to-hire auditions to ensure they allow the right talent to be identified, auditioned or to surface during the audition? To be hired after the audition has been completed?
5. How often and in what ways do you work with your temporary staffing agencies as talent acquisition partners? How often do you use their talent pools for direct hires? If not, why not?
6. What is it costing you to select and manage your current suppliers? Are you getting the results you need? How many suppliers are you currently using to deliver your flexible workforce? What have you done to vet these suppliers and/or manage their service performance? What controls have you implemented to ensure uniformity in what is paid to your flexible workers and/or the suppliers delivering them to your organization?
7. When was the last time you did an analysis of the relative costs of an internal vs. internal employer solution - hiring direct as opposed to using the services of a third party employer? Are you up to date on the current trends in staffing to know what kind of employer of record services and service platforms you might use to drive down your overall staffing costs?
8. How do you know if the monies you are currently spending on your flexible workforce are market competitive? When was the last time you compared you current bill rates and pricing models with what might be available in the staffing marketplace?
9. When was the last time you reviewed your risk mitigation policies and practices specific to your flexible workforce - co-employment, the handling of confidential or proprietary information, and access to facilities, equipment or other security issues, etc.? How safe do you feel from unknown legal or accounting liabilities associated with an increased
level of flexible workforce complexity?
10. Have you established some key performance metrics and standards for your staffing operation—flex and core? Are you reviewing your staffing performance regularly to improve internal efficiencies and the ease with which your company has access to flexible workforce solutions?
The PACE Staffing Network has been helping clients design and optimize their flexible staffing solutions for close to three decades. We believe that the right mix of core and non-core employees integrated inside a larger talent acquisition strategy can become a significant and competitive advantage for companies willing to embrace change. For a complimentary consultation to assess just how ready your company is for the new world of flexible work models that is fast becoming the marketplace norm, contact Nancy Swanson our Vice President of Partnership Development at nancys@pacestaffing.com.
We get asked these questions all the time and each time our answer is a resounding, YES! Temp to Hire staffing strategies reduce costs of hire, lower the costs of early hire turnover, and provide employers with quick and easy access to hard to find talent pools—in a “just in time” format.
HR departments, while sometimes quick to criticize a temporary or contract workforce as being less committed or talented than their core workforce, generally like a certain percentage of their workforce as contingent as they represent employees who can be converted to direct hire status quickly when business heats up. But the real value of contingent workers is not just in providing companies with increased flexibility, but also the ability a contingent workforce provides for companies to tackle change quickly, with quick access to employees whose skill sets are unique and not easily developed “within.” Temp to hire strategies directly impact an organizations recruiting, staff and organizational development costs, impacting a company’s ROI for years to come.
Temp to Hire contingent workers also impact bottom line profitability by driving down unemployment claims, workers compensation claims, upgrading employee quality (only the very best employees are eventually hired), and keeping core workers “on their toes” with a fresh pool of new talent becoming the workplace norm.
The mathematical difference between the costs of an auditioning employee compared to the costs of a fully benefited core hire almost always pencil in favor of the temporary worker as the lower cost solution.
The design and execution of temp to hire staffing strategies is a core area of expertise for the PACE Staffing Network. Over 35% of the employees we place on temporary or contract assignments end up being hired by PACE clients each year. For programs specifically designed for hiring, the conversion rate can be closer to 85%.
For a personal consultation on the effective utilization of temp to hire staffing strategies and to do an analysis of how a temp to hire model could impact your overall staffing costs, contact me, Nancy Swanson at nancys@pacestaffing.com, I am PACE’s VP of Partnership Development.
