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23 April 2009 8:27am

Employers have cut millions from their discretionary spending over the past year, but risk blowing away all the savings by failing to control their contingent workforce, says talent management expert Gareth Flynn.

He says it’s surprising how many large Australian companies leave the engagement of temps and contractors up to their individual business units.

This exposes them to cost blow-outs, duplication of resources and potential compliance problems with employment law.

As well, it means the company has no real control over the process, with no overall reporting system, performance management or visibility of future requirements, he says.

Flynn, whose company TalentQuest consults with major employers on their recruitment and talent management processes, argues the recession is encouraging employers everywhere to cut back on their permanent staff, and in many cases these same companies are increasing the amount of temps and contractors they hire.

He suggests all employers should review the management of their contingent workforce and develop a company-wide framework.

This should be done with involvement from both the HR and procurement teams, Flynn says, and the framework should be developed around 10 questions and considerations:

Is the sourcing and engagement of contingent workers centralised in one department or function? Is there an established framework in place?

Do you have a recruitment technology platform that allows you to track the hiring activity, tenure and performance of your contingent workers?

Do you have rigorous supply chain agreements in place providing your business with consistent service and fee levels?

Do you have published and well-understood policies and processes in place for the engagement and management of contingent workers?

Do you know exactly how many contingent workers you currently use? What was your spend on contingent workers last year?

Do you have a direct sourcing strategy for contingent workers, or are you reliant on third party agencies?

Are the same compliance and background checking protocols and policies in place for contingent workers as they are for permanent workers?

How long has each of your contingent workers worked for your organisation? Are you exposed to any implied employment risk?

Do you have a process for ‘recycling’ contingent workers across business units as projects finish? Is there a process for assessing experienced contingent workers instead of hiring permanent staff? Do you have visibility of their skills and capability?

How engaged are your contingent workers? Who manages their wellbeing and professional development?

Flynn says that if necessary, an external team can be engaged to audit current processes and suggest improvements. This allows employers to quickly prioritise any areas that need quick action.

He argues that the development of a comprehensive contingent workforce management framework will lead to short- and long-term cost savings as well as improved productivity and workforce engagement.


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