Preparing to Manage Your Workforce for the Turnaround

Smart companies are using workforce-management lessons from the past 18 months and mulling strategies to ramp back up when the economy improves

What will the post-recession workforce look like? One thing for certain is that the composition of today's workforce has evolved and is unlikely to ever look the same again. A new mix of full-time and contract workers is giving companies the flexibility they need as the future remains somewhat uncertain.

However, it also challenges companies to make sure that this new blend of workers is managed effectively and in compliance with current regulations while also delivering the right skills needed for the organization to succeed. Gone are the days when a human resources executive can just focus on full-time exempt and nonexempt W2s while ignoring how other segments of the company's workforce are being recruited, hired, and managed. Now HR and corporate managers must carefully evaluate every aspect of their talent supply chain in order to maximize cost-efficiency and productivity.

In large part, HR was caught flat-footed at the start of the global economic downturn, unable to respond until well into the crisis. This time around, execs want to be better prepared for the extremes of an inevitable market turnaround, from the all-out war likely to erupt for qualified talent to the long-term need for more efficient and cost-effective ways to manage their workforce.

To help managers make the transition from this down economy and at the same time, improve talent supply-chain efficiencies in a way that advances broader, corporate strategic objectives, here are five pieces of advice:

Evaluate your workforce segmentation.

A seamless and effective workforce isn't simply split into full-time and temporary categories. Consider segments such as professional contingents, administrative temporaries, independent contractors (1099s), technical consultants, business consultants, and deliverable associated contributors. The deliverable-associated-contributor category includes the talent needed to complete projects or specific statements of work (SOW).

Would you be more cost-effective and productive with a higher percentage of workers from one category, such as flexible, independent contractors? Can you outsource certain operational functions to a strategic partner so that your organization can focus on core functions? The key is to take a close look at how your workforce is segmented today and then decide how you will ramp-up staff once demand increases. Start mapping out a plan that will enable you to find the right skills in the right types of workers when you need them most.

Refine your recruitment strategy.

In order to respond quickly to improved market conditions, focus on identifying acceptable time-to-hire and cost-per-hire metrics. Begin with an honest evaluation of where and how talent is brought into your organization. There is more than one way to hide head count, but it's up to managers to better understand recruiting practices and make sure that the process is efficient and compliant.

It is also important to review time-to-hire and cost-per-hire metrics achieved during large staff increases in the past. Then make sure that this time around, you improve upon those standards. Carefully consider the amount of time that hiring managers spend on talent acquisition. They should be involved in only 15% or less of the recruitment and assimilation process. Even a slight increase in that figure can result in delays and increased hiring expenses. The rest of the talent-acquisition process can be outsourced to a third party that has the time, expertise, and resources to focus on strategic talent acquisition.

Identify your employment brand.

Now is the time to discuss your employment brand. In order to maintain the brand's value, most large companies have strict rules about how employees can communicate with the public about the company. But many neglect to translate those standards to non-full-time employees or into communications associated with the talent acquisition process.

Provide adequate information about your brand, employee expectations, milestones, and other internal initiatives to staff members who are not full-time. This includes detailing specific skill-set requirements and standard use of every area of operations.

If you use third-party companies to assist with recruitment, there must be a strategy in place to communicate the right message about your employment brand to the marketplace. That's just the bare minimum. HR managers should also work closely with marketing and PR colleagues to communicate a clear, strong employment brand through advertising, job postings, the press, social media, and other outlets. That way, incoming recruits and candidates already have an accurate and consistent perception of your company before walking through the door. The value of your brand hasn't been diluted by outside influences.

It is essential that this strategy be used not only in the recruitment of full-time staff, but for any individual recruited into the organization. Too frequently outside groups are not required to adhere to employment brand standards.

Differentiate deliverables vs. skill requirements.

Evaluate all projects and statements of work (SOW) to determine if they are being abused as a way to get around mandated head count restrictions. This tactic frequently helps managers produce the required deliverables but doesn't translate into compliance or efficiencies for the organization as a whole. Typically it's possible to convert a small percentage of the workforce's skills currently being used to complete projects or statements of work into standard skill requirements. Most companies have 3% to 5% of true SOW work. The rest of their SOW teams are better classified through skill-oriented requirements. By looking closely at this segment of the workforce, there is an opportunity to save money and retain the right talent.

Brush-up on the rules.

It's not unusual for companies to discover that about 25% of their independent-contractor use violates state compliance regulations. Many operate "the way it's always been done," but today's procedures need to be consistent, compliant, and reproducible.

If you employ independent contractors, immediately make sure hiring procedures and management policies are well-documented. It's easy to lose sight of basics amid summer vacation season or the rush to build your workforce quickly, but poor management or indiscriminate hiring of this classification of workers could end in very costly mistakes.

Even if you get the right talent into your organization, you must do it the right way or you could at best find yourself paying premium prices for contractors and at worst wind up paying a hefty fine to the Internal Revenue Service, affecting your results. Prepare by performing independent-contractor audits and creating a more stringent process for their hiring and management.

Overall, policies and procedures put into place should not inhibit your business' ability to place talent quickly. Instead they should manage all sources and types of talent and connect them to very specific measurable performance expectations. By having a comprehensive view of the talent pool, contributors from various segments may be leveraged more efficiently throughout the enterprise within legal parameters that today's businesses can't afford to breach as the economy rebounds.

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