Change can be a scary thing. In our modern world we have the ability to effect and control things that would have seemed like science fiction not that long ago, but two things we have yet to figure out how to control are time and change. They happen whether we want them to or not. Whether it be the seasons, our age, technology, or tradition. Look out the closest window from where you’re reading this; it’s happening right now. Most of us fail to notice daily change and even less find the time to think about the big picture. Tasked daily with the duty to fulfill the needs and requirements of our jobs and busy lives outside of work it’s easy to forget to stop and think about change in the context of the big picture. There’s mortgages, kids, education, retirement, and (hopefully) a little vacation and social activity to worry about as well. However, it’s long term and big picture thinking that keeps us motivated, helps us shape and sharpen the daily decisions of our lives, and give us the ability to remain focused even through short term pain or discomfort (See: that fitness plan). Change, both large and small is a healthy and natural part of our human existence. So, as we’ve continually heard that a business is only as good as the people it employs, and corporations are in fact people under the law, then perhaps it’s time to start applying the rules that work for people, to enterprise.

In an interesting piece on Strategic Sourcing, that is, a specific plan of action regarding the procurement and hiring of top talent, Argentus Talent Acquisition poses the question: Who is better to Effect the Toughest Changes in Strategic Sourcing? Your Permanent Team or Third Party Contractors? (Go here for the full article) They deduce that the contractor/consultation model allows for greater opportunity for change within your organization by allowing for a fresh perspective and minimizing the personal and political hurdles that can stop an organization from moving away from the status quo.

If we apply this same line of thinking to the larger context of Contingent Workforce Management, it may be time to ask: When is the last time your enterprise truly thought about the long term goals regarding your Contingent Workers? And are small steps being taken daily to effectively embrace that strategy? As we’ve already discussed, change is happening, the only variable is how we respond to it.

 

Ardent partners are set to release new research later this month that indicates that Contingent Labour is set to rise 30% over the next three years, a figure that they state “Accurately represents the growing reliance on the non-traditional workforce.” If you follow Contingent Labour, deal with mitigating risk on independent contractor compliance, or Talent Management and Procurement, you know the stats already.  It’s very easy to get lost in them. While effective, they can also over complicate the matter at hand. Enterprise at its core needs to innovate, it needs to be adaptable, and it needs skills present to make those first two things achievable. If the big picture is growth and competitiveness in the marketplace, then it’s a major priority to always make sure the base needs of innovation, adaptability, and skills are constantly being met.  Even if the path to get there requires some short term pain or discomfort.  (See: that fitness plan again) More and more, it is Contingent Labour that is being utilized to meet these needs—and while cost savings is usually the most immediate and alluring statistic in moving an Enterprise into this type of model, it can’t be the only thing. Sure, in the short term, it’s easy to be won over by the idea of utilizing IC’s (independent Contractors) to have flexibility in staffing, or save money on taxes and entitlement & benefit programs, but cost savings needs to be looked upon as daily actions of a larger goal, not the entire plan. Or, as we’ve looked at it previously, the small change that sets up the big change.

Long term change, requires long term strategy. If Contingent Labour, is at the core of your business than it’s time to start putting the plans in place to manage it. Whether it be through an Administration or Payrolling Service for your Contingent Workforce, Managed Services, or through Consulting. Not thinking long term about the inevitable change, management, and caliber of your Contingent Workforce may get you through today, but perhaps it’s time to turn that age old interview question on your own Contingent Workforce Management plan. Where do you see it in 5 years? How about 10?

Amidst a flurry of political and social controversy, the Olympic Games are underway, and for the international firms responsible for staffing the Sochi Games, they hope it’s all downhill from here.

Sochi’s three official staffing Suppliers: Adecco Group, Kelly Services, and Russian firm Exect Business have put three years of work into building the Contingent Workforce for the Olympic Games and the sheer numbers are staggering. The total number of temporary workers for the games may top 150,000 people, and that isn’t counting the roughly 25,000 volunteers that will be lending a hand to make sure the games run smoothly. Among those 150,000 workers 65,000 are skilled workers. These skilled workers were culled from a worldwide recruiting search, offering the opportunity for the organizing committee of the games the chance to hand pick expertise from the very best the world has to offer, as well as the chance for those skilled workers to show off their talents in front of an audience like no other. On paper it’s the perfect trade off, but somewhere along the way things went off the rails. Sochi-2014-Company-Olympics

Vancouver temporary worker Johnnie Balfour’s exposing blog posts and statements about the treatment of himself and his team at the games has been well documented. (Go here to catch up) Even an entire twitter feed, @SochiProblems emerged to document all the issues journalists and athletes alike had encountered upon first arriving in Sochi. Littering news feeds around the world with pictures of brown water and unfinished construction. While these images weren’t exactly the image that the staff and Olympic Committee wished to have us see, the big picture moment of truth for the staffing agencies of the games going forward may not be boiled down to pictures or politics. It may boil down to the larger issues of transparency and control.

For those in the business of the Contingent Workforce this is an issue of risk debated and managed daily, as the decision to either outsource or direct source (hire from within) is weighted against the factors of cost, availability of resources (skills), and time. As the world’s eyes turn to Sochi for the games, administrative/payroll miscues and a lack of communication is not the way to put our (those in the contingent workforce solutions business) best foot forward. In this case, while a pool of extremely talented and eager workers were recruited and gathered for the games, it seems as though when they got there, the communication regarding their income was (at least according to Balfour) left open to interpretation . There is nothing that will turn an IC (independent Contractor) off faster than the notion that they’re not getting paid, and in Balfour’s case, seemed to be the last straw.

As an Employer and a Business you only get one chance to make a first impression with your Contingent Workforce and Independent Contractors. Making sure your T’s are crossed and your I’s are dotted is an absolute must in an industry where word travels fast.  If your goal is to recruit and retain top talent, miscues are simply unacceptable. In the case of Balfour, the simple and affordable option of an IC Compliance and Payroll service could have been made available to figure out payment options and schedules before he even left for Sochi, and in the process, saved the staffing agencies responsible for 150,000 workers the potential firestorm of being made to look as a willing participant in the headache inducing and livelihood threatening payroll practices of the Sochi Games.

There is truly no replacement for transparency and efficiency in this business and the sheer size and publicity of this only goes to remind us that even a small administrative miscue or oversight can become a giant problem.    

If all goes according to plan when the games close on February 23rd, viewers will hopefully be inundated with images of the athletes’ fists in triumph, their tears in defeat, and memorable moments of sportsmanship and diplomacy. Not pictures of brown water, unfinished construction, and the supposed mismanagement of temporary workers. If the stumbles in the weeks leading up to the event are any indication, the staffing agencies may be the ones in the front row cheering the loudest for the athletes to steal back the spotlight.

After a rather flat bill rate for Contingent Workers in 2013, analysts are predicting a sharp rise in the latter half of 2014. According to Robert Half Technology and The Creative Group, here are the positions that will see the sharpest rise in salary in 2014

money 1. Mobile applications developer: Experienced mobile applications developers can expect to see the largest increase, 7.8 percent, in starting compensation of any tech position listed in this year’s Salary Guide, with salaries ranging from $100,000 to $144,000.
2. Business intelligence analyst: Skilled business intelligence analysts can anticipate a 7.4 percent boost in starting compensation in 2014, with salaries ranging from $101,250 to $142,250.
3. Information systems security manager: Information systems security managers who can assess and re-mediate vulnerabilities, threats and intrusions are in demand, and are projected to see a 6.8 percent bump in base compensation this year, with average starting salaries between $115,250 and $160,000.
4. User experience designer: User experience designers can expect to see average starting salaries between $78,000 and $120,000, up 7.5 percent from 2013.
5. Mobile designer: Skilled mobile designers can anticipate average starting salaries to increase 6.3 percent in 2014, to the range of $66,000 to $103,000.
6. User experience specialist: User experience specialists can expect to receive base compensation in the range of $79,000 to $118,000, a gain of 5.9 percent over last year.

 

*Source-SIA (Staffing Industry Analysts)

Organizations cannot afford to approach their contingent workforce management in an ad-hoc, as-needed manner. They must begin to manage their entire workforce, including the contract and temporary segment, efficiently. A third party can assist organizations to create an effective contingent labour management program that gives visibility into the costs, mitigates risk, and provides a record of the worker’s employment with the organization.

Aberdeen research surveyed companies and divided these organizations into best-in-class, industry average, and laggard categories. The best-in-class category consisted of organizations that were in the top 20% performers. They had 87% compliance to federal/state/regulatory labour and tax policies concerning contingent workers, 4.4 contingent worker quality ranking score, and 21% contingent worker spend savings.[1] These organizations have implemented many best practices that organizations should imitate when using a third party or managing contingent labour internally.

There are various third parties that organizations can use that provide different aspects of a successful contingent labour management program.

  • Independent Contractor Engagement Specialists (ICES) work with organizations to manage independent contractors — including high-rate, project-based SOW (Statement of Work) consultants — by acting as an Agent or Employer of Record (EOR) for IRS purposes. ICES will assess the eligibility of a potential contractor for 1099 status. If they are found ineligible, ICES will hire the worker as their own W-2 employee, allowing him/her to work for the client on subcontract. For those that are eligible, ICES will act as the “Agent of Record,” simplifying the process for their clients.[2]
  • Vendor Management Systems, or VMS, are technology solutions that provide visibility into how many contractors a company is using, for how long, and for what. These technology solutions provide visibility into the cost of the overall contingent labour program. The basic systems handle everything from requisition to off-boarding, including hiring approvals and processing time sheets and invoices.[3]
  • An MSP (Managed Service Provider) is an out­sourced service provider who is responsible for procuring and managing contingent workforce needs according to client requirements. MSPs may or may not offer a Vendor Management System (VMS) of their own but they normally combine a VMS technology offering into the programs they run for clients.[4]

All of these third parties can be used in combination or separately. Aberdeen research has found that although all types of third parties are used by best in class organizations, a VMS was the most commonly employed third party by best in class enterprises.[5] Top performing companies were 33% more likely to employ an MSP program than other companies.[6] Best in class organizations were 60% more likely to employ ICEs than other companies, and ICEs have historically shown to increase contract worker compliance by nearly 80%.[7]

For more information about how your organization can benefit from a third party, and to find out more about VMS, MSP, or ICES, Click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

[1] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[2] The ROI in Enterprise Contract Talent Management. The Human Capital Institute. Sept 2009

[3] Muson, Howard. Treating Contingent Workers as a Strategic Resource. The Conference Board: Trusted Insights for Business Worldwide. Sept 2010

[4] The ROI in Enterprise Contract Talent Management. The Human Capital Institute. Sept 2009

[5] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[6] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[7] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

Companies need to make strategic decisions to outsource functions of their business that are not part of their core competencies. One such function is Contingent Workforce management; managing this function is a extremely complex, and organizations rarely have the capabilities to do it effectively. Deciding whether to outsource or internally manage contingent labour is highly dependent on the specific organization’s capabilities; however, outsourcing is often a better option.

When should you manage internally? If your organization has a strong talent acquisition function, cooperation between HR and procurement, cooperation between HR and other lines of business, and strong organizational leadership, then managing contingent labour internally is something your organization should consider.

To manage its contingent labour in an efficient and cost effective way, it is important that your organization possess all of these attributes, and not merely a few. Contingent labour often accounts for organizations largest single line item cost, and internally managed contingent labour programs are also often run in an ad-hoc, inefficient manner, and so organizations need to carefully examine their capabilities before deciding to manage internally.

If your organization does not possess the necessary attributes, an externally managed Contingent Labour Program, or MSP, is the best option. An MSP provider has the skills and knowledge to ensure compliance with the tax and employment law, which mitigates your risk.

To find out more about how your organization can benefit from an MSP program, click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

It’s time that HR became part of the overall business strategy. In 2009 an Aberdeen study found that 60% of executives believed that the current state of the economy would increase the importance their organizations placed on Human Capital Management. In a time when business results are of utmost importance, and companies are increasingly seeking efficiencies, human resources can be the difference between success and failure.

Many companies are willing to admit that their most important resource is their people, but few are willing to put this belief in practice and fully integrate their Human Resources strategy with their business strategy. Aberdeen found that 54% of Best-in-Class organizations had aligned employee goals and development activities with business priorities in 2008. This amounts to only a small percentage of all companies; however it displays that aligning the human element with business goals results in overall success.

The good news is that this is changing. The 2009 Aberdeen HR Executive’s agenda report found that 75% of executives surveyed indicated that HR had become more or significantly more strategic over a two year period.

By the same study, Aberdeen found that that economic instability and uncertainty posed by the economic downturn were their biggest pressures for best in class HR executives. In order to overcome these pressures, HR executives need to align their Human capital management priorities with the overall business goals. The study found that Best-in-Class organizations implemented programs that aligned the workforce with organizational objectives. In order to do this, they must collaborate with business managers to understand business success criteria.

HR needs to integrate with business managers in order to determine the best HR strategy in order to have the necessary resources for strong business results. This includes full time hires, and contract and temporary workers. Contract and temporary workers are often highly skilled and can be useful to an organization when specific skills are needed for a particular project, but these skills will not be needed in the long term. During difficult economic times, this is one of the most effective ways for an organization to gain the necessary skills without compromising costs.

HR is one of the most important departments in the organization, because HR provides the human capital that the business rests upon. HR needs to be integrated into the overall business strategy so that businesses can acquire the full time and contract staff that they need.

For more information about how to implement an MSP as part of your Human Resources strategy, click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

Staffing Industry Review recently published an article entitled “Don’t Fight Your MSP” that outlined the benefits that one supplier saw by embracing an MSP. The staffing firm profiled in the article was able to grow from a local company into a national company.

Many small to mid-size staffing agencies start to feel comfortable once they have created a lasting relationship with a local division of a fortune 500 company. However, many Fortune 500 companies, and other mid-size companies, are now implementing larger, organization-wide MSP programs that consolidate the hiring process.

This is a scary proposition for a small to midsize staffing firm. With an MSP, staffing agencies lose their sales relationships with managers, they need to deal with MSP fees, audits, and controls around margins. Many of these firms choose to fight the MSP by continuing to deal with organizations through back channels. While this may work in the short-term, it could be suicide in the long term.

With a properly managed program, the customer will know which suppliers are using the program to drive business and which are dodging the program by providing ad-hoc resumes hoping that one will stand out. Suppliers that use the later method risk being dropped altogether, while those that use the former actually stand to increase their business.

An MSP can appear to be a barrier to staffing firms, but if they embrace the program, they stand to gain business opportunities on a national and even international level.

For more information about how you can create an effective partnership with an MSP provider, click here.

SimplicityVMS, the only Canadian-based Vendor Management Software available on the market, was recently featured in Staffing Industry Analysts’ VMS and MSP 2011 Competitive Landscape report. Staffing Industry Analysts surveyed 42 of the world’s largest VMS/MSP companies for its annual report. For five years, the VMS and MSP Competitive Landscape report has provided the most detailed and comprehensive insight into the experience, positioning, and capabilities of VMS and MSP suppliers.

Interestingly, the report revealed that corporations are continuing to become more sophisticated at managing temporary labour. The report shows that companies have already, and are continuing to employ technology for their contingent labour management needs. The complexity of the techniques applied by services providers has evolved to such a point that companies are now expanding their programs globally and including non-traditional labour categories such as Statement of Work (SOW) project services or high end consulting engagements through their vendor management systems (VMS).

SimplicityVMS is unique because it is the most configurable, and it has the fastest implementation time of any VMS on the market. This system can easily be customized to suit customer needs, and because implementation time is greatly reduced, clients save money. SimplicityVMS is also white-labelled, allowing clients to implement their own brand and create a common user-interface. SimplicityVMS is a low cost solution that provides Small to Medium size businesses with the necessary tools to manage their contract labour.

Spend under management is the contingent labour spend that is being managed by a technology or alternative service. Spend under management grew from $66 billion in 2009 to $83.7 billion in 2010, which was a 26.8% increase. This reflects the strong growth that providers have experienced. Staffing Industry Analysts’ research shows that companies of all sizes, in just about every industry, are using MSP and VMS providers to manage their contingent workforce programs, and the penetration of MSP and VMS spend in the staffing market continues to increase. The report covers spend across the globe including the U.S., Germany, the Netherlands and France, some of the largest staffing markets in the world as well as developing markets such as Brazil, India or China.

Staffing Industry Analysts’ VMS and MSP 2011 Competitive Landscape report reveals that organizations are recognizing that they need to employ VMS and MSP programs in order to manage their contingent workforce and remain competitive. SimplicityVMS can give organizations the management tools they require to gain an advantage.

To find out more about how SimplicityVMS can help you, contact:

Jeff Nugent
Direct Phone:  416-642-9126
Email:  jeff.nugent@cwsolutions.ca
Linkedin: http://ca.linkedin.com/in/jeffnugent

Contingent Workforce Solutions also provides MSP services. Click here for more information about how your business can benefit from CWS’ MSP programs.

The courts continue to deal with ongoing contract labour disputes due to lack of due diligence in consistently classifying workers and ensuring that contractual agreements are legal and fair. The following FedEx lawsuit from Helena, Montana exemplifies many of the complex legal issues that can arise when organizations have not properly protected themselves.

For the full article, click here

Federal court judge Charles Lovell in Helena has said that the arbitration clauses in FedEx contracts with its drivers are so one sided that they are “Unenforceable”, and has ruled that the lawsuit move forward without arbitration. Lovell also ruled to dismiss four of the eight complaints made by Tracy LaSalle in his wrongful discharge lawsuit filed against FedEx Ground Package System. The dismissed complaints include malice, violation of Montana’s independent contractor law by misclassifying him as an independent contractor instead of an employee, unjust enrichment, and not paying him for overtime.

Lovell wrote that, under the law, an arbitration provision is unenforceable when it is both “procedurally and substantively unconscionable”, and this case falls into that area. Lovell ruled to wave the arbitration primarily because it unfairly requires “binding arbitration of the weaker bargaining party’s claims, but allows the stronger bargaining party the opportunity to see judicial remedies to enforce contractual obligations”. Lovell stated that “This type of disparity can become so one-sided and unreasonable that the agreement becomes unconscionable and oppressive.”

LaSalles’s lawsuit is part of a larger issue in which FedEx drivers argued that they were employees rather than independent contractors, and as such should be awarded overtime and holiday pay, and not be required to pay operating expenses for delivery vehicles, renting uniforms, and fuel.

In October 2010 a settlement was reached with FedEx that said the delivery drivers were, in fact, employees, but it also outlined a business model in which they could still be private contractors if they handled numerous routes instead of just one. Initially the required number was three, and LaSalle tried to sell his route. However, FedEx then changed the number of routes to two, and LaSalle’s sale fell through and he claims to have lost $175,000.

The October 2010 precedent setting settlement has had a large impact on LaSalle’s case and other subsequent trials. This case indicates that it is increasingly important for companies to perform the necessary steps in order to ensure compliance with contract labour law and tax regulations.

For more information about how your organization can mitigate contract labour risk, contact Contingent Workforce Solutions at:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

The most expensive and most complex resource of any business is its people. Many factors affect human performance, and, as a result, the human dimension is generally considered difficult to measure in terms of efficiency and improvement. With visibility into their workers’ performance, however, companies can better manage their entire workflow process.

Companies often have very little insight into their contract employees; a segment of the human dimension that poses high risk with employment and tax law and usually accounts for organizations’ largest single line expense. Contingent workers currently account for approximately 25% of the workforce, and this number is expected to increase. Companies need to effectively manage this aspect of their human resources in order to succeed in today’s changing employment market. Workforce analytics give companies visibility into their contract workforce, allowing them to better manage workflow, productivity, and compliance.

A Vendor Management System (VMS) can provide companies with the workforce analytics that provide companies with insight into their contract workforce across the entire organization. With greater insight, companies can determine who is doing what, and how well they are doing it. This allows organizations to allocate resources, motivate workers, and better understand human-resource related costs.

There are four key components to an effective Workforce analytics program. These components are:

  • Interactive – Workforce Analytics must be used as a living tool with dynamic data that integrates with historical data, including exceptions and outliers.
  • Intelligent – Analytics programs should be predictive and provide enough context to not only answer questions, but also raise them.
  • Actionable – The data must generate realistic recommendations that guide management decisions toward cost savings and risk mitigation.
  • Motivational – Workforce Analysis should go beyond mere mandates and inspire employees to have a stake in best practices.[1]

Successful businesses always look forward and adjust their strategies to match the changing market. Implementing a VMS and a workforce analytics program is one way that companies can adapt and better manage their most complex and most important resource: their people.

[1] Leeby, Doug. Workforce Analytics: How to Define, Measure and Drive Productivity in Today’s Organization. http://www.sig.org/i4a/pages/index.cfm?pageid=5748

For more information about how you can benefit from a Vendor Management System, contact Christina Fabugais about SimplicityVMS

Christina Fabugais
Marketing Manager
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca