A new world, a new opportunity for MSPs
In 2006, the last time the federal government performed a tally, contingent talent made up about 30 percent of the workforce. Based on that figure and the growth trends taking place between 1999 and 2010, the software company Intuit promoted a landmark study that predicted those levels to reach 40 percent by 2020. Here we are just five years shy of that milestone, and it seems we’ve already exceeded the analysts’ forecasts. The Government Accountability Office (GAO) released a report this April showing that 40.4 percent of the American workforce is now contingent. What’s important to note is that GAO estimates have always surpassed the numbers published by the U.S. Bureau of Labor Statistics (BLS).
In 2006, for instance, BLS pegged the penetration rate of contingent talent at around 12 percent — 18 percent lower than GAO. And here’s why: BLS relies on a much narrower definition of contingent talent; primarily agency temps, day laborers and independent contractors. GAO’s data, however, reflect a more robust — and probably more accurate — concept of non-traditional employees, which includes on-call workers, the self-employed, freelancers, contractors and part-time talent. In light of this, some industry experts have adjusted their analysis to suggest that half of the U.S. labor force in 2020 could be contingent — a perfect blend of non-traditional and full-time workers.
What does this mean? That we can no longer cling to the idea of a “traditional” employment landscape. It simply won’t exist much longer. And with these shifts and complexities, it also makes sense to believe that managing the blended workforce will require new approaches. We see tremendous opportunities here for MSPs to evolve into a new, critical resource for clients: true business process outsourcers responsible for overseeing the entire employment population.
The modern workforce continues to blend
It’s become impossible to discount the visibility and importance of contingent talent in companies today. Non-traditional workers bring cost efficiencies, innovation, vital skills, fresh perspectives and agility in times of unpredictable global markets and sudden labor demands. Yet the contingent model is expanding to encompass strategic decision making, workforce optimization and competitiveness.
James Waite, the European director of Contingent Workforce Strategies & Research for Staffing Industry Analysts (SIA), observed at the close of 2014: “The result is an emergence of total talent management as a concept. Employees have traditionally focused on job security, benefits, training and opportunity for advancement, cultural fit and work/life balance as key considerations when choosing where and with whom to work. Contingent workers have focused on workplace flexibility, speed of onboarding, interesting project work, experience and career portfolio building, when making the same decision.”
That union has given rise to the contemporary notion of the blended workforce. And because of the instrumental role non-traditional workers play in this new model, they too have evolved into complementary talent — not merely contingent labor.
“A complementary workforce is combined with the employee workforce in such a way as to enhance or emphasize the qualities of each other,” Waite explains. “The result is a positive workforce synergy which is the overall strategic goal of a holistic talent model.”
Total talent management
Think about Waite’s astute depiction of the blended business model — “an emergence of total talent management as a concept.” That’s a powerful statement, and it holds an awful lot of merit. So the question remains: who will manage this integrated workforce? Today’s hiring managers and corporate recruiters are stretched thin. As we wrote during the first week of June, “time poverty” has taken its toll on many companies.
As the categories of workers grow more disparate and, at the same time, more unified into a single business environment, the process of managing their needs, expectations and roles also becomes increasingly complex. Time poverty and the introduction of complementary talent are weighing down corporate teams. It makes more sense now to consider the power an MSP delivers for managing the entire labor force.
The beauty of an MSP program for time-strapped, overwhelmed clients is that it unifies technology, people and processes. MSPs bring the humanization of human resources through careful data analysis, tracking and reporting of performance, compliance with labor regulations, cost containment, and a high-touch approach that cultivates interactions and engagement with talent. More crucially, MSPs and their staffing partners have the time to focus exclusively on the needs of talent — whether those workers are active candidates, passive talent or onboarded members of the team.
MSPs as business process outsourcers: streamlining all aspects of the blended workforce
MSPs already administer the end-to-end hiring and management processes for contingent talent populations. Why stop there?
Staffing professionals have always had some inherent advantages over corporate recruiters: their resources are 100-percent committed to the processes of sourcing and recruiting, they generally have fewer assignments to focus on and their compensation is predicated on performance, not activity. Because staffing firms cover active and passive talent, they raise the level of quality with every new hire.
Staffing curators also cast a wider net — 80- to 90-percent of their efforts go to networking and recruiting in-demand passive talent. Corporate recruiters, conversely, often have time enough only to source active candidates. Staffing curators have access to a wider breadth of candidates, including permanent workers, executive-level managers, specialists, niche talent and more. With an MSP program, any position in the blended workforce can be sourced and placed with greater speed and efficiency.
Through their staffing networks, MSPs have faster access to talent
Staffing curators have a tremendous advantage over corporate recruiters in terms of connections: they represent countless companies, not a single organization. Elite staffing professionals are deeply entrenched in all applicant tracking platforms, from traditional job boards to social media and online marketplaces. Through these systems and their efforts to build virtual benches of candidates, staffing professionals develop robust networks of qualified talent. This creates the opportunity to speedily source and place highly qualified workers, along with the ability to carefully find the best fit environments for their talent — an additional benefit to MSPs and clients in terms of reducing attrition and maximizing productivity. Where traditional companies languish in a hiring process that can span 60 to 90 days, MSPs can usually requisition, fill and onboard positions within two to three weeks.
MSPs ensure a more cost effective hiring process
Staffing curators develop diverse staffs of internal hiring experts who bring a wealth of past industry and organizational experience to the process. These staffing professionals have worked with a variety of MSPs and hiring managers, across industries and job categories, enhancing their knowledge of real-world job needs, position requirements and applications. This insight allows them to engage in more strategic, targeted and timely recruiting. In the long run, regardless of job category or position type (full time vs. contingent), this equates to higher quality talent, increased performance and output, and greater satisfaction among client managers.
For complementary talent, the consolidation of an MSP program offers clients more competitive rates and overall cost savings. For permanent workers, this may not always be the case. However, in conjunction with their staffing partners, MSPs have the expertise and tools to frequently assess comparative compensation structures over the marketplace to find the best workers at the most competitive rates.
MSPs become a single point-of-contact for time impoverished hiring managers
MSPs currently handle all aspects of the contingent workforce, and they save hiring managers countless headaches by serving as the single interface between workers, client departments and staffing suppliers. There’s no reason this incredible benefit couldn’t extend across the entire blended workforce. The same co-employment risk mitigation strategies for contingent workers would remain in place. Staffing suppliers would continue to oversee their workers, MSPs would still be responsible for invoicing and distributing payments to vendors, and the client’s HR would handle the needs of internal staff.
MSPs facilitate cooperation among staffing suppliers, contingent workers and clients by ensuring that the relationship is well defined and that each party complies with its obligations as delineated in the terms of the executed agreement. MSPs, however, have tremendous visibility into the entire workforce. They can be excellent resources for reporting observed issues to the appropriate client personnel. Beyond that, an MSP could potentially evolve into a Professional Employer Organization (PEO) — a provider that clients can outsource employee management tasks to, such as benefits, payroll, workers compensation, recruiting, risk management, and training and development. The recent Uber ruling has inspired legislators to begin considering revisions to existing co-employment and misclassification standards, which are out of date with 21st century needs. This could pave the way for MSPs to take on greater involvement with the entire talent population for their clients.
MSPs ensure transparency
MSPs and their staffing suppliers aren’t burdened with the external obligations that client managers face. Overseeing the needs of the workforce is their core task. They also have the technologies and resources to create, monitor and report on key performance metrics, ensuring that clients have complete visibility into their operations.
Right now in the staffing industry, experts are exploring a series of important trends: reliance on predictive analytics, the curation of data-driven decision processes, incorporating new categories of contingent labor into the blended workforce, the emphasis on cultural fit, the relevance of social recruiting and employment branding, and bolstering workplace diversity. Yet, underlying all these trends, we seem to find one predominant theme — transformation. It’s not just that old institutions are crumbling; the rate of decay is increasing exponentially from month to month. To keep up, we must not only embrace change, we must actively transform and evolve.
As the workforce itself continues to blend, MSPs could soon transform into powerful new structures that drive business success to unprecedented heights for clients of all shapes and sizes.