February 01, 2015

Questions That Arise From Non-Employee Workforce Growth

There’s been much talk recently about the rise of the non-employee worker and on strategizing to win the talent war. Companies have been actively seeking new ways to find the right talent, and one strategic approach is the growing reliance on contingent labor.

Historically, employers relied on temp labor to fill skill gaps during economic downswings, but when the economy improved, they tended to focus on building a strong internal workforce of full-time permanent employees. Today, however, even as the economy is improving, companies are increasing their dependence on contingent labor. Workforce 2020, a study conducted by Oxford Economics, finds that 83 percent of executive managers plan to increase using non-employee workers on an ongoing basis.

A study by Accenture recently estimated that non-employee workers make up between 20 percent to 33 percent of the workforce in the United States. These workers are found in all classes of work - from the executive suite to factory line workers - in every industry.

Managing and building this new workforce of non-employee workers requires changing the way companies approach compensation, technology, and engagement. According to Workforce 2020, approximately one-third of respondents said that increasing their reliance on non-employee labor required additional investment in training, changes in HR policies, and support for new technology.

Impact of Changing Nature of Workforce

Impact of Changing Nature of Workforce

Source: Workforce 2020 & Oxford Economics

The changes that result from the growth of the non-employee workforce raises many questions. Traditionally, the procurement department was involved in the contingent labor spend, and they focused on minimizing costs. While labor cost matters to all business leaders, the HR team is important in incorporating non-employee labor into the overall strategy of the entire workforce. So it becomes vital for both functions to work together and analyze the data to determine some of the common questions that arise on establishing and managing a strong relationship with non-employee workers.

These questions can include:

  • How do we engage this extended pool of talent?
  • How do we ensure that we have the right talent working on the right thing at the right time in the right place?
  • How do we put a border between full-time employees and non-employees, but still manage and engage both as part of our overall workforce?
  • Can we include non-employee workers in performance management?
  • How do we include non-employees in our talent pool?
  • Can we include non-employee workers in succession planning?
  • Does our talent brand include and mean something to non-employee workers?

Thinking differently about the workforce is only part of the puzzle. Managers must think about considering non-employees for talent pools and other workforce solutions, while still ensuring regulatory compliance and safeguarding against the leading areas of temporary workforce risk.