Introduction
Contingent staffing, outsourcing, behavioral
hiring. All have become commonly used buzz-words
among human resource and staffing industry
professionals. While the terms refer to
different activities, their intent is the same:
gain competitive advantage by implementing new
tactics and strategies in the hiring and use of
labor. If you are familiar with the current
trends in staffing, that's great. If your
organization is benefiting from their
implementation, that's even better. If you are
interested in learning more about current
strategies and tactics in staffing, read on.
This article outlines several popular staffing
trends and provides an introduction to their
use.
Contingent Work Force
Call it downsizing, rightsizing or a layoff.
Companies throughout the 90's have been trimming
their staffs to eliminate waste and focus on
their strengths. These cuts have led to the
development of the contingent work force - the
people who are called in on a short-term or
project basis. While using temporary help is
certainly not a new concept, incorporating
staffing as a part of an organization's
competitive strategy is.
Companies are turning to contingent workers for
a variety of needs. The idea driving this trend
is simple: bring in people to meet the demand
for labor or expertise only when those people
are needed. Companies executing this strategy
are able to reduce fixed expenses by maintaining
a smaller direct (or permanent) staff. When work
loads increase, they are able to bring in top
quality temporary workers using a human version
of a just-in-time inventory system. As an added
benefit, the cost of a contingent worker is
often lower than that of a full-time employees
due to the elimination of benefit expenses.
Today's contingent work force crosses all lines
of business and areas of functional
responsibility. While temporary help used to be
thought of as clerical support, the term has now
come to encompass industrial, engineering,
information technology and professional
positions. In many parts of the country, the
fastest-growing category of temporary workers
are interim executives - from marketing and
financial experts right up through CEOs. The
following are the major staffing trends
associated with the contingent work force.
| Supplemental Help |
Fill-in for short-term demand such
as a vacation or special projects.
Using supplemental help allows
existing staff to focus on more
pressing business. It frees them
from time-consuming tasks that
disturb work flow and do not add
much value. |
| Variable Capacity Staffing |
Strategic use of temporaries to
accommodate workloads which are
known to vary in seasons or other
cycles. This results in consistency
between the amount of work to be
done and the available number of
employees, keeping direct employees
working at peak effectiveness. In
some instances, employers have
actually developed a shared work
force that rotates from one business
to another to accommodate each
company's unique seasonal needs.
|
| Vendor-on-Premises |
The temporary help supplier provides
an on-site coordinator for temporary
employees at a client company.
Typically, these arrangements are
made by large volume staffing users
to simplify coordination and
increase both productivity and
quality across a variety of
departments or functions. |
| Facilities Staffing |
The temporary help supplier assumes
responsibility for staffing certain
jobs or departments with
disproportionately high turnover,
driven by routine or mundane work.
Employees are "rotated" into and out
of these positions based upon
productivity. As a result,
performance and quality increase,
while the employer's liability and
headaches are reduced. |
Hiring Options
The demand for good people is certainly not
something new. Business executives commonly
complain about the difficulty in finding and
hiring producers. To handle this difficulty,
many people are taking new approaches to making
the hiring decision. An overview of two major
tactics being used by hiring authorities
follows.
Behavioral Hiring
Have you ever selected a job candidate based
almost solely on that person's past work
experience? Have you ever ignored a nagging
doubt about a job prospect's attitude or
personality, hired and later regretted your
decision?
According to Ed Ryan, President of MPR
Consulting, companies put too much emphasis on
education and experience while neglecting two
attributes he says earmark a successful
candidate: behavioral traits and chemistry.
When filling a position, managers often prepare a
description detailing the duties of the job.
Unfortunately most people stop here. Missing is
a description of the types of behaviors
necessary to successfully execute these duties -
a behavioral traits profile. To develop a
behavioral traits profile for an available job,
you must identify the company's top performers
in that position. Ask yourself: "What makes
these people so good?" The answers will help you
uncover the behavioral traits necessary to
succeed in this position.
Once a profile of the ideal job candidate has
been prepared (and all the traits necessary for
success have been identified), the hiring
process can begin. Following a behavioral hiring
methodology, every candidate must be put through
a structured interview. The standard interview
questions are designed to determine if a
candidate possesses the desired personality
traits. Those individuals having the right
attitude and behaviors then undergo a review of
skills and experience.
The next time you have a need to hire you may
wish to consider the importance of behavioral
traits and chemistry as well as experience in
your hiring process. If you are not sure how to
implement behavioral hiring, contact a staffing
service or industrial psychologist who is.
A partial list of traits:
| Intensity |
Very high stamina, endurance and a
high level of work orientation. |
| Values
Risk Avoidance
|
A solid ethical system, refuses to
cut corners or over-promise.
Acts responsibly, avoids breaking
rules.
|
| Stress Tolerance |
Manages stress well. |
| Focus of Control |
Level of responsibility a person
takes for his job and his actions.
|
| Independence |
Ability to work well with minimal
supervision. |
| Optimism |
Positive outlook on situations,
ability to learn from mistakes and
move on. |
| Leadership |
Skilled at directing and leading
others. |
Temp-to-Direct Hire
Temp-to-perm enables companies to test an
employee on-the-job before committing to direct
employment. This trend has become popular
because it alleviates some of an employer's
fears of making an incorrect hiring decision.
This strategy is an excellent way to lower the
risk associated with the hiring decision. On the
downside, however, many of the best applicants
for a given job opening may be currently
employed. These people are rarely willing to
leave their current job for a temporary position
even when the opportunity for permanent
employment exists.
Professional Employment Organizations
(PEOs)
Employee Leasing
Employee leasing is a service provided by a PEO
or Professional Employer Organization. According
to the National Association of Professional
Employer Organizations, a PEO is a company that
provides "integrated business services which
more cost effectively manage critical human
resource responsibilities and employer risks for
its clients." More simply put, a PEO firm takes
over the responsibility for a significant
portion of the employer's functions for the
workers assigned to their clients. The PEO firm
contractually assumes the employer rights,
responsibilities and risks. Included in those
rights and responsibilities are the payroll
processing, tax withholding, worker's
compensation insurance, employer's share of
social security tax, unemployment tax and
benefits provision and administration for the
leased employees.
Payrolling
Payrolling is a service offered by most
temporary staffing services. Unlike leasing,
which is a relatively new industry, payrolling
has been around for a long time. In many
respects, employee payrolling is like employee
leasing. The mechanics are almost identical - a
current employee is placed on the payroll of
another firm. The payrolling firm is responsible
for the payroll processing and administration
including creating the paycheck, handling the
statutories and governmental reporting, and
supplying unemployment compensation. One major
difference between payrolling and leasing is
that most payrolled workers do not receive
medical benefits.
What most often differentiates payrolling from
employee leasing is the scope of the agreement.
Payrolling is frequently a project-based service
used for temporary and other short- to
medium-term personnel requirements. Leasing, in
contrast, is designed to be used as a permanent
solution to payroll and benefit administration
needs. The question facing employers is: Why use
either service?
A number of forces in the marketplace cause
companies of all sizes to look at alternative
staffing arrangements such as employee leasing
and payrolling. One such force is the increasing
regulatory burden of being an employer.
Government reporting, compliance and
administration are consuming an ever-increasing
share of businesses' time and resources. At the
same time, these organizations are being forced
to "do more with less" due to increasing global
competition and decreasing product life cycles.
Is employee leasing or employee payrolling right
for you? It depends on what your company is
trying to accomplish. Both services increase
productivity and reduce risk.
Payrolling and employee leasing eliminate the
paperwork, reporting and administrative burden
of human resource management. For many small to
medium-sized companies, these services provide
key managers the freedom to focus on those
activities which are most critical to the
success of their businesses.
Employee leasing or payrolling may provide your
firm with solutions to the headaches of
personnel selection and administration.
Outsourcing
Outsourcing has become a popular cost-effective
method to manage non-essential functions while
maintaining focus on the company's core
competencies. What is outsourcing? Simply put,
outsourcing is having an outside company take
over some function of your business. Some
business functions have always been outsourced.
Accountants, attorneys and consultants are
essentially providing outsourced services. The
difference now is that companies are taking a
hard look at their business, and determining
which functions are most critical to their
success. All the non-critical activities are
then turned over to an outside provider (or
providers) who can perform the function either
at lower cost or with greater productivity.
Many market forces continue to drive the need
for outsourcing:
- Accelerating technology has provided new
product and systems capability. Taking
advantage of this phenomenon, however,
requires ever-increasing levels of
understanding and expertise.
- Heightened customer expectations in areas of
quality, service and price performance have
required increased attention to detail.
- Declining product and service life cycles
and an increasing need for customization has
produced a myriad of added headaches for
business.
- Globalization has created new challenges as
well as new markets and new economic rules.
In short, competition and a changing marketplace
are squeezing business from all sides. Companies
must spend more time concentrating on the
specific products or services they represent.
They must reduce costs, reduce head count,
flatten the organization, and redirect and focus
management to increase profitability.
Outsourcing offers one way to reduce management
involvement by eliminating specific
administrative activities. The outsourcing
partnership between company and service provider
can:
- Reduce the cost and hassle of
labor-intensive activities. For example,
telemarketing may be an important part of a
company's marketing strategy; however, it is
a type of work that is plagued by high
turnover. Rather than suffer the expense,
aggravation and morale problems that can
result from frequent turnover, this function
could be successfully outsourced to a
company that specializes in recruiting and
training. The service provider should be
better equipped to deal with the turnover
and will take away the administrative burden
of the HR functions.
- Lead to improved performance in areas
impacted by improved technology. A service
provider like EDS in information technology
or MCI in telecommunications has
state-of-the-art expertise in the hardware
and software needed to enhance a company's
technological operations. For many small to
mid-sized companies, technology investments
can be cost prohibitive. Through
outsourcing, the costs of technology are
shared with the other users of the service
provider. Even for larger companies, the
service provider's expertise with the
technology helps assure greater efficiency.
- Add extra value through a risk-sharing
relationship. For instance, outsourcing a
mail room off-site might allow the service
provider to run multiple shifts using
existing equipment. By selling mail room
services to other firms in need, the
outsourcing provider can turn this support
function into a profit center. The risk and
the reward may be shared through a
partnership or strategic alliance between
the outsourcer and the service provider.
To determine if outsourcing is a viable
alternative for your company, you must create a
well-defined plan. Conduct an internal
assessment to define your firm's core functions.
In doing so, you may discover non-core functions
which are appropriate for outsourcing.
If you discover areas to be outsourced, the next
step is to determine what service providers
offer the expertise you require. In selecting a
service provider, you are choosing a partner for
your company. Be very selective! Find a partner
with experience, traits and chemistry that blend
well with your company. Interview and reference
check all candidates to insure that the provider
can do the jobs and will provide the level of
service you want.
