Jessica Kane, Chief Client Officer, Magnit.
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Is your organization ready to flex and adapt to changing economic conditions—like a potential recession? If your talent strategy and workforce planning don’t include your contingent workforce and talent intelligence, the answer is no. These capabilities can be critical drivers of business agility in today’s market, and organizations that aren’t prioritizing them at the C-suite level could be committing an error of enormous consequence. But it doesn’t have to be this way.
Let’s look at how workforce agility can help drive growth, scale and strategic flexibility; the critical role the contingent workforce and talent intelligence can play to make this happen; and the steps you can take to increase agility.
Workforce Agility Is A Lever For Growth, Scale And Strategic Advantage
In a January 2022 PwC survey, C-suite executives identified “increasing agility to better operate in a turbulent business environment” as one of the top three factors that were very important to their organizations’ continuing growth. That was before the economic turbulence of the last six months, including the highest U.S. inflation increases in 40 years.
The agility of a business is dependent on how its workforce can be reconfigured when new challenges and opportunities arise. There are plenty of challenges in the mix today—not only a potential recession but also rising labor costs and intense competition for talent. In this current environment, an agile workforce is the necessary fuel to drive sustained growth and profitability. I believe the contingent workforce should now be a high-octane additive.
Recession-Proofing With An Agile And Contingent Workforce
Today, savvy organizations are leveraging the contingent workforce to drive agility and flexibility in addition to better managing workforce spend. Organizations can compare and optimize their choices of full-time employees or contingent workers as the situation dictates. Integrated planning and enhancement of a mixed workforce can occur across a range of business scenarios in which agility and flexibility are integral to success, including when:
• A recession is looming or recovery is getting underway
• A new market entry, product launch or location expansion is being planned
• A merger and organizational integration are being assessed
• A digital transformation is driving the decommissioning of legacy technology
So, for example, in a digital transformation initiative, if the organization is moving away from an on-premises SAP installation to S/4HANA in the cloud, new skill sets will be needed. Whether it’s backfilling legacy workers or deploying new workers with in-demand skills, contingent talent can be utilized when and as long as needed. What’s more, HR leaders can leverage talent intelligence to identify and optimize direct sourcing, redeployment and FTE conversion opportunities, allowing the initiative to progress faster.
Jump-Starting Your Organization’s Agile Workforce Transformation
Infusing critical skills of contingent workers can help drive important initiatives and accelerate business outcomes. More strategically, businesses can proactively integrate the contingent workforce into the planning of mission-critical initiatives.
Senior executives who want to drive business agility can take these three steps to jump-start their organization’s agile workforce transformation:
1. Adopt a different perspective on the contingent workforce’s role.
The contingent workforce should now be viewed as a strategic capability—a flexible source of labor, skills and expertise that can drive higher levels of business agility and performance. Today, the use of a contingent workforce can go beyond a single hiring manager’s one-off “purchasing exercise” to meet an isolated need to be part of the higher-level planning and execution of enterprise initiatives that may span months or years.
Action: Get key executive stakeholders in HR, procurement, IT and finance on board with the vision. Start the discussion of why it's compelling and what it looks like compared to the status quo.
2. Evaluate your current approach and capabilities.
The era of siloed VMS reporting of program data, bolt-on BI solutions and unintegrated rate benchmarking is receding into the past. Today's business environment requires a more comprehensive approach from business leaders. That means leaders should prioritize visibility into the entire workforce—down to the level of active and adjacent skills—as well as access to current market cost, supply and trends.
Action: Evaluate your current capabilities and identify gaps or shortcomings that are limiting workforce visibility and agility—across both contingent and full-time hires. As needed, address these areas to increase efficiency, better manage workforce spend and improve program results.
3. Pilot a data-driven workforce optimization plan.
Taking action is the best way to learn. While aspiring to a more strategic and expansive use of talent intelligence, don’t go all in—start by placing some smaller bets. Identify a suitable initiative or an area of the business and a specific use case where some talent intelligence capabilities can be applied and tested incrementally.
Action: Avoid falling victim to the dreaded “analysis paralysis.” Instead, just start somewhere; achieve quick wins and use these as proofs-of-concept. Educate others on the power of the contingent workforce today and what it can deliver.
The world won’t wait. Organizations today need to increase their business agility as rapidly as possible. This requires focused, concrete action. Such action can now be taken to leverage contingent workers in new, high-value ways. Doing so in mission-critical initiatives can give organizations the ability to continue to grow, scale and achieve ongoing strategic flexibility and gain an edge in today’s complex business environment.
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