Contingent labour poses challenges for HR

Outsourcing providers offer collaborative service delivery models

Talent acquisition teams face an urgent and unprecedented challenge: The world is hurtling toward a skills gap of 85 million people, making the global talent shortage the number 1 emerging risk for organizations already hard-pressed to keep pace with transformative technologies.

As business leaders turn to HR for answers, it’s clear that filling requisitions is no longer enough. Talent acquisition teams are poised to take on a far more strategic role, one that will redefine how companies align work with business strategy and leverage outsourcing to engage all talent categories.

Several key trends are reshaping how savvy HR leaders address the challenges at the heart of strategic workforce planning:

Changing objectives

As objectives change, this opens the door for HR to drive new business value through collaboration.

For 20 years, companies were able to rely on cost-out as the core strategy for managing contingent labour: first, through early vendor management programs that revealed and reduced rogue spend; then, through a global recession that gutted company budgets and created a glut of available talent.

Procurement — with its expertise in managing vendors and driving down prices — became the de facto owner of contingent outsourcing. But the cost-out bubble has burst. Employers around the world are facing an acute talent shortage as populations age and skills shift.

The supply-demand equation has flipped in talent’s favour, upending the balance of power and disrupting outdated strategies that are not equipped to attract talent in a healthy economy with record-low unemployment.

At the same time, executives are recognizing that a siloed approach to talent is the top barrier to strategic workforce management. Today’s fast-moving, high-tech war for talent requires not only that procurement and HR work in unison, innovative outsourcing providers also need to be engaged.

These external partnerships have evolved well beyond traditional outsourcing. Forward-thinking firms now offer collaborative service delivery models that range from automation and digital transformation to global business services and shared services, using everything from chatbots to predictive analytics.

Independent talent

With less permanence, there’s explosive growth in free-agent talent. While companies have long relied on a mix of full-time workers, technology and outside partners to execute business plans, the current speed of innovation is disrupting the entire supply chain.

Artificial intelligence (AI), machine learning, robotic process automation (RPA) and a flurry of other tech advances are altering occupations, redefining the work humans do and how they do it.

At the same time, technology is fuelling the growth of the gig economy, spawning dozens of online talent platforms while giving workers more workstyle options than ever. 

These workers thrive on freedom, flexibility and empowerment, with many actively choosing the independent workstyle over full-time employment. Seven in 10 senior managers say that integrating free-agent or gig talent into their workforce will be important to their companies’ ability to remain competitive over the next two years, according to a 2018 Havard Business Review survey with 411 respondents.

The explosion of independent talent poses a daunting challenge for HR leaders, who must redefine the “candidate experience” more holistically and redesign their workforce to align with ever-changing business objectives, technology advances and new labour market realities.

And outsourcing partners can help identify opportunities for automation and determine the right mix of full-time and contingent talent to meet the needs of the business.  

Talent acquisition

Facing intense pressure to continually adapt and differentiate, companies find themselves dependent upon a dynamic labour pool that defies commoditization, crosses multiple labour categories, enters the pipeline from numerous sources and increasingly wants to work on its own terms.

Workers across all categories are increasingly demanding a customized experience on par with the consumer experiences they enjoy in their personal lives. While some targets are digitally driven — such as using AI and chatbots to improve the hiring process — strategic outsourcing partners know that the human experience remains key.

For example, they can take a talent segmentation approach that delves beyond traditional demographics to identify:

• attributes and behaviours that shape talent’s preferred workstyles

• how they feel about skill development and new challenges

• whether they eagerly accept change or prefer the status quo

• how they perceive employer brands.

This type of talent segmentation offers a more complete lens through which to identify, market to, engage with and retain the individuals who align to a given workforce strategy. It also helps leaders make smart adjustments as that strategy changes.

Today’s talent acquisition teams face daunting demands, but outsourcing providers are helping HR partners take on a more strategic role. Together, they are navigating the complex intersection of work, employees and technology, and redefining the value they bring to businesses worldwide. 

Tammy Browning is vice-president and managing director of global operations at Kelly Services in Folsom, Calif. For more information, visit

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