Non-traditional staffing initiatives

HR profesionals need to guide the deployment of staff

As organizations move from the occasional use of non-traditional staffing to making it a vital part of their competitive strategy, HR professionals need to provide guidance to management and purchasing professionals to ensure that cost reduction does not become the only driver and result in dysfunctional outcomes such as people being treated like desks. HR professionals should ensure that non-traditional staffing initiatives lead to competitive advantage.

Recently, a large company put out a Request for Proposal (RFP) for temporary staffing. The purchasing department’s criteria for pre-qualifying possible suppliers included annual revenue, per cent of business in specific areas (call centre, IT, etc.), and office locations. The RFP, however, did not include the single most important factor: the level of satisfaction with the current three suppliers in meeting the company’s staffing requirements.

The end users had no input on the selection process and could have sacrificed valuable relationships if the track record with the firm had no bearing on the selection process.

The world of work has changed forever. Many firms have decentralized their HR functions and now expect their managers to perform what was traditionally considered HR functions, including non-traditional staffing initiatives. Few would argue that based on competitive circumstances and a tight labour pool, the use of non-traditional staffing initiatives has begun to transform the workplace. These initiatives include using temporary workers, independent contractors, PEO/Payrolled, retired workers, job sharing, and work-at-home programs.

Looking Towards the Future

The United States has embraced non-traditional staffing solutions for many years. It is not unusual to find small towns with a few thousand people where a local staffing service is providing hundreds of workers to a few factories.

In Canada, the acceptance of non-traditional staff is growing rapidly. The big banks spend tens of millions of dollars on temporary staffing each year. Some factories and call centres, for example, have no external hiring — a large percentage of their workforce is from temporary staffing services. When you call to order a pizza, the person taking the order may be sitting at home rather than in an office. These companies have agreements that allow them to select their core staff from this temporary pool.

Using our own head office at The Keith Bagg Group as an example, we supplement our 50+ core staff with independent contractors working on our computer systems, temporary employees helping to cover special projects and peak workloads, and data entry staff working from their homes.

It is important to understand what is driving firms to utilize non-traditional staffing initiatives. There has been a strong movement toward focusing on “core business” functions. This is a shift from the 1980s when firms relied on being “self-sufficient,” to a change in style where it is acceptable to use outside resources such as staffing firms (often referred to as agencies) and independent contractors.

Sustained economic growth and strong consumer confidence, coupled with short-term constraints has resulted in many firms trying to use whatever methods are necessary to increase production.

While demand is high, so is customer expectation and competition, leaving no room for waste. It is not uncommon in many industries, such as consumer electronics, to expect constantly improving products with the same or decreasing prices. This results in pressure towards cost reduction. In many firms, human capital is one of the largest costs, resulting in great scrutiny.

Record low employment results in challenges for most firms in finding enough qualified labour to meet their demands. Suddenly there is much greater flexibility in utilizing whatever means necessary to get the job done. Retirees, job-shares, independent contractors (sometimes called “consultants”) are looking more attractive. Alternatively, some companies are letting staffing firms take over the responsibility for a set portion of their workforce and to do some or all of their recruiting.

One leading Canadian employer found they had enough “clout” with staffing agencies to get such a low fee based on their massive volume for recruiting that they were able to close their recruiting centres. Likewise, some firms with large temporary pools select their core staff from the “cream” of their temporary pool, eliminating the need for an ongoing recruiting process.

Recommendations

Recognize the intrinsic value of people and more specifically a non-traditional workforce. Most organizations recognize the value of their employees and society as a whole, why should your non-traditional workers be any different? Treat your non-traditional employees with the same respect you would your traditional employees, such as fair pay and a safe work environment.

Many individuals in reputable organizations, possibly your own, are unaware of co-employment issues that can result in unforeseen costs, fines, lawsuits, liability for deductions, unionization, negative publicity and disruption of the traditional workforce. Know who is the “employer of record.” If the people are from a staffing service (a “temp”), know what your responsibilities are and the responsibilities of the staffing service. For instance, if the staffing service is responsible for scheduling, let them do their job. An innocent answer of “no” by a supervisor at a bank to a temporary staffing service employee’s request for time off was enough to end up with a Human Rights complaint based on religious discrimination. The supervisor should have told the temporary employee to call their supervisor at the staffing service.

Make sure independent contractors are truly independent. A contract that says a person is an independent contractor doesn’t necessarily make them an independent contractor. Instead, you must evaluate the relationship against specific legal tests and may want to seek legal counsel on this. For legal reasons, he may be considered an employee, resulting in the employer being liable for tax and statutory deductions. Failure to properly classify independent contractors can result in the employer being fined and even liable, in some circumstances, for the employee’s own personal taxes.

HR can play a vitally important role in ensuring that business objectives are met. Abdicating responsibility for non-traditional staff can deprive an organization of valuable input on people issues.

Geoff Bagg is president of The Keith Bagg Group, an independent recruitment firm in Toronto. He can be reached at (416) 863-1800 or [email protected]

Latest stories