As the importance of specific skills to the overall economy increases, so does the popularity of contract work, writes Allan Schweyer
Today’s employment marketplace con
sists of a diverse composition of
labour and talent from a variety of sources.
Among them is a group that is collectively
known as contracted talent or the contin
gent workforce. This group includes con
tractors, consultants, freelancers, tempo
rary help, interim executives and others
who are not part of an organisation’s full-
time or part-time workforce.
A Human Capital Institute study recently
found that more than 90 per cent of the 319
organisations surveyed use contract talent.
Moreover, 34 per cent say that their use of
contract talent has increased or increased
dramatically in the past three years, while
fewer than 20 per cent report a decrease.
The role of HR
Given the importance of contract talent and
organisations’ emphasis on skilled and pro
fessional level contractors, one would expect
that HR or talent management professionals
would be in firm control of the process.
After all, even in firms where line managers
are conversant with the principles of talent management, HR and talent management
professionals remain the custodians of com
petency and skills management, quality of
hire measures, regulatory compliance infor
mation, market rates for various talent and
the best sources for talent acquisition, to
name just a few. To achieve volume, quality,
performance and compliance in a contract
talent management program then, HR and
talent management must be involved.
According to the respondents to our sur
vey, HR/talent management is indeed in
volved in the process more often than not.
57 per cent report that HR is either primarily
or partially responsible for contract talent
management. It is alarming, however, that a
full 43 per cent of organisations appear not
to involve HR/talent management at all in
contract talent management. This almost certainly leaves those organisations at a disad
vantage, and one that will grow as more of the
workforce is comprised of contract workers.
Shifting the balance
With a compelling need to respond quickly to
marketplace dynamics, most businesses are
continually looking for ways to benefit from
the flexibility of converting fixed-cost struc
tures to variable ones. One way companies
accomplish this is to reduce their number of
full-time hires in favour of contingent or con
tract talent engagements.
Yet few organisations appear to be ready for
this shift. Contract talent management tech
nologies are underutilised and responsibility for
contract talent acquisition and management is
often too narrow in organisations or is a free for
all, with few rules and little accountability. Con
sequently, the contract talent pool is too often
ignored and undermanaged, resulting in higher-
than-necessary costs and risks.
Approached strategically, the contingent
workforce can provide key skills and compe
tencies on a just-in-time basis with greater
flexibility and reduced wage and benefits
costs. To deliver on this potential, the com
bined and aligned efforts of several parts of the
organisation are needed, including procure
ment, legal, IT, senior management, business
units and HR/talent management.
Regrettably, in many organisations, HR and
talent management professionals are marginalised where the management of contract talent
is concerned. Yet it is clear from our research
that if this increasingly critical component of the
workforce is to be managed effectively and
strategically for competitive advantage, HR and
talent management must play a prominent role.
This article contains excerpts from HCI’s January 2009 whitepaper: The State of Contract Talent Management and the Role of HR. To download a copy, please visit www.hci.org