3 Things You're Likely Doing Wrong With Your Contingent Workforce

Rich Gardner
August 17, 2017

Developments in technology and independent labor demographics have dramatically changed both the quantity and the caliber of external talent available to companies on demand. Today, contingent talent pools are far more diverse than the temps and hourly contractors that most companies have based their contingent programs around.

The June 2017 commissioned study "Address Critical Skill Gaps With On-Demand Knowledge" conducted by Forrester Consulting on behalf of Catalant has highlighted how this new reality has opened opportunities for companies to fill significant talent gaps in their teams.

However, as Catalant engages hundreds of companies in the Fortune 2000, we've learned that too often companies have structural barriers in their contingent program that are holding them back from taking advantage of these opportunities. Here are the top three impediments we see:

1. A Gap in the Talent Supply Chain

Independent talent is not new. Companies have been engaging IT contractors, freelance designers and temporary workers for decades. Even on-demand talent is not that new: The predecessor companies to freelancer marketplace Upwork launched almost 20 years ago.

What is new? Technology now makes it possible for a company to engage elite business talent — knowledge workers — trained at some of the leading professional services firms and operating companies in the world from their laptops and ipads. This is a blind spot for many contingent programs that see the world of external talent in two distinct categories: talent that comes from a traditional staffing supplier OR talent provided by a professional services firm. What happens to talent that spent time at one of these professional services firms and is now independent? Unfortunately for many companies, this talent pool, which can deliver disproportionately positive results to their business, is missing from their supply chain.

2. A Lack of Risk Calibration

Organizations that have not calibrated risk to the realities of on-demand workers--and recognized different categories of on-demand workers--are also facing challenges. Managing enterprise risk is a key driver of how many contingent programs are structured. This is not surprising, of course, given the costs of human capital and the exposure to company systems and personnel. To some companies, fear of risk is paralyzing, shutting down any innovation in talent management or otherwise. Others, though, have realized that by starting to reasonably calibrate their risk protocols, they can avoid catastrophe for the company and still reap the rewards of on-demand talent.  

Let’s take insurance, for example. If your company is engaging McKinsey & Company or a similar firm for a 6-month project involving your most sensitive company and customer information, by all means, you should require tens of millions of dollars in various insurance protections. But what if, instead, your strategy team simply needs an independent consultant to work entirely offsite over a couple of weeks on a market research project requiring no access to proprietary company systems? Does it still make sense to require tens of millions of dollars of insurance coverage for that consultant? Increasingly, companies are realizing that it does not. And that’s good news because not many independent consultants have $10 million insurance policies.  As I heard at a recent contingent workforce conference, “you could probably buy insurance protecting against a dinosaur attack on your office building, but that does not mean that type of risk management is reasonable.”

3. A Blind Spot with Your MSP  

Finally, organizations must explicitly make on-demand knowledge talent a priority for their MSP. Many companies engage an MSP to build and manage their talent supply chain and likely depend on them to be the eyes and ears out in the talent ecosystem so that the CEO and executive team can focus elsewhere. That works great if you have made on-demand talent a key part of the MSP’s mandate. If you have done that, is your MSP bringing innovative talent partners to your attention? Even more important, are they effective thought partners in explaining how you work with these solutions (process changes you need to make, stakeholders to bring to the table, etc?) If not, you have a significant blind spot in building your talent supply chain.

These are three major obstacles we often see at companies struggling to leverage on-demand talent solutions to meet critical skills gaps at their company and in their talent supply chain. The good news? Newton’s Third Law applies here and for each example of an organization facing a challenge in one of these areas, there is a counterexample from an innovative company finding success with its contingent workforce. At Catalant, we see a lot of both, and we are happy to share the best practices we have observed.

Read more from the June 2017 commissioned study "Address Critical Skill Gaps With On-Demand Knowledge” conducted by Forrester Consulting on behalf of Catalant.

Featured in: Enterprise Change

About the Author

Rich Gardner

Rich is the VP of Strategic Partnership for Catalant. He is a proven operating executive with 15+ years of experience building, leading, and developing high-performing teams in diverse settings, including global B2B sales of professional/information services, high-growth non-governmental organizations, and political campaigns.

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