The Contingent Workforce: What You Need To Know About This Growing Labour Pool

The Contingent Workforce

With the rise of the contingent workforce today, organisations are able to widen the talent pool they access. In this article, Fariz Abdullah shares some key considerations for those considering employing a contingent workforce.

What is an example of a contingent worker and how does this differ from other types of workers?

Fariz: As the name suggests, a contingent worker is someone whose position within the organisation is temporary. Typically, such an individual is not an employee of the organisation and therefore, not a permanent hire.

Organisations employ these workers to fill gaps within their business. These can range from highly skilled positions (such as a finance manager) all the way through to administrative ones (such as a marketing executive or warehouse assistant). These can occur across a range of business domains including customer service, tele-marketing, service desk support, finance, operations and more.

When an organisation chooses to contract such a worker, they may employ an HR outsourcing firm to do so. In such a case, the worker remains on the firm’s payroll but their job scope is determined according to their client’s (the organisation concerned) requirements.

When would an organisation typically consider the need for a contingent workforce?

Fariz: Generally, there are two reasons why an organisation may consider a contingent workforce:

The organisation does not want any administrative hassles
Managing employees involves time-consuming activities and processes throughout the employee lifecycle (that is attraction, recruitment, onboarding, development, retention and separation). With a contingent workforce, organisations bypass some of these processes and can fill positions promptly even when faced with sudden resignations. They are able to do so because the HR outsourcing firm has a ready talent pool available.

The organisation is addressing a sudden need 
Organisations are increasingly facing a disruptive, agile business environment. As such, they  often are required to act quickly in response to changing business circumstances or to take advantage of opportunities presented quickly. A contingent workforce enables an organisation to respond appropriately as the need arises.

What are a few hiring options available alongside contingent workers and what are some of the benefits of each of these options?

Fariz: We recommend two options.

Fixed-term contract (Contract Workforce): This enables the organisation to bring in workers strictly for fixed term projects/assignments (ranging from 1 – 24 months). There would be flexibility to ramp-up/down based on project/assignment needs. This, in turn, reduces an organisation’s liability and cost as contract staff work on a full-time basis yet are not entitled to the full benefits accorded to full-time employees. Additionally, contract staff transition seamlessly at the end of the contract without any administrative burden to the employer.

Part-time contract (Temporary Workforce): This helps fill short employment gaps that organisations face due to seasonal recruitment needs or a sudden need for a particular skill set. This could include replacement staff for employees who have taken leave. Roles could range from data entry and front desk/reception to product/service launches or sales. It can also assist with managing the temporary increase in production targets or higher call volume.

As these roles are flexible and can last anywhere from a few hours to a few weeks, they present distinct advantages to the organisation in need i.e. pay for actual work done (based on hours or days) without the need to provide benefits such as annual or medical leave. As a result, organisations can widen their pool of skilled workers to include retirees and/or stay at home professionals who cannot commit to long/fixed term employment.

The Contingent Workforce: What You Need To Know About This Growing Labour Pool

What have you seen in terms of recent hiring trends, particularly in light of the COVID-19 pandemic? What are some of the benefits of employing a contingent workforce?

Fariz: I’d highlight, in particular, that a boom especially within the e-commerce industry translates to higher demand for the contingent worker. Additionally, as a result of the uncertainties caused by the pandemic, we have seen many other industries resorting to contingent workers, especially for short-term projects.

For local businesses, what is the impact of hiring local contingent workers?

Fariz: One of the most relevant aspects of hiring local contingent workers is that organisations need not worry about the HR aspects to hiring (such as recruitment and payroll issues). But like any other decision, the organisation must start by getting clear about the objectives of hiring for a given position and the particular skill gaps that they seek to address.

In your experience, are there particular industries or types of businesses that have embarked on contingent workers in a big way? If so, why?

Fariz: It’s been reported that 80 percent of large US corporations plan to increase the use of a flexible workforce in coming years, with contingent workers making up over 40 percent of the total workforce. In my experience, I see the e-commerce industry as one of the biggest supporters of this trend particularly as many manage load increases in warehouse staffing and seek to address seasonal needs (for example, during large and annualised sales campaigns).

Are there particular issues that an organisation, considering a contingent workforce, should be aware of?

Fariz: There are two issues, in particular, I would highlight. First, consider the project duration. For example, should a contingent worker be hired for over two years continuously, he/she would be considered a “contractually permanent” employee. For this reason, it is important that organisations clearly identify their skill gap and requirements for contingent workers as compared to their existing workforce to ensure internal equity.

Second, pay attention to the market rate for compensation. Organisations should review the kind of benefits provided and how the contingent worker could be compensated based on how they complete the project and other factors.

In your experience, what are common mistakes organisations make when hiring a contingent workforce?

Fariz: There are a number of common mistakes organisations make:

  • Not ensuring that the compensation package is commensurate with the value derived from the contingent worker
  • Not addressing clearly the primary reasons for embarking on a strategy that utilises a contingent workforce
  • Leaving communication gaps with such workers or not providing sufficient direction, thus preventing such workers from meeting performance targets and the like
  • Not developing clear plans for a long term contingent workforce to be retained or absorbed as full-time employees which, in turn, can lead to higher attrition rates of experienced workers.

What do you believe are some of the best ways to manage contractor or contingent worker processes including from a tech perspective?

Fariz: One of the most important aspects to managing such contractors is to ensure seamless automation across recruitment to payroll processing. There are quite a few tedious processes such as timesheet collection and processing. Automation simplifies this. Additionally, elements like geo-location help provide assurance to clients that staff are checking in as and when required.

In conclusion, the contingent workforce has been growing and this is expected to continue. Integrating such a workforce in the organisation will, however, require assessment of appropriate tools and strategies for successful management.


Author Bio

Fariz Abdullah is the Chief Executive Officer (CEO) of CXL Group. The organisation consists of two divisions— Contingent Workforce and Payroll & HR Outsourcing. Under his purview, Fariz has transformed CXL Group into an HR organisation that believes in the importance of advancing through technology but with a deep focus on the human touch in an increasingly digital era.

Does Diversity at the Workplace Matter?

Diversity can strengthen teams at the workplace

As Malaysians, we’re blessed to be a part of a country rich with resources, beautiful flora and fauna, and a melting pot of cultures.  Talk of diversity and inclusion has been a hot topic with some companies taking bold steps to ensure their employees are not just the industry’s crème of the crop but that they are part of an inclusive and accepting workforce. Today, diversity ranges from age, gender, ethnicity, religion, culture, education, physical capabilities and more.

A survey by McKinsey & Company has shown that diversity closely correlates to the company’s financial performance.  In the article that sums up the survey, companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Although this research was conducted amongst a variety of industries in Canada, Latin America, the United Kingdom, and the United States, similar sentiments are surely shared in many other parts of the world, including ours.

As this is the season to ignite our inner patriotism, with our country celebrating its 64th National Day a few weeks ago and Malaysia Day in just a few days, we thought to share some ideas on how companies can promote diversity in all forms, and leverage on its benefits.

Acknowledge the Need for Diversity

All efforts to promote diversity within a company will be meaningless if the key stakeholders do not acknowledge that there is a need for change. Surely easier said than done, but small steps to make a big impact often start with a single step forward. Take a good look at the company’s workforce, culture and processes that need to change to create a more inclusive working environment.  This will allow decision-makers to understand the gaps that are present in the current workforce and ways to move forward with new initiatives to drive inclusivity within a company.

Glassdoor also suggests for companies to communicate any initiatives clearly with employees. After all, who is better than your existing workforce to help hire and recruit new talents. However, be warned that although steps are taken to recruit diverse new hires, it is ultimately the company’s culture that will set the tone and increase the success rate of these initiatives in the long run.


Incorporate Diversity At Every Step of the Way

From early steps such as unbiased recruitment to creating groups for team-building activities, be sure that inclusivity is injected into everything the company does moving forward. If possible, take bolder steps and revise company policies, incorporate them into performance reviews and add on a diversity-friendly component to the company’s mission statement.

Training your HR staff to implement inclusivity, recognise potential biases and ways to deal with them within your organisation would certainly help to ensure proper steps are taken. Creating a council or panel consisting of diverse members will also allow employees to be more engaged with your initiatives while providing a judgement-free platform of idea-sharing with different perceptions. These are crucial in successfully creating an inclusive and diverse workforce.

 

Diversity at the workplace


Celebrate Diversity

One of the best things about being Malaysian is our celebrations— from Hari Raya, Chinese New Year, Deepavali, Hari Gawai to Christmas, we are spoilt with public holidays and a plethora of cultural activities as well as cuisine. Many companies opt to have celebrations for each festivity done company-wide, which is an excellent effort! But few celebrate Merdeka Day or Malaysia Day with the same amount of gusto.  Perhaps, this is something to consider celebrating for the coming years. It is the perfect opportunity to plan activities that make us Malaysian first! Decorate workspaces with our Jalur Gemilang and sing the national anthem together.  This creates closer-knit employee relations and possibly cross boundaries that we may not have even realised existed.

Similarly, as the world celebrates International Women’s Day, don’t forget to pay the same amount of importance to International Men’s Day!

Having a hiring drought? Consider hiring retirees that could impart some valuable life lessons and work skills to the younger generation. Many opt to continue working despite their age but lack the opportunity.

 

 

Having a diverse and inclusive workforce does not just benefit a company but as humans, it opens minds, gives perspective and creates an overall positive work environment. Indirectly, it helps improve productivity, teamwork and cultivate creativity. While this may be challenging but it is definitely worth a try. After all, in the challenging times we live in now, humanity could use a stronger sense of togetherness at home with their own families, and with their work family.

5 Progressive Ideas to Wow Your Employees

5 Progressive Ideas to Wow Your Employees
The HR department and personnel are playing a bigger role in an organisation than ever before. With changes brought about by the Covid-19 pandemic, businesses are forced to re-look and evolve numerous components of their business— from workforce management, business processes to workplaces. And, HR is at the forefront of the business’s fight against the impact of the pandemic. Ultimately, the survival of the business and safety of its employees remain top-of-mind. As business goes on, there have been increased talk of productivity as both employers and employees have now, likely, adapted to the new normal. Here are 5 ideas on how to keep your workforce engaged, motivated and productive.

1. Engage your workforce with digital tools

The Covid-19 pandemic has resulted in many workplaces opting to work remotely. Global Organisations such as Google has opted to have employees work from home until at least, June 2021. Closer to home, many companies still have their workforce working on a schedule, rotating to ensure physical distancing can still be practised in the office. The pandemic has brought about an interesting oxymoron‑ while the workforce is far away from each other, we’ve also never been closer before. All thanks to the accelerated growth in digitisation!
5 Progressive Ideas to Wow Your Employees

Companies now realise that we can no longer rely on traditional workplace practices. Simple HR task such as leave applications or handing out of payslips must be digitised to ensure a seamless process flow from application to approval without the need for added paperwork. Opting to digitise these processes will not only safe cost in the long-run but lots of time, especially when the workforce is still working remotely. Most employees have also begun to realise that maybe, just maybe, that ‘really important’ meeting could have actually been done online or sorted via a few emails. Thus, the time taken to travel to the designated location for the meeting can be better used to complete a work task.

Digitising your workforce is definitely here to stay, in the new normal and beyond. Hence, it is imperative that companies stay relevant by taking a step forward in ensuring their workforce is well connected and work goes on as usual whether work is done remotely or in the office.

2. Keeping them healthy

Of late, there has been much talk on the importance of keeping ones mental and emotional health in good condition, especially with the uncertainty and anxiety brought about by the pandemic. The Malaysia’s Healthiest Workplace by AIA Vitality 2019 survey revealed that 51% of the Malaysian workforce is suffering from at least one dimension of work-related stress while 42% of employees are overweight or obese. On the other hand, the Malaysian Employers Federation have reported Malaysian companies to suffer an estimated loss of RM20.71 billion to man-days loss due to sick leave. These are staggering numbers that can possibly be reduced by ensuring employees are properly educated on the importance of keeping themselves healthy while also receiving professional help if required. Showing that employers care can go a long way in building employees loyalty and improving productivity at work.

Here are some ideas to implement at the workplace:

  • Create a Health Committee that will be in-charge of periodic health events or workshop for the company or department.
  • Consider engaging a Yoga or Zumba instructor and organise a lunch or evening work-out session.
  • Organise group buys for healthy lunch meals.
  • Have reminders sent or posters around the office of motivational quotes.

3. Consider engaging freelancers or gig workers to support full-time staff when it gets too overwhelming

Some companies have been forced to downsize their workforce as the economic impact of the Covid-19 pandemic comes into full-force. That would mean, some departments will likely be short-handed as multiple work task is now the responsibility of another employee that is fortunate enough to have retained his or her job. This can get overwhelming— affecting not just the employees overall wellbeing but also the quality of work produced. The gig economy workforce is a saving grace for many in that arena!

Employees are able to get the required help needed from qualified freelancers, when they need it the most, while companies need not worry about the cost of hiring a full-time employee. Most freelancers already possess the necessary skills needed which reduces the cost and time needed for training. Furthermore, added benefits such as healthcare and insurance need not be provided by the company. From administrative assistance, consultants to skilled workers in various industries, the current landscape is likely to fill the gaps in your workforce.

4. Outsource or automate time-consuming task

Another alternative to help fill gaps in your workforce is through outsourcing or automation. Today, many time-consuming and tedious daily work task such as payroll can be outsourced. This takes ample time that can be better used in executing core business strategies for growth or even ensuring proper training and support is given to your workforce. Furthermore, outsourcing companies typically have the required experience that will ensure your company remain compliant to any new and existing regulations. After all, nobody wants to be caught on the wrong side of the law!

If outsourcing may be a step your company is not yet willing to take, consider the deployment of automation instead. While the internal team will still need to work on the processes, automating can help shorten the time required to complete a task. One such example is timesheets. Gone are the days when timesheets need to be collected or printed. Instead, deploying HR soft wares that can be filled and reported in real-time will most certainly help.

5. Flexibility

The pandemic has forced many companies to re-think the concept of a ‘workplace’ while Malaysian employees have realised they are more comfortable working from home. A survey by KPMG revealed that 69% of Malaysian employees preferred to continue working from home after the movement control order (MCO). 56% of business owners are supportive of this arrangement. Though definitely not for all, employers can consider providing more flexibility as many employees have school-going children or are required to care for ageing parents or relatives.

In a study done by the University of Warwick “human happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings.” The study also found that happiness led to a 12% spike in employee productivity, while unhappy workers were 10% less productive. Caring for your employee’s welfare and that of their families build trust and are often reciprocated with positivity through increased productivity and loyalty.

Source:

Google Employees Will Work From Home Through to Next Summer.

– How Caring About Employees Translate to Business Success.

MEF: 10 million man-days lost to sick leave.

Survey: 69% Of Malaysians Workers, 56% Employers Want Work From Home To Continue