Can you believe it's almost August? I can't. This summer is flying by! Here are some of the interesting stories/blog posts we've come across this month:
ere.net: Why This Recession Has Been So Tough on Recruiters. While thousands of recruiters have lost their jobs in recent months, not all of these layoffs have been solely because of the economy. Many have been let go for poor performance or attitude, or for other "bad habits" listed in this article.
Fistful of Talent: "Recessionistic Thinking:" We Want to Hire Great, but Nobody is Good Enough .... Based on the concepts discussed in Jack Welch's book, Winning, blogger Josh Letourneau examines the difference between "good" and "great" candidates.
Workforce Management: Sourcing Disappears as Applications Pile Up for Overwhelmed Recruiters. With 15 million unemployed workers competing for a mere 2.5 million open jobs, companies have started cutting back on their sourcing methods to avoid unmanageable piles of resumes and applications. Combined with reductions in HR and recruiting staffs, these practices can threaten diversity in the candidate pool and workforce.
News Break: Salary Hikes in Call Centers Becoming Unsustainable. Rapid salary growth of call center agents in countries such as the Philippines is raising the cost of outsourcing for many companies and making insourcing a more attractive option.
Customer Perspective: SAP program and technology approach to managing contingent workforce
We've spent a lot of time talking to you about the importance of truly understanding the composition of your workforce, and now would like to share with you a real-life example that was featured as the cover story in the July/August issue of Contingent Workforce Strategies.
The article, "Building a Solution," highlights the relationship between Yoh and our customer and partner, SAP. In it, reporter Subadhra Sriram speaks with Mark Steinke, SAP's global vice president of recruitment; The Seamless Workforce's very own Joel Capperella; and Kathy Martin, Yoh's VP of managed services, about the contingent workforce strategy Yoh developed and manages for SAP.
Over a year ago, SAP needed to establish an efficient, strategic talent supply chain and address the complexities of its contingent workforce while gaining visibility and control. In fact, it needed assistance to figure out the size of its contingent workforce and where these workers were located in the organization. The company brought in Yoh to evaluate. Based on the findings, Yoh revamped the existing program to best manage the population, while addressing co-employment issues, talent quality, and the entire expenditure.
By helping them focus on the necessity of evaluation, planning, and executing comprehensive workforce strategies, Yoh equipped SAP to face the challenges in today's global economic realities demanding efficient management of every segment of the workforce.
Today, the company's contingent workforce program extends throughout the Americas, and is going to be rolled out in 46 European countries, followed by Latin America and Asia.
Also, SAP worked with Yoh to develop technology to propel our workforce solutions. The result: Yoh Exchange, technology that facilitates full talent life cycle management through an online portal. SAP has saved approximately $1.4 million in the first year alone of using this technology.
The case study is a good resource for companies struggling or looking to improve management of their contingent workforce. Check it out:
The article, "Building a Solution," highlights the relationship between Yoh and our customer and partner, SAP. In it, reporter Subadhra Sriram speaks with Mark Steinke, SAP's global vice president of recruitment; The Seamless Workforce's very own Joel Capperella; and Kathy Martin, Yoh's VP of managed services, about the contingent workforce strategy Yoh developed and manages for SAP.
Over a year ago, SAP needed to establish an efficient, strategic talent supply chain and address the complexities of its contingent workforce while gaining visibility and control. In fact, it needed assistance to figure out the size of its contingent workforce and where these workers were located in the organization. The company brought in Yoh to evaluate. Based on the findings, Yoh revamped the existing program to best manage the population, while addressing co-employment issues, talent quality, and the entire expenditure.
By helping them focus on the necessity of evaluation, planning, and executing comprehensive workforce strategies, Yoh equipped SAP to face the challenges in today's global economic realities demanding efficient management of every segment of the workforce.
Today, the company's contingent workforce program extends throughout the Americas, and is going to be rolled out in 46 European countries, followed by Latin America and Asia.
Also, SAP worked with Yoh to develop technology to propel our workforce solutions. The result: Yoh Exchange, technology that facilitates full talent life cycle management through an online portal. SAP has saved approximately $1.4 million in the first year alone of using this technology.
The case study is a good resource for companies struggling or looking to improve management of their contingent workforce. Check it out:
The $600 hammer: Who's got an eye on your vendors?
I came across a news article last week concerning the case of a small business owner who plead guilty to making false statements to the U.S. Small Business Administration. Basically, the story boils down to the fact that although the business owner was president, she wasn't actually running the company. Therefore, her company was not really a woman-owned small business, and should not have qualified for the contracts set aside for this categorization of companies.
The article led me to the question, Who's watching out for things like this? You might not be aware that your tax dollars fund the National Procurement Fraud Task Force (NPFTF) that was founded in 2006. The task force was created to protect U.S. taxpayers from procurement fraud (like the $600 hammer we all paid for back in the 1990s, but more on that later).
When you have vendors providing critical services, such as hiring talent, who is responsible for making sure those vendors are properly screening candidates, checking paperwork (I-9s, etc.), and verifying independent contractor status?
It's a great question to ask someone in procurement or human resources at your company. There are two big issues that make it even more important right now.
And now, as I promised, more on the $600 hammer. If you don't remember, this was a scandal that made headlines in the 90s. A government accountant found a charge of more than $400 for a hammer (a number which was later inflated to $600). It resulted in the "Golden Hammer Award," created by then U.S. Vice President Al Gore to reward companies that helped save the government money.
The funny part is that we really didn't pay $600 or even $400 for the hammer. At the time, it was a common practice to distribute total project costs among the different materials or cost elements. This often resulted in big dollar amounts falling into the "hammers" category.
Overall, whether a hammer costs $1 or $600, we all still paid billions for the plane, the building, or whatever it was. But the point is: Did we really know exactly what we were buying? And do you know exactly what service you are getting from your talent supply chain? Hopefully, no one will be naming an award after the $250-an-hour independent contractor you just hired.
The article led me to the question, Who's watching out for things like this? You might not be aware that your tax dollars fund the National Procurement Fraud Task Force (NPFTF) that was founded in 2006. The task force was created to protect U.S. taxpayers from procurement fraud (like the $600 hammer we all paid for back in the 1990s, but more on that later).
When you have vendors providing critical services, such as hiring talent, who is responsible for making sure those vendors are properly screening candidates, checking paperwork (I-9s, etc.), and verifying independent contractor status?
It's a great question to ask someone in procurement or human resources at your company. There are two big issues that make it even more important right now.
- As a result of lay-offs, there are fewer people to keep an eye on vendors. Even good vendors left to their own devices might let things slide if the pressure to book business gets intense enough.
- This economic climate makes it much more likely that vendors will do whatever it takes to just plain survive. They'll let their workers' compensation insurance payments become delinquent, or stop doing background checks and drug screens. And why not? Who's going to know for a few weeks, months, or longer?
And now, as I promised, more on the $600 hammer. If you don't remember, this was a scandal that made headlines in the 90s. A government accountant found a charge of more than $400 for a hammer (a number which was later inflated to $600). It resulted in the "Golden Hammer Award," created by then U.S. Vice President Al Gore to reward companies that helped save the government money.
The funny part is that we really didn't pay $600 or even $400 for the hammer. At the time, it was a common practice to distribute total project costs among the different materials or cost elements. This often resulted in big dollar amounts falling into the "hammers" category.
Overall, whether a hammer costs $1 or $600, we all still paid billions for the plane, the building, or whatever it was. But the point is: Did we really know exactly what we were buying? And do you know exactly what service you are getting from your talent supply chain? Hopefully, no one will be naming an award after the $250-an-hour independent contractor you just hired.
My conversation with Spend Matters' Jason Busch
Had a great conversation today with Jason Busch from Spend Matters regarding the continued evolution of end-to-end talent management. Jason offered a different perspective on the issues at hand. He helped me to understand that it is possible that the slow adoption of comprehensive talent strategies could be partially due to a firm's mistaken belief that they are being adequately served. In other words, a large firm that has technology in place for leveraging selected staffing firms, or even has a managed service provider, has the expectation that:
It's a complex issue that requires continued collaboration between multiple areas of the business, including finance, HR, and operations. As our readers probably know, we are dedicated to being in front of this trend, and delivering strong recommendations for action.
Jason helped us today by uncovering obstacles to reveal the ultimate value in a true talent supply chain. I’m happy to have made the connection, and we’ve agreed to catch up in person next time he’s in the Philly area.
Looking forward to the continued conversation.
- The technology is providing insight, such as improving the use of independent contractors.
- Its selected staffing partners are focused on quality of skill delivered, rather than placement volumes.
- Its managed service provider is feverishly working to flesh out all categorical skill criteria best served with contingent labor.
It's a complex issue that requires continued collaboration between multiple areas of the business, including finance, HR, and operations. As our readers probably know, we are dedicated to being in front of this trend, and delivering strong recommendations for action.
Jason helped us today by uncovering obstacles to reveal the ultimate value in a true talent supply chain. I’m happy to have made the connection, and we’ve agreed to catch up in person next time he’s in the Philly area.
Looking forward to the continued conversation.
The status quo will no longer do
We have, in fact, said repeatedly on The Seamless Workforce that the new workforce paradigms have, in no small part, been accelerated by the current global downturn. A brief summary:
Most recently, we came across this post at SpendMatters.com that derides a partner program recently implemented at Yoh. The program in question seeks to better align talent providers against the objectives of Yoh managed services clients. Modeled after the successful partnerships that are typically found between service providers and technology companies, or engineering firms and their sub-contractors, the program allows smaller providers to capitalize on their geographic and subject matter expertise. The benefit to the client is a more ordered supply network, higher quality of talent, more accountability requirements imposed on suppliers servicing them, and precise control and protection over their employment brand. Equally as important, the program enables clients to trust that as more demand moves into the program (as a result of moving 1099 spend or minimizing the amount of project or statement of work bids), the resulting network of suppliers is incentivized to respond as quickly as possible.
We have taken this approach because we want to increase the level of competition among the supply network invited to serve our client base. Membership in the Yoh program inherently increases focused volume for the partner and mandates specific performance. The partner must maintain performance to remain in the program and is incentivized to fill requirements as quickly as possible within the program quality guidelines.
Why create these motivations? Because too frequently, managed service providers operating in a vendor neutral model have no incentive to order the supply network, nor do they care which supplier fills which requisition. This results in a purely tactical 'body shop' mentality that plaques the client firm with a poor employment brand, questionable quality, and missed opportunities to drive cost out of the process, not to mention the inevitable increase in maverick spend by business personnel seeking to circumvent the program.
The negative response on Spend Matters to such an approach is reflective of the legacy of treating contingent workforce management needs with a purely procurement approach. The status quo--believing that the more broad and wide the requisition is cast, the more procurement is in a position to 'beat vendors down on price'--will no longer do. Workforce strategies are just that: strategic. And in a strategic relationship, 'vendors' are not what is needed. Rather, a well-defined and comprehensive ecosystem ordered and fiscally incented to tackle the complexities of delivering a talent supply chain is the only approach that brings together finance, HR, business and procurement to build sound and durable comprehensive strategic workforce plans.
UPDATE: This topic has sparked some very worthy conversation within the procurement community. Some of this commentary has served to underscore the point we are making here. Consider the line: "Membership in the Yoh program inherently increases focused volume for the partner and mandates specific performance." It is being read by some as if "performance" only refers to volume. This is, perhaps, indicative of those in procurement who limit themselves to considering performance as anything but "volume related discounts." To be clear, the Yoh Partner Program performance mandates have nothing to do with the volume of fills being made by a partner, but by their overall performance against a multi-faceted quality score card. Whether submitting one resource or one hundred resources, they are measured by the quality of the talent supplied.
- Strategic workforce planning must no longer be a matter of addressing the employee base and 'managing' ancillary segments of other talent categories, but instead be oriented toward developing an end-to-end strategic supply chain.
- Achieving true talent supply chain efficiencies requires influence and collaboration across Human Resources, Business Leadership, Finance and Procurement.
- Every talent-related expenditure must be analyzed for proper categorization.
- Risk mitigation must drive the analysis of any and all recruitment and other talent-related services.
- Providers of talent services must be required to drive value and partner with a firm's overriding fiscal and strategic business objectives.
- Employment brands must be factored in to all recruitment and talent service-related decisions.
- Closer analysis of project and contract work can improve compliance, boost cost-efficiencies, and help retain the right talent.
Most recently, we came across this post at SpendMatters.com that derides a partner program recently implemented at Yoh. The program in question seeks to better align talent providers against the objectives of Yoh managed services clients. Modeled after the successful partnerships that are typically found between service providers and technology companies, or engineering firms and their sub-contractors, the program allows smaller providers to capitalize on their geographic and subject matter expertise. The benefit to the client is a more ordered supply network, higher quality of talent, more accountability requirements imposed on suppliers servicing them, and precise control and protection over their employment brand. Equally as important, the program enables clients to trust that as more demand moves into the program (as a result of moving 1099 spend or minimizing the amount of project or statement of work bids), the resulting network of suppliers is incentivized to respond as quickly as possible.
We have taken this approach because we want to increase the level of competition among the supply network invited to serve our client base. Membership in the Yoh program inherently increases focused volume for the partner and mandates specific performance. The partner must maintain performance to remain in the program and is incentivized to fill requirements as quickly as possible within the program quality guidelines.
Why create these motivations? Because too frequently, managed service providers operating in a vendor neutral model have no incentive to order the supply network, nor do they care which supplier fills which requisition. This results in a purely tactical 'body shop' mentality that plaques the client firm with a poor employment brand, questionable quality, and missed opportunities to drive cost out of the process, not to mention the inevitable increase in maverick spend by business personnel seeking to circumvent the program.
The negative response on Spend Matters to such an approach is reflective of the legacy of treating contingent workforce management needs with a purely procurement approach. The status quo--believing that the more broad and wide the requisition is cast, the more procurement is in a position to 'beat vendors down on price'--will no longer do. Workforce strategies are just that: strategic. And in a strategic relationship, 'vendors' are not what is needed. Rather, a well-defined and comprehensive ecosystem ordered and fiscally incented to tackle the complexities of delivering a talent supply chain is the only approach that brings together finance, HR, business and procurement to build sound and durable comprehensive strategic workforce plans.
UPDATE: This topic has sparked some very worthy conversation within the procurement community. Some of this commentary has served to underscore the point we are making here. Consider the line: "Membership in the Yoh program inherently increases focused volume for the partner and mandates specific performance." It is being read by some as if "performance" only refers to volume. This is, perhaps, indicative of those in procurement who limit themselves to considering performance as anything but "volume related discounts." To be clear, the Yoh Partner Program performance mandates have nothing to do with the volume of fills being made by a partner, but by their overall performance against a multi-faceted quality score card. Whether submitting one resource or one hundred resources, they are measured by the quality of the talent supplied.
Measure what you manage: the necessity of benchmarking
The recent economic downturn has refocused corporate leaders on cost containment through optimizing efficiencies across all corporate functions. We now see shared services popping up in human resources, finance, customer service, and many other departments to address the need to reduce costs across the enterprise.
Recruiting is arguably one of the most important functions within a company. However, as we meet with customers to discuss their talent supply chain, I am continuously surprised to learn that most companies have no idea what they are spending to acquire talent -- which is scary. Considering the cost of acquiring talent usually falls among the top five corporate expenditures, monitoring and containing this substantial line item is only logical.
To soundly manage your organization, it is essential to measure and benchmark these costs. A good cost-for-hire assessment should examine internal, external, and direct costs, including:
Recruiting is arguably one of the most important functions within a company. However, as we meet with customers to discuss their talent supply chain, I am continuously surprised to learn that most companies have no idea what they are spending to acquire talent -- which is scary. Considering the cost of acquiring talent usually falls among the top five corporate expenditures, monitoring and containing this substantial line item is only logical.
To soundly manage your organization, it is essential to measure and benchmark these costs. A good cost-for-hire assessment should examine internal, external, and direct costs, including:
- Internal costs: recruiter salaries and benefits, staff travel, lodging/entertainment, supplies, and administration.
- External costs: travel, lodging/entertainment, and salaries for recruiters or staff involved in the hiring process.
- Company visit expenses: candidate travel, lodging/meals, interview workday expenses, etc.
- Direct fees: advertising (print/Web), job fairs, agency/executive search fees, cash awards for employee referrals, and college recruiting.
- Supplemental data: average annual salary of new hires, recruit workload, submittal to interview and interview to hire ration, acceptance rate, time-to-fill, turnover, relocation costs, and average sign-on bonuses.
RPO: Time to get on the bandwagon
As we begin to see some areas of the economy slowly begin to bounce back, including hiring, companies are faced with a new challenge: How to recruit high-impact talent with a smaller recruiting staff that might have once been in place. So, what should you do if you're facing these circumstances?
A few years ago, I partnered with a pharmaceutical sales company that had gone through some layoffs and needed to rehire a portion of their workforce because of a new drug approval. This company made the strategic decision to hire a part-time workforce (versus a full-time staff) to cut back on compensation and benefits.
Together, we (an established RPO organization) and the company created a customized recruitment strategy tailored toward the population most interested in part-time opportunities in this field. The program was a major success, and allowed the organization to maintain profitability during a challenging time.
In reality, many companies actually have this same opportunity, but simply aren't aware of it. Or, they think it might be difficult to "sell" internally. However, this isn't the case. RPO engagements can vary in size and scope, and utilize various strategies depending on a company's goals. Companies should define their needs and goals, and challenge RPO providers to create a solution tailored to those specific items.
Doing so will help meet your immediate staffing needs, and creates the potential for the creation of a long term partnership. Clearly, RPO is the way to go. Companies, get moving!
A few years ago, I partnered with a pharmaceutical sales company that had gone through some layoffs and needed to rehire a portion of their workforce because of a new drug approval. This company made the strategic decision to hire a part-time workforce (versus a full-time staff) to cut back on compensation and benefits.
Together, we (an established RPO organization) and the company created a customized recruitment strategy tailored toward the population most interested in part-time opportunities in this field. The program was a major success, and allowed the organization to maintain profitability during a challenging time.
In reality, many companies actually have this same opportunity, but simply aren't aware of it. Or, they think it might be difficult to "sell" internally. However, this isn't the case. RPO engagements can vary in size and scope, and utilize various strategies depending on a company's goals. Companies should define their needs and goals, and challenge RPO providers to create a solution tailored to those specific items.
Doing so will help meet your immediate staffing needs, and creates the potential for the creation of a long term partnership. Clearly, RPO is the way to go. Companies, get moving!
Finding greater value in your workforce
The word "value" is no longer just a buzz word to get your attention. In this economy, it's critical to business. One area that everyone is looking at right now is the workforce; but for my money, most companies are not looking at it in the right way. Simply reducing the workforce won't do it. Here are some questions to get you thinking about how to create additional value in your workforce.
Focus. What does your company really do?How can you retain a skilled core staff to make your product, services your customers, or take care of your employees? What workforce solutions are available to perform non-core functions? For example, Syngenta turned to RPO.
Compliance. Are your processes based on "the way it's always been done," or are they consistent, compliant and reproducible? We recently heard that the Federal government has increased their audits of I-9 compliance this year. So even if you get the right talent into your organization, if you don't do it in the right way, a hefty IRS fine could really impact your bottom line. Just ask FedEx.
Agility. How agile will your company need to be in the future? If you are like most, this economy has changed your answer to that question. This goes back to #1 above; once you find your focus, how can you change the make-up of your workforce to ensure you can respond when needed?
Visibility. How well can you see all of the talent coming into your organization? The operational word here is "all." We've written a lot about the risks of using independent contractors, but there's more than one way to hide headcount. The first step is finding all of them.
There are a lot of questions to consider. Where are the answers? A good rule of thumb is if you start by asking the right questions, you'll know where to start looking for the answers.
If you can't find the answer right away, don't give up. And don't be afraid to be open and honest with yourselves.
For example, we recently guided a customer through a Value Assessment to help identify the answers to the questions above. During our evaluation of one of the company's processes (which, by the way, was one that includes a significant amount of risk), we didn't get to the real answer until the third time we asked the question. And then, the answer was: "We don't really do that. Everyone still thinks we do, but that was cut out of the budget."
Hopefully that response doesn't sound familiar to you. But if it does, now's the time to evaluate your workforce.
Focus. What does your company really do?How can you retain a skilled core staff to make your product, services your customers, or take care of your employees? What workforce solutions are available to perform non-core functions? For example, Syngenta turned to RPO.
Compliance. Are your processes based on "the way it's always been done," or are they consistent, compliant and reproducible? We recently heard that the Federal government has increased their audits of I-9 compliance this year. So even if you get the right talent into your organization, if you don't do it in the right way, a hefty IRS fine could really impact your bottom line. Just ask FedEx.
Agility. How agile will your company need to be in the future? If you are like most, this economy has changed your answer to that question. This goes back to #1 above; once you find your focus, how can you change the make-up of your workforce to ensure you can respond when needed?
Visibility. How well can you see all of the talent coming into your organization? The operational word here is "all." We've written a lot about the risks of using independent contractors, but there's more than one way to hide headcount. The first step is finding all of them.
There are a lot of questions to consider. Where are the answers? A good rule of thumb is if you start by asking the right questions, you'll know where to start looking for the answers.
If you can't find the answer right away, don't give up. And don't be afraid to be open and honest with yourselves.
For example, we recently guided a customer through a Value Assessment to help identify the answers to the questions above. During our evaluation of one of the company's processes (which, by the way, was one that includes a significant amount of risk), we didn't get to the real answer until the third time we asked the question. And then, the answer was: "We don't really do that. Everyone still thinks we do, but that was cut out of the budget."
Hopefully that response doesn't sound familiar to you. But if it does, now's the time to evaluate your workforce.
Not surprisingly, unemployment still on the rise
Last week, the Bureau of Labor Statistics reported that the American economy lost 467,000 jobs in June, bringing the unemployment rate up to 9.5 percent. While many were stunned to see yet another month of negative numbers amid talks of an imminent economic rebound, I'm not really that surprised.
Employment is a lagging indicator of economic success. It can take several months for companies to become stable enough to slow the pace of layoffs and resume hiring. Therefore, it's not unusual, coming out of a recession, to continue to see negative employment numbers, despite positive signs elsewhere.
What execs really need to be asking themselves now, is: At what point does reducing headcount begin to negatively impact productivity, leading to loss of market share and decreasing your organization's ability to operate efficiently?
For some companies, this turning point comes so quickly, that layoffs are not the best workforce management strategy, particularly in a poor economy. The last thing you want to do is dig your organization into a hole, so that it's unable to emerge when the economy does finally turn itself around.
Employment is a lagging indicator of economic success. It can take several months for companies to become stable enough to slow the pace of layoffs and resume hiring. Therefore, it's not unusual, coming out of a recession, to continue to see negative employment numbers, despite positive signs elsewhere.
What execs really need to be asking themselves now, is: At what point does reducing headcount begin to negatively impact productivity, leading to loss of market share and decreasing your organization's ability to operate efficiently?
For some companies, this turning point comes so quickly, that layoffs are not the best workforce management strategy, particularly in a poor economy. The last thing you want to do is dig your organization into a hole, so that it's unable to emerge when the economy does finally turn itself around.
Best practices for evaluating workforce composition
We've seen plenty of suggestions on what to do with a firm's full time or contingent employees, but not many on how to best evaluate the entire composition of the workforce.
Here are some ideas to help start a conversation around the complete workforce and improved talent inventory control.
Here are some ideas to help start a conversation around the complete workforce and improved talent inventory control.
- Segmentation: Provide adequate information to employees who are not members of your full-time staff. This includes detailing specific skill set requirements and standard use of every area of operations. It's not enough to simply categorize these workers as full time or temporary employees. Rather, create categories such as professional contingent, administrative contingent, independent contractor, technical consultants, business consultants and deliverable associated (the talent necessary to complete projects or statements of work).
- Governing Policies: Define the criteria for acquiring non-employees. The policies and procedures put in place should not prohibit the business' need to place talent quickly. Instead, they should manage all sources of talent, and connect them to very specific measurable performance expectations.
- Conversion of Deliverables to Skill Requirements: Evaluate all projects and statements of work to determine if they are being abused as an end to run around headcount. This is a frequent tactic used to connect the needed skill set against the deliverables that are understood as necessary for the current fiscal year (or any other short term objective). Typically, it's possible to convert a small percentage of skills currently being used to complete projects or statements of work into standard skill requirements. By doing this, there is an opportunity to decrease the pay rate for this labor, and thereby the overall cost of having it as part of the workforce.
- Audit Independent Contractors: Identify company-wide use of employees classified as independent contractors. It's not unusual to discover that approximately 25 percent of independent contractor use violates state compliance regulations. And, in an economy where state revenues are shrinking, greater scrutiny by the states should be expected. Prepare your company by performing your own independent contractor audit.
- Analysis of Buying Autonomy: Segmentation of the workforce enables a more discrete analysis of how much buying autonomy exists across varying lines of business and tactical areas of operation. Look to uncover unnecessary premiums being paid for talent, and uncover potentially inefficient or non-existent cost performance processes.
- Examine the Supply Chain: Review and analyze every supplier and determine how they are performing. Identify the cost impact their services, if unmanaged, have on overall labor expenses. Completing these examinations frequently will uncover an inability to identify every participating vendor in the supply chain.
- Uncover and Identify Rogue Spending: While this may appear to overlap with the examination of the supply chain and the analysis of buying autonomy, the objective here is to gain an intimate understanding of expenses currently "off the radar," and subsequently, not measured for performance.
Workforce reduction: not necessarily the best option for your business
Last week, CareerBuilder and USA Today released their Q3 2009 Job Forecast. It surveyed more than 2,600 hiring managers and HR professionals, and found that most respondents -- 68 percent -- expect staff levels to remain the same in the third quarter. Only 15 percent expect to increase their full time, permanent headcount.
The survey also asked employers to identify the cost containment measures they have employed in the past six months to help them survive during the challenging economy.
Typically, workforce reduction is seen as the most immediate way to achieve cost savings, but a "bare bones" strategy risks project delays, missed deadlines, and lost opportunities. In other words, this could result in a significant negative impact to the business.
Rarely do we see productivity as a trade-off for the cost savings associated with initially reducing headcount. Given the reductions that have occurred in almost every sector, control over a firm's talent inventory is even more critical.
The ongoing workforce evolution is driven by the need to invest in HR in a way that does not only leverage contingent employees, but recognizes the need of the entire workforce to produce, sell, and deliver goods and services. To maintain productivity and costs with minimal staff levels, HR must compose a workforce that can easily adapt to changing market conditions.
The enhancement of the full time workforce must be more than simply plugging in temporaries where they are needed. Rather, augmentation must be a strategy for driving operational efficiency with the right quality personnel in a fiscally responsible manner. This requires a deeper analysis into what functions are related to this talent.
A firm would be remiss to enforce a workforce reduction without evaluating the entire makeup of labor. A complete evaluation will help ensure productivity when staff levels are low, and prepare for a more cost effective and efficient talent inventory when market conditions change.
The survey also asked employers to identify the cost containment measures they have employed in the past six months to help them survive during the challenging economy.
Typically, workforce reduction is seen as the most immediate way to achieve cost savings, but a "bare bones" strategy risks project delays, missed deadlines, and lost opportunities. In other words, this could result in a significant negative impact to the business.
Rarely do we see productivity as a trade-off for the cost savings associated with initially reducing headcount. Given the reductions that have occurred in almost every sector, control over a firm's talent inventory is even more critical.
The ongoing workforce evolution is driven by the need to invest in HR in a way that does not only leverage contingent employees, but recognizes the need of the entire workforce to produce, sell, and deliver goods and services. To maintain productivity and costs with minimal staff levels, HR must compose a workforce that can easily adapt to changing market conditions.
The enhancement of the full time workforce must be more than simply plugging in temporaries where they are needed. Rather, augmentation must be a strategy for driving operational efficiency with the right quality personnel in a fiscally responsible manner. This requires a deeper analysis into what functions are related to this talent.
A firm would be remiss to enforce a workforce reduction without evaluating the entire makeup of labor. A complete evaluation will help ensure productivity when staff levels are low, and prepare for a more cost effective and efficient talent inventory when market conditions change.
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