In the first of a series of Expert Insights, we asked Jeremy Tipper to share his views on Total Talent and how we assess the competencies of non-permanent employees.
A growing proportion of the workforce is choosing to work on a more flexible basis. Whether it be contracting, freelance or gig working these resources are fast becoming important assets to businesses that are starting to appreciate that to get the best skills we need to look beyond permanent employees.
The result of this demographic shift is a growing recognition by many organisations of the value of a ‘Total Talent’ strategy. According to research from AMS, 24% of companies have an approach to Total Talent Acquisition (TTA) in place and 54% of companies are seriously considering TTA over the next two years.
Given the growth of Total Talent, isn’t it time that we start to apply the same degree of rigour to the screening and assessment of contractors as we do our permanent hires?
The value of contingent workers
Think of large-scale programmes you’ve heard about in both the public and private sectors that have gone over time, over budget and even completely collapsed: The IT meltdown at TSB that resulted in enormous losses, or ongoing technology issues on the government’s Universal Credit project are recent examples. These projects are often largely staffed by contractors or consultancies. How well were the competencies, motivations and behaviours of these non-permanent workers assessed?
In such cases, it’s apparent that organisations have neglected to put the same rigour into assessing the capability, behaviours, and cultural fit of contractors as permanent employees – despite that fact that their contribution is equally commercially valuable and impactful.
It’s not as simple as procuring people
Why don’t we apply the same degree of rigour to assessing non-permanent employees? Firstly, there is a traditionally held view that if you hire a contractor and they don’t deliver, you can part company easily as they aren’t on the payroll and have fewer rights. However, the landscape has changed and there is no such thing as disposable people assets. Recent cases have highlighted the rights of self-employed workers (think of Uber and Pimlico Plumbers) and more employee protection is being afforded to those on zero hours contracts.
Secondly, the way we buy-in contingent talent is often very different to the way we recruit permanent employees with the recruitment of contractors often being managed by a company’s procurement function, in the same way you might buy office furniture and stationery! This issue is often accentuated by an information gap, given most organisations having one technology platform to manage permanent hires and a separate ‘vendor management system’ managing the supply of contractors. However, this is thankfully starting to change, with the advent of unified technology platforms that can support all pre-and post-hiring assessment regardless of contract type.
We need to change our corporate mindset
Energy and effort have, until now, been focused on the quality of permanent hires and internal mobility, while non-permanent hires and contractors are thought of as a commoditised purchase. Whether it be through an agency, managed service provider or supply chain, the focus has too often been on cost not output.
However, people are a major component of most companies cost base and CEOs and CFOs are starting to recognise the value of a total talent strategy and the commercial benefits it can bring. For example, if your entire workforce (perm plus contractors and Statement Of Work (SOW)) is 60% of your cost base, optimising this to 57% by blending permanent and flexible resource more effectively is a gigantic saving compared to the small numbers we are talking about in terms of shaving a bit off cost of hiring – which we’ve been trying to do for the last 20+ years.
For CFOs and HRDs the big question is how to get the resource mix right? How do we reduce fixed costs and deploy non-employed resource effectively with the overall goal of reducing resources because they are better allocated? How do we bring the right skills into the organisation at the right time to achieve business objectives? If you hire in skills such as agility, resilience, emotional intelligence and flexibility you can recycle that talent in your organisation and become nimbler and ultimately, more successful.
HR needs to take ownership
There is a role for procurement, but it’s fundamental that Total Talent Acquisition is owned by TA. Developments in technology are supporting the coming together of all people data in an organisation regardless of the relationship with the business and enabling TA to view the workforce as a whole rather than a collection of individuals.
Recently I’ve started to see more thoughtful and forward-thinking organisations view employees on and off payroll more coherently. Nationwide hires employees of all contract types according to drivers and motivations. Lloyds bank also has a thoughtful approach to incorporating rigour into hiring contractors.
In order to be successful, the combined talent and capability of both permanent and non-permanent employees need to operate effectively together. This is why HR and TA teams need to play a more significant role in ensuring that all human resources bring not just technical competencies, but the right behaviours, values, and alignment with corporate objectives and culture.
Next month we’ll be talking to Dr Kiran Chitta about unlocking agility. Sign up to our email updates to receive the next in the series of our Expert Insights