Brand First: Running a Contingent Labor Program
If you thought sky-high unemployment would put a halt to rising bill rates for contractors and debilitating skill gaps, think again.
The pandemic will only speed up the changes that were already underway, increasing the demand for more highly skilled workers and underscoring the need to tap new talent sources.
How can contingent workforce programs take the lead in meeting their organization’s current and future contingent talent needs? Fortunately, for most companies, the solution already exists.
Applying investments in employer branding toward the launch of an effective direct-sourcing program for contingent workers, has helped dozens of progressive, global companies improve worker quality and reduce cycle times while lowering bill rates by an average of 10% to 20% versus agency hiring.
Direct Sourcing is when enterprise organizations use their own pools of identified candidates or talent. From there, they might then instruct a third-party partner to manage the process of hiring the worker from that talent pool (partner-source) or fill the role themselves from the talent pool (self-source). Regardless of whether the enterprise is partner- or self-sourcing, typically, a payrolling provider is used to pay the workers.
Given the potential to save millions, it’s no wonder that more and more leaders are engaging providers like Alexander Mann Solutions to create a client-branded direct-sourcing strategy for contingent labor.
Here’s how to unleash the power of employer branding to attract, engage and retain the contingent talent needed for future business success.
Is your company ready for a branded direct-sourcing solution?
“What does the data show?” asks Matthew Rodger, chief commercial officer for Alexander Mann Solutions. “Staffing buyers need an in-depth understanding of their current program to spot opportunities for improvement and build the business case for change.”
In other words, calculating and communicating the “size of the prize” or ROI is the key to garnering internal buy-in and support.
For example, early adopters have experienced 25% reductions in cycle time, once the talent pool is populated with pre-qualified contingents who prefer to work for the company. They have also seen negative attrition fall to less than 4% and reassignments rise when workers contract directly, rather than going through an agency. Redeploying in-house sourced contingent talent also helps eliminate recurring acquisition costs and agency fees.
Don’t underestimate the ability of a strong employer brand power to influence candidate behavior.
“Pay isn’t the only factor contractors consider when looking for a new project,” Rodger adds. “Our experience shows that they are often willing to accept a lower hourly rate when they have affinity for the organization’s brand.”
End users also gain control over intellectual property and the assessment and selection process. Over time, consistently applying a standardized selection process and engaging culturally compatible workers will move the quality needle in the right direction.
Contingents Are an Asset
Like most major change initiatives, the successful journey toward a branded direct-sourcing or hybrid contingent staffing model starts with thinking differently – specifically, about talent.
Contingent workforce programs have traditionally focused on compliance, risk mitigation and process management, explains Nicky Hancock, managing director – Americas Region for Alexander Mann Solutions.
“To start moving forward, leaders need to view contingent talent as an asset, not a process,” Hancock says.
Once you open that first door you are ready to embrace other new strategies, such as skills-based hiring, that has been shown to produce a broader and more diverse talent pool in full-time hiring.
A holistic approach to talent management is also essential.
Talent is talent. Program managers should be asking themselves how they can acquire the skills the business needs, regardless of the worker’s status, Hancock adds.
All too often, HR and procurement are not on the same page. For a launch to be successful, talent acquisition and procurement need to have aligned goals and efforts, especially when it comes to developing the program and marketing the company’s employment brand to contingents, says Chris Benson, SVP of client solutions for Alexander Mann Solutions.
“The organization also needs to educate itself on the myths and facts associated with co-employment. With the appropriate controls in place, use of brand does not move the risk needle,” Benson says.
Today, many companies take a demand-driven, reactive approach to contingent staffing. Smarter organizations are embracing a supply-driven, proactive approach.
The New Customer
Forward-thinking companies are positioning themselves to attract the very best talent today and tomorrow by recognizing the changes in the gig economy and treating contingent candidates like customers.
The reality is that job hunters expect a digital branded experience and there are numerous places to connect with opportunities, not just through agencies. The employee value proposition has existed for many years, now is the time to develop a contractor value proposition advises Mark Jones, EVP for Alexander Mann Solutions.
“You can’t use one message to motivate talent when creating a brand strategy,” notes Sondra Dryer, global head of employer brand and attraction for Alexander Mann Solutions.
Figure out who you are trying to attract, build a persona, then figure out how to find them and engage them when an assignment becomes available, she says. You don’t have to start from scratch or dilute the power of your parent brand, if you “market in the moment” to boost engagement.
What’s the best way to proceed? It’s okay to start small.
Some organizations take a phased approach by self-sourcing contractors with in-demand skills, while others target workers in specific roles in competitive geographies. Still others prefer the “big bang” method. Just make sure that you have a good payroll provider or employer of record to manage the employment of the direct-sourced workers.
“If organizations would like to take more control of their contingent workforce program or reduce their reliance on external providers, then this is a great time to introduce branded direct-sourcing into the mix as part of the change journey,” Jones says.
However, while implementation may take eight to 12 weeks, it could be six to 12 months before the real return on investment is achieved. Without longer-term commitment, the implementation is likely to fail.
Regardless of the implementation strategy, when an organization directly sources 30% to 50% of its contractor workforce, the savings can easily run into the millions or tens of millions over a relatively short period of time.
The question is, why wouldn’t every company at least start thinking about a direct-sourcing solution?
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