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Managers + temporary workforce: Avoid these costly decisions!

Kay Vittee

Global businesses are increasing their reliance on temporary labour (nearly 26% of the average workforce is employed on a short-term basis) and this has quickly turned into a trending long-term practice. With this change in labour practice, there is also a need for change in management processes.

Globally, about 41% of businesses believe they face increased risk related to the management of contingent labour. This is partly because businesses use contract employees but don't adjust the methods used by their HR departments in management processes.

An example of where contingent labour requires unique management is in terms of contract time spans, i.e. the management of contingent labour through an internal HR department, which is familiar with dealing with permanent staff. This can easily present an obstacle in keeping track of when contracts have come to an end and can lead to businesses incurring unnecessary costs to terminate the employment of a contractual employee who has continued working past the date stipulated in his or her contract.

It stands to reason that businesses adopting the contingent labour trend need to be aware of the solutions available to them not only to meet their general business and strategic objectives, cut costs, improve governance and promote management, but also to eliminate legal and financial risk.

It pays to adopt an MSP solution

Referring to the 2014 Buyers Survey: Best (and Worst) Decisions Made by Contingent Workforce Managers, conducted by the Staffing Industry Analysts (SIA), the most common 'best decision' among buyers, by a large margin, was adopting a managed service provider (MSP) solution.

Buyers said this service:

  • Reduced costs,
  • Was easy to use and completely transparent, and
  • Offered the buyer control and better management of their contingent workforce.

The dominance of the MSP and/or its supporting vendor management system (VMS) answer in the survey was notable because the question was open ended, with no potential answer suggested or prompted.

Interestingly when the survey asked buyers what their worst decision was, their response was that "allowing local branches or managers to exercise too much control over hiring", was by far the worst decision followed by "overspending" and "unclear or insufficient management of contingent workforce".

These respondents, who experienced challenges in contingent labour management, found a solution in choosing to place some of this responsibility on a third party.

Particularly useful for large companies with many suppliers, the emergence of staffing MSPs has recently gained momentum in South Africa. MSPs manage all the staffing suppliers used by a particular business, allowing for a streamlined process and through the supporting VMS also allow the business to:

  • Track its total spend,
  • Control agreed rates,
  • Make payments, and
  • Manage the measurement of the level to which staffing vendors adhere to the client organisation's standards through a service level agreement (SLA).

In the management of the contractual employees, whether insourced or outsourced, businesses need to take the necessary steps to drive all third-party labour categories to a single on-boarding solution to help ensure policy and regulatory compliance.

Kay Vittee is the CEO of Quest Staffing Solutions and previously she worked at Absa. Kay is also a superb business leader who inspires her organisation to live the essence of superior customer service. Clients trust her judgement and will continue to include her in driving quality solutions for their businesses.