The Four Segments of the Contingent Workforce

Manpower's whitepaper "The Total Workforce" outlines their 'Four Segments of the Contingent Workforce'. The following diagram outlines these four areas and provides a useful reference to often often used terms "Temporary Employee", "Contractor", "Outsourced Employee", and "Consultant".

Click on the Image Above to View a Larger Size

The Total Workforce. [Manpower - PDF]

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The Talent Management Continuum as Segmented by Taleo

Click on the above image for a larger view

Source: Taleo

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Managing Your Contingent Workforce

Contingent Workforce Strategies has published group of articles on managing external contractor and temporary worker labor forces entitled "Managing Your Contingent Workforce." The articles provide a solid knowledge base for professionals who seek to gain cost, administrative, and risk control over their contingent workers.

Managing Your Contingent Workforce. [Contingent Workforce Strategies] {PDF hosted by ContingentWorkforce.org}

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Blue Collar Temporary Workforce To Continue Growing In 2007 Despite Moderating Economic Growth

Staffing Industry Analysts forecasts Temporary Staffing for Industrial Workers To Expand A Solid 5% Next Year After 7% Growth In 2006

The forecast states "the growth of temporary industrial jobs will be approximately the same as the overall growth rate of U.S. temporary workers. Temporary industrial jobs, which have been growing rapidly to keep pace with demand from largely cyclical industries, comprise 4% of the total industrial workforce. In 1980, less than 1% of workers in industrial occupations were employed on a temporary basis."

Staffing Industry Analysts CEO Ron Mester said, "Temporary industrial job growth is slowing somewhat as the economy moderates, but it will continue to grow solidly in 2006 and 2007. For job seekers, the opportunities are with every kind of employer – from small business to the Fortune 50. For employers, temporary workers will play an increasingly important role in remaining competitive in a global marketplace where employment needs change quickly."

Facts from the Forecast:

* The South and the Midwest are the geographic regions with the highest proportion of production and transportation jobs.
* The Sunbelt States have the highest proportion of employment in construction.
* Building and grounds-keeping employment is relatively strong in vacation and retirement metropolitan areas.
* Installation and repair employment is highest in the South. * Overall, industrial temporary staffing is expected to grow $2 billion to $28 billion in 2006.
* Industrial temporary staffing is the largest segment of the temporary staffing industry, employing roughly half of all temporary workers.

Blue Collar Temporary Workforce to Continue Growing in 2007 Despite Moderating Economic Growth. [Staffing Industry Analysts]

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Professional Employer Organizations (PEOs) will grow 8% in 2007

An industry that seemed to have problems because of State regulations and co-employment litigation has continued to persevere and gain momentum on the backs of the industries largest players.

ADP grew revenue nearly 27% between 2004 and 2005, the fastest rate in the industry. Large PEOs are gaining competitive advantage because of:

• Economies of Scale


• Well diversified employee skills pools which diffuses workers' compensation risk


• Technology advances leading to increased efficiency and automation


• Up-selling payroll service only clients
  
  The top 5 PEOs (by revenue) are:
  


• ADP TotalSource of Miami, FL. $6.97 billion. The company had 5,700 clients and 139,000 worksite employees. Gross PEO revenue grew 26.9% from 2004 to 2005.


• Administaff Inc. of Kingwood, TX. $6.63 billion. The company has 5,000 clients and 94,000 worksite employees. Gross PEO revenue grew 23.4% from 2004 to 2005.


• Gevity HR Inc. of Bradenton, FL. $4.77 billion. The company had 8,200 clients and 136,600 worksite employees. Gross PEO revenue grew 10.8% from 2004 to 2005.


• Paychex Business Solutions of Rochester, N.Y. $2.48 billion. The company had 3,300 clients and 59,000 worksite employees. Gross PEO revenue grew 8.6% from 2004 to 2005.


• TriNet Group Inc. of San Leandro, CA. $1.67 billion. The company had 1,100 clients and 16,600 worksite employees. Gross PEO revenue grew 20.6% from 2004 to 2005.
  Source Information:
  
  Staffing Industry Analysts Ranks Top 25 PEOs. [Staffing Industry Analysts]
  

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New Ways of Thinking in the War for Talent

A McKinsey & Company study (2001) culminated in the book The War for Talent, an insightful look into the deeply held belief, in 'high-performing' companies, that the key to competitive advantage comes from superior talent and managing that talent effectively. The following chart, from The War for Talent, takes a look at the the new and old ways of thinking about human capital:

It's Time to Retire Retirement

"Long-standing human resources practices invest heavily in youth and push out older workers. This must change--and public policy, too--or companies will find themselves running off a demographic cliff as baby boomers age" (It's Time to Retire Retirement, Harvard Business Review).

This HBR article highlights the need for all types of companies to create a plan to battle the coming talent shortage. 60% of companies do not account for workforce aging in their business plans! Working with 'older' workers is a main tactic to beating this threat to competitiveness. Creating a culture that honors experience, offering flexible work and introducing flexible retirement will be critical to companies that want to remain competitive in their field.

It's Time to Retire Retirement. [Harvard Business Review - Ken Dychtwald, Tamara Erickson, Bob Morision]

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Innovative Executive Onboarding Strategies

Onboarding Senior Executives into your organization in a professional and positive manner is critical to getting them off to a fast and productive start. Here are some tips from Mary Herrman of the Capital H Group on this process:

1) ensure that your organization's values align with those of the incoming executive and vice versa.
2) giving him access to the people, personalities and politics of your organization before the first day
3) execute a "get to know you" communications plan
4) work with a coach who is familiar and experienced with your organization
5) entire senior management team should take accountability for the success of your new executive

Read the details behind these tips in the following article:

Innovative Tactics For Onboarding Top Talent. [Mary Herrman - Capital H Group]

Additional Resources:

The Onboarding and Offboarding Process (click on image for larger size)

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Workplace Statistics from the "Perfect Labor Storm"

"The Perfect Labor Storm" website provides information and statistics for workforce trends, demographics, and forecats about the projected U.S. labor shortage. They offer 642 facts about this shortage. Here are a few of these facts and a link to the entire list:

Fact #5
The 50 and older population from 2000-2050 will grow at a rate 68 times faster than the rate of growth for the total population
Source: Beyond Workforce 2020, Hudson Institute

Fact #6
One-fifth of this country's large, established companies will be losing 40 percent or more of their top- level talent in the next five years.
Source: Development Dimensions International

Fact #27
45 percent of workers want to change jobs at least every three to five years, up from 26 percent in 1999.

Fact #41
By 2010 we will have 167,754,000 skilled jobs to fill in the United States alone.

Fact #42
By 2010 we will have only 157,721,000 people in the workforce to fill those jobs.

Fact #103
The cost of replacing a senior executive averages two to five times his or her annual salary.
Source: Training and Development, February 2004

Fact #166
For dual career couples with kids under 18, the combined work hours grew from 81 a week in 1977 to 91 in 2002. Source: Families and Work Institute

The Perfect Labor Storm Facts. [perfectlaborstorm.com]

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2006 Workforce Trends

The Herman Group, workforce futurists based in North Carolina, published their 2006 workforce trends list. These trends include:

1. Intensifying competition for qualified workers.
2. Gradually increasing attention to employee retention.
3. Increasing investment in older workers.
4. Shift in retirement plans to lifetime lifestyle funding.
5. Continued off-shoring of some work, coupled with return of other work.
6. Larger investment in corporate training.
7. Growth in telecommuting.
8. Expansion of staffing industry.
9. Heightened flexibility in work arrangements.
10. Employer dissatisfaction with product of schools.

Read details at:

2006 Workforce Trends by the Herman Group. [The Herman Group - Anita Cambell]

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What is the Contingent Workforce?

Have you heard the term Contingent Workforce but are not quite sure what it means? Here is a definition:

Contingent Workforce -- The group of consultants, contractors, temps, and other project based workers that a company employs. Usually these contractors are employed through staffing firms, project-based consulting companies, or through outsourcing.

Get a crash course on the Contingent Workforce by reading the information on the following webpages:

http://www.galtglobalreview.com/careers/contingent_workforce.html

http://www.humancapitalinstitute.org/hci/tracks_contingent_workforce_management

http://www.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=48981

http://en.wikipedia.org/wiki/Contingent_Workforce

http://en.wikipedia.org/wiki/Contingent_Workforce_Outsourcing

http://www.quepublishing.com/articles/article.asp?p=437082&seqNum=8

http://physorg.tradepub.com/c/pubRD.mpl?sr=ct&_t=ct:Hr&pc=cws

http://www.computerworld.com/careertopics/careers/recruiting/story/0,10801,78709,00.html

http://s-ox.com/news/detail.cfm?articleID=1284

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Higher Wages + Lower Productivity = Inflation? (U.S.)

The U.S. Labor Department reported:

• July - September U.S. labor costs rose 3.8%
• Wages and labor costs are up 5.3% over the last year, which is the highest increase since 1982
• Unemployment claims up to highest level in three months. They slowing economy may be pushing companies to lay off workers

Martin Crustsinger, AP Economics writer states, "The concern is that with productivity gains slowing over the past year and the cost of labor rising, these trends could make the Fed's job of keeping inflation under control more difficult."

Productivity slows to a standstill. [U.S. Labor Department, AP - Martin Crutsinger]

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Cost of Turnover

According to the Spherion Emerging Workforce Study the cost to replace an employee (U.S.) is $59,692. 40% of workers plan to leave their current jobs in the next year.

To see what this is costing your organization and the value of developing a retention program view Spherion's Turnover Cost Calculator at the following link.

Turnover Cost Calculator. [Spherion]

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