Demand-Driven Workforce Management

Kronos', a leader in technology for workforce time tracking, descrbes "Demand-Driven" Workforce Management on their website. This exemplifies a major advantage to utilizing a contingent workforce which is the reduction of labor costs when a workforce can be easily augmented or cut back in conjuction with company and customer needs.


When the workforce is not aligned with demand (as in the above chart), your organization risks being overstaffed against customer volume, production workloads, or the patient census, all of which increase your payroll costs. Worse, it can also lead to understaffing and the inability to meet your customer service and quality standards. Rectifying the situation may require excessive use of overtime and premium labor.
Demand-Driven Workforce Management helps you to perfectly align the workforce with demand. As a result, you can reduce labor costs by minimizing overstaffing and improve quality by avoiding understaffing. Most important, your frontline managers can take a more proactive role in improving business performance. They are better able to manage responsibilities associated with staffing budgets, labor law and policy compliance, and employee satisfaction.

The Demand-Driven Workforce. [Kronos]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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}

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]
  

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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)

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

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]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

Reminder: Why Outsourcing IT to India is Still Hot

In case you needed a refresher on why India is still experiencing rapid IT outsourcing growth here are some statistics (from The Economist Magazine):

* Every year India produces around 2.5M university graduates, including 400,000 engineers and 200,000 IT professionals
* India's National Association of Software and Service Companies (NASSCOM) calculates that the country has 28% of the world's IT offshore talent
* They work while the West sleeps
* They speak (splendid) English
* They can throw huge numbers of people at an IT project
* The cost of an Indian graduate is roughly 12% of that of an American one
* Indian graduates also work more: an average of 2,350 hour a ear compared with 1,900 hours in America and 1,700 in Germany
* A company can buy almost 10 Indian brains for the price of 1 American one

The World is our Oyster. [The Economist, October 7th, 2006]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

The World Economy - 1990, 2005, 2050

The following slides illustrate the history and predictions on the global economy through 2050 [Presented by Spiegel Online with data sourced from Madison, IMF, and Goldman Sachs]. Click on any slide to display in a larger size.







China has risen to the ranks of a global economic power and sets out on a course to surpass other nations in terms of economic might. Russia lags, India starts to develop, even if only gradually.



The World in 2050
The investment bank Goldman Sachs peers into the time machine: China has soared above the United States. Europe, once the motor of industrialization, has fallen markedly behind -- even India is ahead. Resource rich Russia has reestablished itself as a global player.

>

__________________________________________________________________________________

Workforce Vision * workforcevision.blogger.com * By Bill Inman * http://www.billinman.com/ Human Capital -- Contingent Workforce -- Globalism -- Workforce Trends -- Outsourcing

America's Middle Class - Global Loser

"There are essentially three exclusive characteristics whose simultaneous development have served as the foundations of the United States's success up until now -- and they only appear in this particular combination in America. They are not only the country's biggest strengths, but also its greatest weaknesses," as Gabor Steingart writes in his book World War for Wealth: The Global Grab for Power and Prosperity. They are:

• "Nowhere in the world can you find such a high concentration of optimism and daring"
• "The United States is radically global"
• "The United States is the only nation on earth that can do business globally in its own currency"

However, these very strengths have hurt the U.S. workforce by inadvertently causing:

• A "Blur [in] the line between optimism and naivete," that has given rise to "public, private and corporate debt far exceeds any previously known dimensions
• "Globalization [to] strike back...the United States has promoted the worldwide exchange of commodities like no other nation, and the result is that their local industry has begun to be eroded"
• "The dollar [to not] just strengthen the United States; it also makes it vulnerable. The government has pumped its currency into the world economy so vigorously that the dollar can now be brought to the point of collapse by external forces"

And "the rise of Asia has only led to a relative decline of the US national economy. At least so far. But for many blue- and white-collar workers, this decline is already absolute because they have less of everything than they used to. They possess less money, they are shown less respect in society and their chances for climbing up the social ladder have deteriorated dramatically."

America's Middle Class Has Become Globalization's Loser - [Spiegel Online]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

Is Social Capital 'the New Black' for Human Capital?

Contrary to conventional wisdom -- firms can (and quite possibly must) learn when employees leave their company, not just when they hire away an employee from another business. A Wharton School research paper studies the social capital of employees who leave and who can be tapped into when they are future companies...

"The social capital approach would predict that the firm losing an employee would gain access to the new employer's knowledge, while the human capital approach would not," the researchers suggest in their paper."

With my focus being on human capital for over a decade I find this statement on "Social Capital" quite compelling. Maybe, with the advent of web 2.0 social networking, there is a shift from internal knowledge and training to building strategic alliances on the individual level utilizing human capital alumni (who then transfer their knowledge to the social capital realm) to increase the flow of industry and competitive knowledge!

The Social Network Benefit: Losing an Employee Doesn't Have to Mean Losing Knowledge. [Knowledge @ Wharton]

Read the Research Paper behind this article.

“Where the Brains Are…” - The Clustering of U.S. College Graduates

Richard Florida, the author of the book The Rise of the Creative Class, and the Hirst Professor for Public Policy at George Mason University writes:

”Today, a demographic realignment that may prove just as significant [as the pioneers westward, the rural South to Urban North, and city to suburb migration] is under way: the mass relocation of highly skilled, highly educated, and highly paid Americans to a relatively small number of metropolitan regions, and a corresponding exodus of the traditional lower and middle classes from these same places.”

Read more on the “Means Migration”:

Where the Brains Are. [Richard Florida] PDF

Indian Temporary Staffing to Grow Exponentially by 2009

‘Flexi-staffing firms will be big employers by ‘09’

DH News Service Bangalore:

The size of the Indian recruitment market is a huge Rs 4,500 crore and is growing at a healthy 50 per cent. Flexi-staffing (or temporary staffing) market in India is a whopping Rs 1,000 crore, growing at 100 per cent and is fastest growing market in the world. Flexi-staffing companies are all set to be largest employers in India by 2009. These were some of the statistics shared by Kris Lakshmikanth, Secretary- Executive Recruiters Association (ERA), at its national convention, held in the city on Friday. The theme of the convention “War for talent — The Next Decade” threw up some interesting insights .The three major factors in this war for talent is attracting, retaining and motivating talent. In his inaugural address, Ganesh Natarajan, MD, Zensar Technologies, said, “people do not leave an organisation for more money, they leave because they are not taken care of, by the employer.

It is important for us to focus on what motivates people and provide them with an answer to the WIIFM (What’s in it for me?) factor.” He said 90 per cent of the future manpower needs in the IT sector cannot be met, as less than seven per cent of the fresh engineers are not employable for the sector. If the problem of talent shortage is not addressed, India will lose out to China. If India has to achieve an elevated economic status in 2050 which Goldman Sach’s study on BRIC countries prophesies, it can only happen by managing and retaining talent, said V K Vishwanathan, Joint Managing Director, Mico. Meena Ganesh, CEO of Tesco Hindustan Service Centre said the only way to retain an expanding workforce it for the top management to be constantly visible and in touch with its employees on an ongoing basis. Stressing on the importance of a strong organisational culture, Hari Iyer, Culture Officer of Sasken said, “the culture of the company is the key differentiator, it attracts, retains, rejects and ejects its employees.

Original Article Link
http://www.deccanherald.com/deccanherald/jan72006/business181551200616.asp