Casual workers, zero-hours employees, agency staff, freelancers, gig workers... all names used to define the ever-growing contingent segment of the labour market.
“This population is going to grow as a proportion of the workforce, and will also become more complicated because of imminent changes to tax legislation,” says Alastair Woods, partner of reward and employment at PwC, referencing IR35’s rollout to the private sector.
“So HR and other departments will need to think about contingent workers as part of their talent strategy, and it needs someone to take a holistic approach.”
Which raises a major question – how is a contingent workforce best managed? Often no single department takes ownership of managing contingent labour. Instead it tends to be managed by ‘a bit of everyone’, with HR and procurement most commonly responsible for different aspects. Contracts, methods of payment and salary scales also vary greatly for this group. Which means there are often inconsistent practices in how this talent is managed across different parts of the organisation.
So should HR be partnering with other parts of the business to effectively manage the contingent
workforce? Or should the responsibility fall to a separate department?
Maureen Sandbach, people director at BaxterStorey, believes that all talent management should sit within the people function and the systems used for employees should be used to manage, track and provide relevant training for all contingent workers.
“The application of the zero-hours contract is certainly an interesting one; there is a requirement to further define the difference between these contracts and casual workers to remove ambiguity and misinterpretation of these roles,” she says.
“Ireland has decided to remove zero-hours contracts. But in the UK this would be harder to effect and manage. People want flexibility and they want to choose roles and jobs that suit them.”
But if HR isn’t managing this transient labour then who? Many would place the responsibility with procurement. Upcoming reforms to IR35 legislation mean the role of contingent workers and their employment status will likely require procurement and HR to initially workmore closely together to enable monitoring of the service provisions and to better understand the business’ use of contract and freelance workers.
Others would point to areas of the business less conventionally associated with managing talent.
Andrew Hulbert, managing director of Pareto Facilities Management, makes a case for the contingent workforce to be overseen by facilities management (FM), arguing that the internal processes that more traditional departments such as HR, procurement or finance operate to are not set up for the agile nature of gig working.
“FM departments have to operate quickly, efficiently and be able to adapt to change as part of their day-to-day duties,” he says.
“FM departments are used to dealing with temporary staff such as cleaning, security and catering. These services often have a high staff turnover and low wages. The FM department understands what it takes to operate with that type of workforce and ensure that they have sufficient back-up plans for when people don’t turn up to work.”
But Katharine Henley, a partner at talent management experts PA Consulting, believes the solution may lie in a blend of departments rather than single ownership: “The capability to recruit gig economy workforces requires active skills-matching and a database of workers. Artificial intelligence enables us to quickly identify a match, location and availability. But to secure talent quickly organisations will need to have a way of communicating projects or roles in a compelling way.
“Innovative sourcing enables access to, and onboarding of, contingent workers in an agile way while plugging skills gaps and enabling more fluid working patterns.”
For Woods, while HR should largely take ownership of this talent, it needs to draw on expertise from around the business.
“Management of gig workers should be within HR because contingent workers are an asset that organisations are going to need to be better at tapping into. With greater choice, and no standard retention tools, organisations will need to be quite savvy at ensuring they are able to attract gig workers,” says Woods.
“HR has the job of attraction, recruitment and motivation, but it should partner with other centres of expertise to support the business.”
Woods explains that PwC has responded by creating a separate function dedicated to contingent labour, which ultimately sits distinct from both HR and procurement.
“Organisations like ours have created new roles such as ‘head of contingent workforce’. This role brings together the costs, risks, governance but also the engagement, performance management and attraction aspects,” he says.
Most crucially the organisation must be set up in such a way that it is capable of managing this talent, says Richard Justenhoven, product development director at Aon Assessment Solutions.
“It all comes down to having the correct agile organisational structure that automatically allows for gig workers to be included in the attraction, hiring and planning strategy of a company,” he says.
“If companies stick to old static models and hierarchies they will fail to get gig workers into their structure on a long-term basis. They need to be nimble and agile to attract gig workers.”
Justenhoven predicts that firms will roll out psychometric profiles or passports for gig workers so they can match individuals quickly to roles and projects.
Whatever the approach, the world and the workforce are changing shape and organisations that don’t have a strategy for engaging contingent labour will lose out, says Henley. “As we get nearer to the cliff edge of the ageing population, and the social movement for work/life integration builds strength, organisations that don’t respond are likely to lose out on critical skills and talent.”
There’s a real opportunity to engage with the gig economy in a way that works for both the organisation and the individual, Henley adds: “This will especially be the case in the search for new and scarce skills – made scarcer for organisations that do not adapt to the everyday realities of today’s workforces.”