The human capital marketplace is in a transitional state and shows no signs of settling in the near future. The changing worker composition and shift in worker priorities and demands have made it a challenge to anticipate trends and effectively acquire labor. Together these realities represent a shift from traditional work arrangements and blur the line between direct hires, contingent workers and service providers.
Organizations are facing hiring challenges related to two major trends that are taking center stage:
Changing Worker Landscape. Baby boomers are quickly approaching retirement age, and the generations that follow cannot accommodate this loss of workers. During the next two presidential terms, the number of new workers entering the labor market will grow by 4.3 percent, while the number of retirees will grow more than five times that figure, by approximately 23.9 percent, according to estimates attributed to the Social Security trustees.
Shifting Employee Needs. The next generations of workers, while already a much thinner pool of candidates, are characterized very differently than loyal, hard-working baby boomers. According to a variety of reports, both Generation X and Generation Y workers have a greater focus on their personal lives, prefer flexible work arrangements, have less employer loyalty and want the ability to go part-time once they have children.
While deploying siloed solutions helps procurement and human resources (HR) departments manage their own respective workforces, it does not allow a company to view its entire workforce to evaluate it as a whole. Only a unified technology platform affords companies a holistic view necessary to understand how best to utilize talent. To be successful, companies need to take a closer look at their worker composition and determine the mix of labor types that is best for their organization.
A unified technology platform allows for several strategies to cope with the shrinking and increasingly transient workforce we are faced with today:
Alumni Talent Pool. A holistic approach allows organizations to implement an alumni talent pool and tie it to the requisitioning process. This will allow companies to selectively tap into the best and brightest alumni for all types of positions. Re-sourcing retirees as contingent workers or consultants will allow them to work reduced hours while still serving as mentors for the next generation of workers. Likewise, companies can offer full-time positions to the best-performing contingent workers and contractors.
Non-traditional Positions. A unified solution can offer companies the flexibility needed to acquire and manage workers that have very unique demands. To meet their needs while still meeting their own business goals, companies may need to offer young workers contingent, contract or flex-time positions more frequently than full-time positions. These non-traditional positions offer workers the experience they demand while still allowing for the flexibility that full-time positions lack.
Implementing these strategies through a unified technology platform can produce several benefits for companies, with both quantitative and qualitative results:
Improved Talent Pool. Most companies currently have no systematic way of contacting alumni, including retirees and interns, after they have left an organization or completed their planned duration. By capturing data on these workers during the "offboarding" process through the platform, companies can selectively fill their contingent talent pipeline with retirees who still want to work, young workers who prefer more flexible positions and high-achieving contingent workers and contractors. In doing so, a company can dramatically increase its pool of workers, thus improving their worker quality.
Greater User Adoption. Operating from a unified platform gives hiring managers a single starting point from which to perform all job functions, from onboarding to offboarding. In addition to easing the process in general, this can reduce their headache in learning multiple systems and increase the likelihood that managers will use a single platform to its full potential.
Cost Savings and Risk Reduction. References put the cost of a "mis-hire" between five and 15 times a worker's salary, a major contributor being the expenses associated with on-boarding. One estimate, by Bob Willard in "The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line," cites the cost at just under $40,000 to onboard one worker. Re-sourcing previous employees eliminates much of this risk, as both the individual and the company has already had a chance to perform due diligence on the other. A company would not re-hire a poorly-performing employee; likewise, workers will not accept positions with a company that does not meet their needs.
Baby boomers are retiring and newer generations of workers cannot replace them, physically or knowledge-wise. The time is ripe for companies to examine whether alumni such as retirees and interns could play a large role on the contingent side of a workforce. By taking full advantage of these known talent resources, companies can save time, costs and energy while achieving a much higher success rate with new hires. While no one can deny the pool of full-time talent — including current and potential workers — is shrinking significantly, research shows that by deploying a unified platform, companies can maximize their workforce and cost savings.