This is the second in a six-part series looking at key aspects of an effective workforce.
Historically, “contingent labor” in the business world has been a population of independent workers hired to fill temporary or project-specific roles. This was the go-to population to meet needs like seasonal demands, temporary fill-ins for employees on extended leave, or people to work on a one-off project.
Contingent labor has taken on a new meaning in today’s markets. These workers now play a pivotal role in the modern workforce, increasing enterprise adaptability and bringing specialized skills to meet the demands of today’s quickly evolving business environment. Companies are including contingent labor in their business strategy to improve competitive position and spur business growth. Including high-value independent professionals in the worker mix can contribute to improved workforce flexibility and help foster a collaborative and inclusive work culture.
Contingent Labor is No Longer an Outlier
Historically, enterprises have used contingent labor as a tactical resource. However, in recent years, this has shifted into a more strategic area. A recent study conducted for MBO by Forrester reveals that the trend of integrating contingent labor into a company’s talent mix is on the rise. Over 80% of respondents agree that increasing their use of independent labor can significantly impact the company’s ability to compete effectively.
This also means that approximately 20% of companies are not fully recognizing the strategic value of contingent labor. These companies are missing a crucial opportunity to build a truly agile and effective workforce. This is a pressing issue that the Forrester report emphasizes.
Focus on the Right Skills for Contingent Labor
Contingent labor is no longer just a temporary solution. In many companies, these workers are now integral to the workforce, bringing in specialized skills and enhancing enterprise adaptability. But not every independent professional a company engages is a strategic part of the business. It’s not necessary to view every potential role for independent contractors in the context of business strategy. Instead, the focus should be on roles that require skills of strategic importance. This targeted approach is crucial for the success of the workforce strategy.
A skills assessment is invaluable for understanding where to focus. This assessment will provide an accurate picture of the enterprise’s current state, the areas where skills are needed, and the recommended distribution of skills between employees and contingent labor.
Put simply, the steps in a skills assessment are:
- Make an inventory of all skills hired as full-time or contingent labor
- Look at current budgeting and where skills will be needed in the next 30-60-90+ days
- Use this data to create a list of skills based on business importance and frequency of hire
- Rank these skills in order of strategic importance
- Gauge the status of the most important skills in your current talent population
- Determine which skills are best based in the employee population, which are best residing in the contractor community, and which need to be in both
Your assessment results will enable you to create a plan for acquiring the talent with the skills you need most and will help your enterprise position your contingent workforce most effectively.
