The Workforce Diversification Two-Step
Here’s a new dance move that those tasked with workforce management for their organizations should learn and master if they want to boogie. It is called the Workforce Diversification Two-Step and it is a deceptively simple little maneuver that has the dual effect of improving workforce efficiency while also mitigating some of the risks associated with the utilization of contract and/or contingent labor.
The first step involves determining which roles within any given organization are best performed by full time employees and which may be better suited for filling with contractors. A best practice for arriving at such a determination should include a rigorous core versus non-core assessment of each and every role within the company.
Businessdictionary.com defines non-core jobs as, “Service aspects that are not necessarily required by a firm in fulfilling its value proposition to its customers, such as installation, operation, or maintenance of a system, which can be outsourced to third parties.” Core jobs are those that address the most essential functions in any given organization; typically those most critical to revenue generation. There is no legal or regulatory framework that dictates which roles are core and which are non-core, but it is a sound policy for every workforce management program to establish and codify their own definitions of which roles qualify as core and which do not.
Once these definitions have been created and agreed upon by all stakeholders, workforce planners can begin to isolate the non-core roles currently being performed by full time employees. On a position by position basis, a decision based on whether there are efficiencies to be gained by transitioning each position to a contractor or contingent resource. There are both financial and productivity benefits to this practice but care must be exercised to ensure it is properly applied.
The next part is just a step to the left and a jump to the right… no wait! That’s the Time Warp. In all seriousness, the second step in the Workforce Diversification Two-Step involves vendor panel rationalization. In short, while contractors can be valuable in many roles – especially IT leadership or management roles – companies must be cautious about concentrating their mix of contractors holding leadership/management roles within any one, single staffing provider. Doing so invites the risk of having proprietary knowledge walk out the door en masse should the vendor relationship sour. The simple solution here is to ensure a diversified spread of suppliers is leveraged when sourcing the contact labor for every functional area.
So to review the routine, start with a poised core vs. non-core assessment and follow through with vendor panel rationalization for a graceful performance of workforce diversification. Oh, and don’t step on your partners’ toes!