Gauging the Impact of COVID on Contingent Workforce Utilization Levels
The pandemic year of 2020 has wrought unimaginable changes across every facet of the global economy. Virtually overnight, entire industries have been decimated while others have experienced unprecedented spikes in demand for their products and/or services. Every employer has had to make on-the-fly corrections to their workforce management strategies to adapt to their new situations. Whether it is to reduce headcount, add headcount, or modulate the composition of their workforce, one commonality seems to emerge from the fray: the critical role of contingent workforce resources.
It is perhaps not surprising that many workforce management professionals are gravitating towards increased utilization of all types of contingent workforce to improve flexibility in uncertain operating environs. However, add to the mix the radical restructuring of workplace infrastructure – the widespread adoption of remote work, and the rather surprising resilience of worker productivity – a need for flexibility in workforce management underscores the intrinsic value of leveraging contingents of all varieties.
To that point, a recent SIA publication, Covid-19: Workforce Manager Responses and Intentions Survey 2020 revealed a net reduction in use of aggregate non-employee worker types of only 25%, a figure far lower than might have been expected given the circumstances. The survey asked contingent workforce program managers, “Based on your understanding of your organization’s position today, how do you anticipate use of the following worker types changing during the second half of 2020?”
The aggregate of all worker types indeed showed a nearly even split between respondents decreasing contingent worker levels and those either increasing or keeping levels the same (after the overall reduction in usage of 25% which reflects the overall rise in unemployment during the pandemic). Digging a little deeper into the data however, it is clear that most individual contingent worker classifications were either retained at existing levels or increased more than they were reduced.
The survey revealed statement of work (SOW) consultants were increased or retained at 59% versus 41% reduced. For Direct Engaged temps, the spread was 56% increased or retained versus 44% reduced. Freelance resources did not fare quite as well with 46% increased or retained compared to a 54% reduction rate and ICs were an even 50/50 split. Interestingly, it was temp agency workers that fared most poorly in the survey with 56% of respondents reporting reductions in their utilization versus 44% increased or retained.
The correlation between the relative strength of Direct Engaged temps versus those sourced via temp agencies can be attributed to the value derived from direct sourcing strategies a topic this blog explains in this important post.
Clearly, the contingent workforce management community is as impacted as their counterparts in HR when it comes to addressing the severe disruption caused by the Coronavirus. Yet, the data in this survey underscores the important role of experienced workforce management solutions providers with the wherewithal and understanding necessary to guide workforce managers through these rapid changes to the operating environment. For expert consultation on how to recalibrate your workforce management plans, including more details on the benefits of plying a direct sourcing strategy, talk to a nextSource representative today.