Total workforce management could be the need of the hour in a post-COVID world

Forward-thinking CXOs can lock in a future-ready talent strategy and adopt an agile process to ensure business continuity.
Long before the pandemic, the escalating number of flexible, temporary, and freelance jobs was a clear sign of the growing prevalence and acceptance of the gig economy. Unlike internal on-the-payroll employees, who traditionally have had to report to an office or other physical workplace, the external workforce tends to have more flexibility, including choosing where they want to work. In many ways, this trend has been good for both workers and for employers. For the workforce, it means a more flexible work environment, and therefore, employers can expect them to be more adaptable. The gig economy also gives employers access to a much larger pool of talent, allowing people to find suitable jobs when they might not otherwise have been able to do so for reasons such as an inability to commit to full-time work.

The COVID-19 pandemic has had two major impacts on the business world and the way we work:

First, it has disrupted nearly every business around the world, requiring companies to adapt quickly. On one hand, some businesses have faced a huge cash crunch because of complete or partial shutdowns, which has led to job cuts. Gig workers are particularly vulnerable to these cuts.1 On the other hand, some businesses, such as e-commerce companies, have faced unprecedented demand and have needed to find additional manpower—sometimes in huge numbers and often on a temporary basis. This has sown seeds of structural disruption in the employment world, calling for flexibility from both employers and workers. The traditional rigid framework for hiring workers and their management is no longer effective.

Second, fear of infection and lockdowns have restricted the movement of people in many parts of the world, and quite suddenly, many full-time employees are working from home. This has triggered an organizational shift and monumental changes in the ways people work.

These changes are blurring the lines between the internal and external workforce. CXOs would benefit immensely from adopting total workforce management (TWM), a strategy in which an organization adopts a unified approach to make decisions and take actions covering both the internal and external workforce instead of viewing each one in a silo. The pandemic has brought about a defining moment in the workforce ecosystem as companies wrestle to overcome new hurdles in their operations. Going forward, companies need to be agile and proactive, recognizing the crucial link between business output and human capital and embracing a more dynamic staffing model.

An all-inclusive strategy
With TWM, companies can make decisions and manage every segment of their workforce—from full-time employees and contingent workers to managed, outsourced, and professional services—all under one umbrella. TWM ensures that the life cycle for every segment of the workforce is managed properly and homogeneously to ensure efficiency, engagement, and compliance. TWM allows the workforce to operate fluidly so that one segment can replace the other if necessary.

This comprehensive view comes with many advantages (see figure 1). Case in point: when Shawbrook Bank implemented TWM to treat its workforce as one ecosystem, the company was able to cut its agency spending by 44 percent and reduce the time it takes to hire from about 40 days to 22 days.

Managing internal and external workforce brings benefits
When it comes to lowering costs—a top priority for HR professionals, TWM helps companies capture sustainable results by optimizing the cost structure of the whole workforce. Our experience has been that organizations often fall into the suboptimization trap, where savings from one type of workforce are nullified by escalating costs in the other. Usually, layoffs of internal employees are followed by a surge in spending for contingent workers and managed services. TWM creates visibility and helps companies make the right decisions about the workforce—no matter which segment workers are in.

Four imperatives for steering TWM in the right direction
Bridge the gap through policy and governance
The external workforce cuts across regions and functions, yet no one truly owns it. Multiple departments from HR to procurement are involved in the process, but there is often a lack of visibility and very little control. Hence, there is room for optimization. With TWM, companies are accountable for every activity throughout the workforce life cycle— requiring a robust overarching policy. The first step is to set up a TWM department with both HR and procurement personnel, dividing responsibilities among internal and external stakeholders such as managed service providers (MSPs).1

MSPs are an important part of the TWM strategy as they are the talent aggregators that bridge the gap between supply and demand. This approach needs to be supported by a top-down governance system, where HR and procurement come together to manage requests and processes for the internal and external workforce in conjunction with the request generator (the business) and the request processor (other functions) (see figure 2). The need for talent then gets communicated to either the employee market or the MSP, which then channels the right talent from its large pool of suppliers.

Managing the whole workforce requires structured governance
Embrace the new talent ecosystem by matching business needs with talent needs
Answering three questions can help CXOs understand how prepared their businesses are to take on the new ecosystem:

How are talent-related activities addressed in the company? Is there any visibility?
Is there a change in top management’s mindset about the new gig economy and new styles of working?
Are HR and procurement working together to manage new talent demands and the evolving landscape?
The leading companies are future-focused rather than simply managing the present situation. They view both their current and future talent and capability needs and align them with the requirements of the workforce. The first stepping is to translate the business strategy into a talent strategy and identify sources for talent, such as employees, contingent workers, or managed services, based on the needs of the business and the relevant skills desired.

Create an airtight process for managing the workforce life cycle
A robust TWM talent process needs a seamless operating model. A global model with local adaptations ensures a harmonized and easy flow of information, better change management, and visibility into the process (see figure 3). Each step needs clear responsibility and accountability. A standard global process makes it easier to work with MSPs, and a clear process ensures that management can quickly identify any bottleneck, which can then be plugged across the system. A byproduct of smooth systems is a better overall experience for the workforce, which in turn attracts more of the right talent and creates a virtuous cycle of business growth.

Manage the whole workforce with one unified plan of action
MSPs need to be treated as partners, not mere vendors, which can help develop partnerships for success. MSPs engaged by an organization can either be fragmented or consolidated, and the organization may have a regional or a global approach toward using them. MSP consolidation at the regional level makes sense. MSP activities are region-specific as they depend on the availability of talent and the local- or country-specific policies. Region-specific consolidation followed by having commission-based contracts with MSPs can make them more invested. They can become strategic advisors who provide insights into best practices for managing the workforce as well as the latest industry benchmarks.

CXOs must drive value from the top down by demonstrating their support and adopting a proactive approach by setting up budget pools for hiring and management throughout the year.

Take friction out of the system
Treat job descriptions almost like mechanical part specifications. They need to be as specific as possible to ensure a high-quality, smooth hiring process. Think of job descriptions as the lubricant of the well-oiled TWM machine.

Robust, detailed, and well-rounded job descriptions need to be developed for every type of role—both for full-time employees and for the external workforce— to create flexibility in choosing the right talent at the right time. Each job description can be categorized into functions and outcomes to avoid reinventing the wheel every time someone needs to hire a worker.

Standardized but flexible job descriptions make TWM seamless by enabling digitalization of the workforce life cycle. Armed with proper job descriptions, the hiring manager can just plug and play within the system that digitally houses all job descriptions and types of talent. The hiring manager can then define the specific need and choose from the right pool of talent with one click.

A view for the future
TWM is the workforce approach for the future, and now is the time to implement it—when companies need it the most. A successful approach will require investments and a great deal of change management, but the benefits are massive—a workforce transformation in the truest sense. When the external workforce is viewed in the same light as full-time employees, the result is cost-effective decisions that lock in the right kind of talent for the job. With the ever-changing talent landscape, the rise of the gig economy, and mounting financial pressures on businesses amid the COVID-19 pandemic, TWM can unlock the flexibility and continuity that every business now needs.

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