Most organizations still pack their ranks with traditional full-time employees, but many now mix in part-time, temporary, contract and gig workers. These contingent workers offer an important way for organizations to fill skill gaps and increase productivity, but HR needs a new workforce planning approach to leverage these workers as they become more mainstream.
“Traditional approaches to workforce planning aren’t built to cope with the realities of the evolving work environment,” says Matthias Graf, Senior Director Analyst, Gartner. “HR leaders need to redesign their workforce planning around work instead of people, and capabilities instead of capacities.”
Workforce management systems and applications are poorly equipped to plan and track supply and demand based on jobs and assignments rather than continuous work
Workforce planning typically centers on identifying and installing the people and capacities required for business strategy, as well as diagnosing talent risks and charting a plan to address talent risks and gaps. But this long-term, static approach is out of step with structural changes in work and workforces.
Employment models and work itself are changing
Today’s work is often broken down into a series of smaller jobs and assignments, especially to account for innovations in production and new technologies. These individual tasks and projects increasingly feature in characterizing someone’s activities — and employees often work on multiple jobs, assignments and projects at the same time.
Gig jobs span the skills spectrum — from physical labor and data entry to research and social media marketing
This environment makes it difficult for HR to gauge how much labor supply is available. Additionally, many workforce management systems and applications are poorly equipped to plan and track supply and demand based on jobs and assignments rather than continuous work.
The workforce structure is also changing, with employment models increasingly segmenting and blending permanent and contingent labor.
At most organizations, according to the Gartner ReimagineHR Effectiveness Survey, the vast majority (90%) of employees are still traditional full-time employees, but the rest are a mix of part-time employees, contingent workers and the self-employed. Gig workers are especially evident in the hospitality, media and professional services industries, and the U.S., U.K. and India have the most gig workers in the world. Gig jobs span the skills spectrum — from physical labor and data entry to research and social media marketing.
As employment models shift further, organizations are likely to see more and more tasks and assignments spread across internal and external employees — sometimes, even across organizations (e.g., via consortia or project groups). Traditional workforce planning focuses more on permanent labor and therefore is ill-equipped for all the capabilities available throughout and beyond the organization. HR may also lack full visibility into all contracts with external employees — and thus the supply and cost of capabilities — because many of these arrangements are directly managed in procurement or by the businesses.
To more effectively address the implications of these changes in the work ecosystem, and to drive efficiency and effectiveness in workforce planning, HR leaders can do four things now.
Take a shorter-term, more flexible view
Shift from a long-term, static view of people and capacities to a shorter-term, more flexible focus on work and capabilities. Start by breaking down work into a series of tasks and assignments and determining which skills are needed to complete key activities. Build an enterprisewide “job repository” with all critical tasks and assignments, as well as skills, included.
Align with internal HR and IT leaders and external vendors to integrate contingent labor platforms with your HR IT systems to gain access to external skills and availabilities — making sure to use comparable skills definitions. Provide business managers with upfront data on available skills, and help them decide which type of labor to engage with when planning to fill a job. Make this a regular process that runs at least biannually between the businesses and HR to ensure flexibility and adaptability.
Leverage modern workforce management platforms
Collaborate with leaders from enterprise IT and HR IT to understand the functionalities of your workforce management applications, and align them with internal systems for better and faster planning of work.
Create a plan to upgrade your current internal systems to support permanent and contingent labor in the same application. Note that the workforce management application market is often separate from HR admin and talent management markets.
Redefine ownership of workforce planning
Manage all contracts for contingent labor, and include external employees in your supply and demand planning for jobs and assignments across the organization. This includes sourcing, onboarding, paying and offboarding contingent labor.
Partner with procurement, legal, enterprise IT and HR IT to develop a comprehensive total workforce management program that addresses the needs of internal and external employees and the organization. Develop a technology roadmap with your human capital management (HCM) technology vendor to support comprehensive workforce management.
To help overcome the fragmented system architecture that often exists for managing different workforce segments, make sure to incorporate the vendor management system (VMS) and freelancer management system (FMS).
Change underlying supply and demand models
Utilize the total workforce cost of permanent and contingent labor throughout the organization for as-is analysis and scenario planning. Be sure to create visibility into workforce-related costs for all internal and external employees by sourcing all relevant data into one tool and establishing an analytic process that focuses on key categories (e.g., type of employment, location, organization, function).
Make underlying skills and competencies for all work types (i.e., tasks, assignments) visible, and establish a clear relationship between work and capabilities.