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Friday, July 25, 2008
 Topic: Contingent Staffing
Reference: Sullivan, John, Dr. “A flexible force”. Workforce Management, July 14, 2008. p.58.
As markets continue to tank, mortgages continue to implode, and consumers are reeling in their pocketbooks, companies are already in contingency planning mode for staff cut backs. Many of the large private companies like Ford, GM, and those in financial services have announced huge layoffs. Private operations are facing the same scenarios and have been forced to evaluate staff planning in light of strong recessionary signals. Talent is a key differentiator in the marketplace and staff reductions threaten bench strength, innovation, and cohesiveness when organizations cannot afford it. It also threatens to exacerbate the already difficult challenge of finding the right person for the right position. In the referenced article the commentator indicates that HR needs to be especially strategic and proactive at this time. “Avoiding large-scale layoffs should be a priority, because even when done correctly, layoffs can have legal implications as well as a dramatic impact on recruiting, morale, retention and overall workforce productivity.” The key to dealing with this problem is to build a contingent workforce before you need it, so that it can be managed more flexibly in crunch time. “Having a contingent staffing strategy helps HR avoid traditional…approaches such as the freezing of hiring, promotions, pay or budgets.” The commentator says that the keys to contingency staffing are having a good strategy, monitoring costs, designating contingency hiring based on targeted percentages (5-25%) and doing so in relation to the positions most likely reduced in a downturn. Using these principles, organizations can better avoid layoff turmoil through contract management and vendor assistance. “In highly volatile environments, managers should be rewarded for leveraging alternative labor types when the nature of the work is short term or directly related to sales volume.” I am not sure that I agree with all of the sentiments here. In particular, depending on the underlying relationships and contributions, reducing contingent hires can have just as big a negative impact as some permanent hires, if not more. Disruption is disruption and the better plan is to have a sound strategy for managing it and keeping staff on task. The key to me is to watch hiring trends closely throughout the business cycle and to keep nonessential staffing to a minimum. Eliminating automatic backfilling of positions and having a clear outsourcing strategy are even better ways to manage the disruption of downturns in the business cycle. In any event preplanning your communication and staffing plans to staff are critical to survival. Let me know your thoughts on this important topic.
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