Waiting for an all-encompassing total talent management technology management platform might be an exercise in vain. To move the needle on TTM, the industry needs to execute something that is relevant to multiple stakeholders now. One such talent initiative would be a comprehensive and integrated contingent workforce conversion initiative designed, structured and supported by both the talent acquisition and contingent workforce program teams.
Contingent worker-to-perm conversion activity is well-established in the marketplace. But how do you transform it into a TTM-focused business talent initiative?
The Process. A key step is transitioning your contingent worker conversion program from a sporadic, tactical “try and buy” activity for engagement managers to a strategically, managed sourcing channel for your organization’s talent acquisition (TA) group. This means positioning the TA group as a key stakeholder client of the contingent workforce talent pool. With that strategic recognition, one would have to understand what kind of talent profile, background assessments and quality levels the TA group requires for perm position fulfillment. Additionally, a program would need to understand what annual talent demand plan the TA group is trying to support and what role the CW program may play in supporting that. Basically, you need to discover the TA group’s sourcing channel and talent pool wants and needs. There are a few large, global buyer organizations that will actually not allow temp-to-perm transactions, but only a very few, and this might be because of the limited development/vetting of those organizations’ CW talent pools.
A competent TA group is always measuring the effectiveness of specific talent candidate sourcing strategies and channels. This is a key performance metric for a full-time hire process. Hence, the CW program possibly becomes a candidate sourcing vendor for the TA group with everything that kind of relationship implies, including being measured as a quality source of talent compared to others. It’s a different mindset and requires more due diligence when targeting CW talent, such as discovering whether the workers are willing to consider a full-time role if offered and a restructuring and enhancement of the CW sourcing practices, vetting procedures and talent quality performance measurement and formal evaluation levels of contingent workers currently engaged.
Two-way Win. Of course this might mean a deliberate expansion of the CW program’s current charter, mission, operational practices and standards. It would also mean involving the TA group in the CW program as a talent quality, advisor in the execution as a key sourcing channel for the permanent hire candidate pool.
The bottom line is the TA group (more specifically, the recruiters) will have its own standards in defining a qualified perm candidate profile and the CW program will need to evaluate whether the program operation can competitively meet those standards. Certainly, the CW sourcing referral cost will be very market competitive, but the talent content has to be attractive to the wants and needs of the TA group.
Incidentally, this could be a key two-way win during the management of this new key client relationship with the TA group, because there will be opportunities to also access and leverage perm-hire “silver medalists” (first runner-up) candidates, who might consider a CW engagement in the short-term. That would be a great way to strategically, enhance your next TTM business talent initiative, “direct sourcing.”
A Note of Caution. When you aggressively seek to convert contingent workforce resources to a full-time position, a staffing provider’s perspective can view conversion transactions as losing a valuable revenue stream asset (their contingent worker staff). Thus, staffing providers are not overly thrilled with conversions and tend to establish fees associated with those conversions to reflect that loss. Conversion fees can fluctuate depending on the type of skill sets and work involved. According to Staffing Industry Analysts’ research, staffing providers’ temp-to-perm conversion rates range from 15% to 50% of their contingent worker’s annualized salary. The fees tend to decreases the longer the contingent worker has worked for the buyer organization. The median typical fee reported for contingent workers who have worked at a buyer for one month is 15%; for three months’ service, 10%; and for six months or more, there sometimes is an administration fee or no conversion fee at all. No matter the challenges with managing bruised relationships with staffing partners, conversions seem like a highly vetted, cost-effective sourcing channel for the organization’s TA group if proactively structured and strategically managed.
