Through our conversations with contingent workforce management professionals, it’s been clear there is no single right way to determine program ownership. Human resources and procurement each bring a strong case to the table. A number of factors would determine which group should manage the program — or whether they should share the responsibility in a hybrid approach.
This three-part series will provide Staffing Industry Analysts’ insight and perspective specific to the various ownership options, explaining when, where and why it makes sense to utilize each model.
Part 1 focuses on the strengths and the value of having HR own your contingent workforce program.
Talent strategy. As many organizations expand the numerous ways to engage labor, a more robust strategy is required to effectively engage the entire spectrum of the workforce. HR plays a critical role in demand planning and helping to determine the right labor channel to utilize. What was once an “employee versus temp” decision must now take into account independent contractors, service providers and outsourced labor support in addition to the traditional staff augmentation workers we are familiar with. These expanded approaches to labor require careful consideration in relation to their utilization and are becoming more embedded in organizations’ talent strategies. With HR typically responsible for employee headcount allocation, it makes sense for HR to take ownership of these contingent workforce areas to be more thoughtful about where to assign headcount in consideration of the budget.
Diversity. A growing interest for many organizations is understanding the diversity of their workforce. This initiative naturally starts in HR as companies have a primary interest in the diversity, equity and inclusion of their employee workforce. As this view of diversity expands to include the contingent population, there is value in orienting program ownership to HR to align the diversity initiatives across all labor categories. HR’s interest in owning the contingent program is likely to increase as many countries and US states have started mandating the collection of diversity data that includes an organization’s contingent workers.
HRIS. Many organizations have established HR information systems (HRIS) teams to help manage the growing footprint of HR applications, including enterprise resource planning (ERP) systems such as Workday and SuccessFactors; applicant tracking system (ATS) applications like Bullhorn or Taleo; career portals; talent platforms; job boards; and background check platforms. As a standard requirement, most organizations are looking to integrate their contingent systems to an ERP, which requires partnership with HRIS. If companies are looking to expand their integrations between these systems and even shared access with CW programs for common applications, there may be more of an interest in HR to fully own these systems and the programs that operate them.
Talent sourcing. Concepts like direct sourcing have started to develop full talent sourcing models that include areas of the contingent workforce. Many organizations are realizing that the talent they are interested in may exist in both places, and thus the organization may be competing with itself or duplicating efforts to attract this resource. As the direct sourcing mindset grows, it is important for HR to collaborate on the best ways to attract and manage talent to help create a stronger, single talent brand and eliminate the redundancy of effort and systems.
Policy/governance. Most organizations have guardrails for their company to operate within that are typically defined within a policy or governance framework. An important tenant of policies is ownership. When we think about the areas that apply to people — such as behavior, ethics, responsibilities, jobs or compensation — we associate HR as the owners. With an existing ownership or influence over the policies most relevant to the contingent workforce, it may suggest an expanded ownership by HR of the CW programs that supply people to the organization. This may help provide a more consistent and seamless governance model including contingent workers.
Risk. The importance of understanding and managing the risk of an organization should not be undervalued. The contingent workforce brings a considerable amount of unique risk, such as misclassification of workers. HR is positioned better than any department to help the business understand these risks and help to effectively mitigate them. Often, HR already has processes in place to address the workforce’s risks and may even have close relationships with labor legal to quickly assess and triage risky situations.
Funding. Regardless of who owns the CW program, it is important to understand the value of making financial investments to drive program improvements specific to enhanced capability and improved performance.
Despite its many strengths, organizations should be aware of an inherent challenge HR would have to overcome if given ownership of the contingent workforce. Specifically, HR has traditionally spent its time within the boundaries of its own organization, focusing on internal processes, policies, payroll, contracts and the plethora of activities associated with engaging and maintaining an employed workforce. For HR to be effective in the ownership of the contingent workforce program, it must also be aware of current trends in the world of work outside of its building and embrace the strategic importance of the external workforce, regardless of what form that external workforce takes.
There are many benefits to having HR own your contingent workforce program. However, this is not always the best solution for every program. SIA’s recent Buyer Survey indicates that HR may have the largest representation among the buyers surveyed; however, there are other strong contenders for program ownership. Part 2 of this series will explore why some organizations are looking at procurement as the home for their programs.