The value of constructing a common vocabulary to be spoken across all contingent workforce program stakeholders and customers cannot be overstated. Lack of defined and controlled CW program terms can undermine a CW program’s value and credibility as well as a program leader’s ability to execute effectively.
Most CW team members have a consensus on terms frequently used to describe their contingent workforce — such as worker classification types, tenure, termination, time to fill and bill rates. However, in many programs, these terms are not officially defined, documented or published throughout the organization. Instead, CW programs operate under the general assumption that all stakeholders (including engagement/hiring managers, suppliers and leadership) speak that same language.
The reality is that common contingent workforce terms have multiple interpretations. For example, there are several terms that can potentially be used for “supplier,” a common element within a CW program: partner, staffing provider, supplier partner, vendor, agency or consultant. And how many names can you think of for external workers? They might be referred to as staff augmentation, temporary workers, temps, contractors, consultants, contingent workers and/or even SOW resources and more. Meanwhile, the workers themselves want to be called “consultants” because they think they will be paid more.
While interchanging familiar words like “temporary worker” and “staff aug” may seem like splitting hairs, the practice can have a bigger impact than one might think. It can result in misleading data — and worse, decisions based on that flawed data. Consider the following scenarios:
Budget cuts. A COO requests a report of all “staff aug” workers engaged at the organization. The program categorizes “staff aug” as temporary workers engaged under a staffing agreement. The report provided to the COO does not include SOW workers, independent contractors, outsourcing service resources or freelancers, unaware the COO refers to any external worker to the organization as “staff aug.” As a result of the data provided, a business decision is made not to prioritize budget for a critical upcoming CW program project.
Costly requisition. An IT manager, short-staffed with multiple projects underway, has an employee going out on leave. In a panic, the manager reaches out directly to their favorite vendor informing them that a high-level “consultant” is needed ASAP to fill the gap. The vendor hears the word “consultant” and writes up a time and materials statement-of-work contract for one consultant at double the cost of the program’s rate card for a standard “temporary worker” position.
Goal misalignment. A CW program’s MSP reports massive cost savings in its annual review. The program leader sends out company-wide communication highlighting that the program doubled its cost savings goal for the year. The finance team immediately requests a comprehensive breakdown of the “cost savings.” After review, the finance team determines that the majority of the claimed “cost savings” are what finance terms “cost avoidance/soft costs,” and little real “hard savings” can be measured and calculated in the accounting period. In short, the program did not meet its actual cost savings goal.
Wasted resource hours. Hours of program bandwidth are used every week to create a customized report pulling data from the organization’s VMS and HCM systems. The taxonomy is out of sync in the different systems, with varied field names, spacing and characters. Data must be normalized and scrubbed on every report every week, resulting in hours of lost time and costly manual errors.
Had the stakeholders in these scenarios been using standardized terminology, these business pitfalls may have been avoided. Unfortunately, these types of miscommunications often go quietly undetected, leaving programs struggling to create accurate, timely visibility and cultivate trust with stakeholders and unable to accurately highlight a program’s progress and success, which can lead to wasted time and poorly managed CW spend by the organization.
No matter what stage your program is in, a best practice is to build, define, broadcast and enforce a CW program taxonomy reflective of your program’s unique language. SIA maintains a lexicon of contingent workforce terms that could be a reference for this effort. CW programs will benefit significantly from providing program taxonomy guidelines to vendors, leadership and managers. Tip: To promote buy-in, make the taxonomy accessible and easy to understand, and reference and reinforce the taxonomy during organizational meetings and on CW program websites, media and documentation.
A second critical best practice is to align all CW program tools and reporting fields to the program’s taxonomy. This will save your CW program valuable time while increasing the user experience. Benefits to your program will include easy searchability, better downstream and comparative data analytics, minimized misclassification, more reliable data and better decision making.
Without a defined CW business language, discrepancies, misclassification and data errors will remain a threat to your CW program’s overall value, growth and success. A program taxonomy creates an agreed-upon vocabulary used among stakeholders and ensures everyone not just understands but also speaks the same CW business language. While achieving a common language takes time, the benefits far outweigh the effort and costs to make this happen.