Tenure policies have a legitimate role in the ongoing management of contingent workforce (CW) talent. That role can range from setting a point in time that engagement managers need to review the use of a specific CW talent in their business operations, to ensuring the satisfaction of the “long-term or multiple project” contingent worker talent.
When it comes to mitigating co-employment, however, tenure policies can have a limited role if the corporate benefits plan documents do not specifically define and eliminate benefit plan participation by engaged contingent workers. (Last month, I discussed the “mythconceptions” of tenure policies and co-employment risks.) One of the most effective strategies to mitigate co-employment risk is to ensure your corporate benefit documents specifically exclude contingent workers.
Co-employment aside, that doesn’t mean tenure limits have no value. In many cases, the requirement for a contingent worker is temporary, associated with a specific business need with a defined beginning and end timeframe. But in a growing number of circumstances, budgetary and head count constraints are making these business requirements more longer-term in nature and/or a permanent manner in which the business is conducted.
Thus, a tenure policy can be used to force an employment status review of contingent worker talent. It’s been noted as “completing the try and buy” concept of engaging a contingent worker. At some stated point in time, engagement managers need to evaluate why a specific contingent worker talent is not secured in a full-time, employment role with the organization. Contingent talent that is delivering services successfully in the business needs to be systematically evaluated for a longer-term, permanent role in the organization, before their skill sets and “tribal” knowledge are lost to other competitive alternatives in the marketplace. Converting contingent workers from “temp to perm” can be very cost-effective and is a becoming a key sourcing channel for permanent talent requirements.
One downside of tenure policies, though, is that it creates an artificial CW talent turnover with its accompanying costs and business disruptions. Sometimes the organization’s headcount limits, budget or business needs will not support a permanent role, but the temporary talent requirement remains. In addition, some high-performing contingent workers are not interested in permanent roles and prefer to engage with multiple projects and organizations.
So a tenure policy can play an important role in the tactical, workforce management of high performing CW talent. It can force engagement managers to evaluate their CW talent, the roles and functions they play in their business operation and whether this talent needs to be secured in a permanent position in the company. A tenure policy can also support the ongoing cost management of the service engaged and the effective incorporation of tenure discounts to appropriate fair market pricing of the service.
The final question is how to engage a tenure policy effectively such that it applies this evaluation concept versus just enforcing “artificially” disruptive CW talent service turnover. With hundreds to thousands of CW engagements taking place in an organization at any point in time, managing the application of tenure limit evaluations can be burdensome and counterproductive. Hence, a well-designed tenure limit exception policy that supports the goal of preserving key, high-performing CW talent, but is administratively feasible to implement, will be a key element of a successful tenure policy.