U.S. workforces are evolving and non-traditional work is trending. In fact, the U.S. Government Accountability Office previously noted that around 40% of the US workforce are contingent workers, which is a term used for the non-employee or external workforce. Many organizations have large numbers of contingent workers, which they often manage with a Contingent Workforce Management (CWM) business function that may include using a Vendor Management System (VMS) to house all data and processes related to nonemployee workers. A VMS is similar in functionality to a human resource management system (HRIS).
Contingent workers may include the typical temporary workers, such as those filling in on a temporary basis, and outsourced functions like security, facilities maintenance or IT infrastructure. Contingent labor also refers to contractors and consultants, often working in areas where their industry knowledge and technical expertise are essential for business success. This can be true for the Information Technology (IT) function where the external workforce allows organizations to keep pace with the rapid pace of technical innovation. Indeed, many IT departments staff more than 30% of their workforce with nonemployees, on average, according to the 2018 Workforce Solutions Buyer Survey by Staffing Industry Analysts.
Organizations may consider including contingent workers in their strategic workforce planning. Unfortunately, there are not many tools currently available that allow organizations to analyze their entire workforce in one place or develop a talent acquisition strategy that includes both employees and contingent workers. VMS and HRIS systems often use different terminology, job titles and data formats, which may make it difficult to analyze workforce data in one environment.
Total Talent Acquisition (TTA) refers to using a unified approach for the acquisition of internal and external talent. A key objective is to use a decision-making process to determine whether a requisition should be filled with an employee versus a contingent worker (e.g., based on strategic workforce plan, cost, etc.).
One example of TTA is direct talent sourcing. Using their brand, many organizations have developed an internal talent pool to attract employees or contingent workers that are interested in the company.
Total Talent Management (TTM) refers to business processes that include all internal and external talent in talent management activities, such as talent analysis, talent acquisition, talent planning, talent policies and procedures, performance management, etc. Organizations that are embracing TTM also aim to implement technology supporting it, e.g., total talent data analytics, a common talent data repository, and decision support tools for TTA, a subset of TTM. People can bean organization’s most important asset and that includes the external workforce.
In the future, it is possible that we will see a convergence of VMS and HRIS technology into “people administration” systems in which an organization’s worker data can be analyzed for talent acquisition, worker on-boarding, performance management, compensation, etc. Organizations may be considering combining the CWM and HR functions into one “People” department. Organizations may be developing strategic workforce plans in which they identify the talent they will need to accomplish their strategic objectives, including whether roles need to be filled with employees or nonemployees. Managers who need workers to accomplish goals may eventually be using one system to create job requisitions and help them figure out (with some help from AI) whether to staff the opening with a contingent worker or an employee, in line with the overall strategic workforce plan. Organizations that get the bigger talent picture will be the winners in the war for talent.