Future talent management must include all contributors to work – both permanent and temporary employees and robots – if organizations want to reduce costs and boost competitiveness.
Organizations today are way off that target, according to the Total Talent Management report, by ERE Media and Staffing Industry Analysts. That's what John Nurthen, executive director of global research at Staffing Industry Analysts told me when he said:
Companies say ‘our employees are our greatest asset’ – but they don’t even know how many they’ve got.
The report finds that 20% to 30% of organizations don’t know how many workers they have, positions open or labor costs.
Part of the problem is that most companies use a wide range of temporary workers in addition to their full-time employees. These non-permanent employees come from a wide group of people: freelancers, contractors, outsourced workers, part-time workers, volunteers, in addition to robots and cognitive computing technologies that are doing jobs that could be done by people.
On average, 16% of the workforce comprises non-permanent employees, rising to 50% among the heaviest users, finds the report, yet organizations’ talent management plans hone in on permanent workers, ignoring their temp staff. These non-employed workers are handled separately from full-time employees, both in terms of hiring and how they are managed and motivated.
The report looks at total talent management in terms of what it takes to get work done, to the best standard and at the best cost, so it includes non-human intervention. Currently, only 5% of organizations are using drones and cognitive computing, but according to Nurthen, this small number will quickly mushroom and need to be factored into workforce planning:
Companies have different ways of getting work done. They need to think about whether it’s better to use full-time staff or contractors, but there are other things that can be done by robots and AI [artificial intelligence]and they are going to be replacing large parts of the workforce.
Taking a holistic view of talent management, encompassing all these groups will bring better cost management of their workforce. As Nurthen points out:
The cost of labor is the biggest expense for many organizations and frankly unless companies can get to grips with it they are not going to be competitive.
If workforce management is better coordinated organizations will get better quality work done and also minimize risk. There will also be improved productivity thanks to the increased productivity of having the right person in the right job brings – whether that person is freelance or full-time.
Economic uncertainty, skills shortage, a shortfall in productivity, globilization and technology advances are all pushing talent management to the fore.
Yet the concept of total talent management simply isn’t on the radar or most companies. While just over half the survey respondents did want to see a combined view of their talent pool, that left a hefty 46% whose HR and executive leadership were indifferent to the problem.
One of the problems with gaining transparency into headcount numbers is that the information is held in siloes, both in terms of management and technology. Data on temporary staff and permanent staff are held separately, but also individual country offices will hold their own data on employees. Nurthen explains:
These things get dealt within siloes. Large companies might be able to coordinate in a region, but not worldwide…Really you need one person with a global view of these things and able to make a decision.
It makes sense that this one person is the HR leader, but it requires a shift in the DNA of the professionals required, the report suggests. And they cannot do it alone. Highest level senior management backing is also vital to push through what is a major change.
For example, in large organizations HR generally deals with permanent recruitment or outsources that while temporary workers might be dealt with by the procurement department. Often an individual department they will decide to outsource – HR will be informed but not included in the decision.
It’s also common for local managers to make staffing decisions with little guidance or based on broad policies that may not fit their local requirements. The danger is that this simply reinforces the status quo rather than look at it strategically.
Major reorganization is required to change such practices and put HR in charge of these tasks. But the road to total talent management is fraught with difficulties. Nurthen likens it to a children’s animal balloon. When you squeeze one bit, a bulge simply appears elsewhere – the volume of air inside has not changed. He says:
With a recruitment program, if you lock down costs, a line manager will use more temporary workers. If they can’t spend money in one place, they will find another way to spend money….Many companies go through the process thinking they are saving money in one area, only to find it’s increasing elsewhere.
Implementing blanket, global changes won’t solve things. When multiple agencies may be used to hire temporary staff and as Nurthen notes:
It’s not realistic to have one global process in place in a ‘cookie-cutter’ model.” There will be local differences which have to be included.
It’s the complex role of the HR director to find the ideal mix of full-time and temporary workers.
Unusually, it is suppliers who seem to be more clued up on the problems and possibilities of total talent management than their customers.
SAP’s acquisition of cloud-based vendor management system firm Fieldglass last year, which manages temporary workers, is one indication that vendors are moving in this direction. Meanwhile, consultancies such as Capita are also recognizing the need for a more coordinated approach to talent management, notes Nurthen.
The report notes that better integration between the permanent Applicant Tracking Systems (ATS) and the Vendor Management Systems (VMS) for managing temporary staff will help the development of total talent management.
One of the barriers identified by suppliers is the lack of knowledge among their customers, even if the companies themselves don‘t want to admit their own inexperience.
If your company isn’t taking a holistic look at talent management you’re in good company. Nurthen notes that it was hard to find any examples of companies doing Total Talent Management:
Does TTM exist at the moment? The answer is no.
The early adopters are concentrating on talent acquisition, rather than the on-going motivation and engagement of all staff. But it is essential to look at engagement of the whole workforce. After all, when customers buy products or services from an organization, they don’t care whether the person who serves them is a permanent or temporary employee, so companies need to break down the distinction between these groups too.
Companies need to think about how to motivate and engage their temps, contractors and freelance workers as well as their permanent employees – something that is only done by 10% to 20% of the survey respondents (in fact, surprisingly, only half of the respondents said that engagement was a focus for permanent staff). A third of temp staff end up working for a company full-time, according to the report, so this investment is worthwhile.
With talent management a boardroom concern, Nurthen is convinced that the idea of managing all talent in the organization will soon be on the boardroom agenda:
Procurement of work has got more sophisticated and it seems rather obvious that this is the next big thing.
Having ‘a single view of the business’ or ‘one version of the truth’ has become the mantra for modern business, fuelled by the growing obsession for analytics and big data. But this report highlights how difficult this can be for something that at first glance seems incredibly straightforward: how many people work for a company.
Few would argue with the idea that greater transparency into the make-up of the workforce would improve the potential for cost savings and productivity and that similarly, better engagement for all workers will produce benefits.
It’s doing it that seems to be the problem.
But the IT world is used to dealing with siloes of data and suppliers are indeed stepping into the breach to help. Nurthen did warn, however, that while many said they could already do everything in this area, the reality may not be quite as rose-tinted. Nevertheless, help is on the way, for organizations when they are ready to make the step.
The bigger problem will in managing the massive amount of change Total Talent Management would bring. Trying to find the right balance between global control and local management is key, but tricky. As Nurthen explained using the balloon analogy, making changes in one area can impact others. Putting that holistic view in place is not something that can be done overnight. It will take baby steps.