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Leaders: Here’s how to make sure you’re not excluding an important part of your workforce

The CEO of Beeline says that ignoring this pervasive and productive category of the workforce can hold back your entire company.

Leaders: Here’s how to make sure you’re not excluding an important part of your workforce
[Source illustration: marchmeena29/iStock]

Contingent and temporary labor, external and extended talent. Consultants, contractors, project-based workers and gig workers. All of these are different labels for anyone who works for a company but isn’t classified as an employee. 

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Some talent experts estimate that today these workers comprise as much as 47% of the total workforce. Once reserved for short-term administrative workers and seasonal help, today contingent work has grown to include longer-term projects such as digital transformation initiatives and COVID vaccine research and development.

Despite serving in strategic roles, possessing sophisticated skillsets, and working alongside full-time employees, extended workers are often underutilized and undervalued. Companies need to understand the power of this labor category and then leverage this talent to impact productivity and the bottom line. 

The rise of the extended workforce

There’s a growing list of reasons why contract work is appealing to today’s workers. At the highest level, it empowers individuals to create their own career paths without restriction. They can move from company to company and accelerate their learning curve. They can scale work up or down, setting their own professional pace. This level of flexibility and control is of utmost importance in today’s environment. 

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The business case for leveraging the extended workforce is strong. Companies can scale this portion of the workforce up or down at will to meet their talent needs in real-time with the ebb and flow of business. Contingent workers also allow companies to gain access to specific skills for certain short-term projects such as digital transformation initiatives or seasonal financial demands. Another strategy is to use highly skilled contractors to train and upskill full-time employees under their direction.

These benefits tie directly to the massive skills shortage keeping companies from both meeting existing demand as well as executing strategic initiatives. No industry is immune to the dire need for talent with unemployment at only 4.8%. Looking ahead, companies are reporting their highest hiring outlook in almost 60 years. The extended workforce is a real and necessary pipeline of permanent workers, and how companies view and treat contingent workers plays heavily in whether these workers even want to be in the pipeline for these roles. 

Creating a harmonious workforce to drive value

As all these factors converge and we rely more heavily on extended workers, we need to adopt workforce strategies to integrate every type of talent to positively impact collaboration, culture, retention, productivity, and the bottom line. How can you integrate these workers to drive better outcomes when it is also necessary to distinguish between them?

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The separation is necessary to protect companies from the risks of co-employment: when two companies have obligations as the employer of the worker. In the case of the extended workforce, this is typically the staffing firm and the end client. 

Understand the numbers and the value. For companies to strategically optimize the skills already inside their organizations, they need visibility. It’s critical to analyze the workforce in terms of skill count vs. headcount, especially with the frenetic pace of today’s business world and the lack of available talent. This begins with a strong system of record for all external labor separate from employees and a way to view data and insights into the total workforce, inclusive of non-employees.

From a cultural perspective, everyone from their employee peers to the C-suite should understand that up to half of the people working on your projects, attending your meetings, and delivering on your company’s mission are extended workers, and are just as valuable as anyone else. Not doing so can result in an unhealthy cultural division within your organization.

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The pandemic underscored this need for visibility. When the pandemic struck, many companies couldn’t answer basic questions about their contingent workforce. Where are they? Who are they? Can they work remotely? Do they have what they need? This had a direct impact not only on contractors’ wellbeing but on company productivity as well, unnecessarily hindering business continuity. 

Technology tools such as a vendor management system (VMS) will increase visibility and management of the contingent workforce. Your HRIS and ERP systems should seamlessly integrate with any solution managing the contingent workforce. Organizations need a system or tool that can bring their non-employees as close as possible to your organization without blurring full employment. 

Examine the impact of your processes and policies on culture. Everyone wants to matter and feel that their work is important. The feeling of being included is achievable regardless of how each employee is being compensated or classified. Realize the commonalities of both contractors and employees: they contribute to the goals of the project and the mission of the company. 

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Some of the ways that organizations distinguish between worker types are antiquated and worth a re-examination of how this makes non-employees feel about the work they do. For example, companies may separate employees and contingent workers within the physical office, or security badges are often different colors based on worker type. 

Delineating the risk and benefit of some of these age-old practices may uncover that some are less relevant today than before and are actually hurting your ability to make non-employees feel respected. 

Culture is often driven by the corporate boundaries that are drawn, for better or for worse. The kind of process and operational steps a company takes in utilizing contingent workers directly informs the culture. And, that culture has implications well beyond the employer-worker relationship. Regardless of classification, your workers are consumers of your products and services, too. How you treat them has a direct impact on how they consume your brand.

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The ultimate gut check is to ask yourself, “Is this policy creating exclusionary behavior?” If it is, it’s time to take a closer look. Companies should pay attention to how their processes impact culture. Does separation of workspace lead to an “us vs. them” mentality? Do different-colored badges create a divide in meetings? If the answer is yes, it’s likely impacting innovation and productivity, and limiting company potential. 

Leadership has an important role

Company leaders can and should be advocates for the extended workforce. Understanding risk is important, but it should not serve as an excuse to forgo deploying this highly productive group or treat external workers as second-class citizens.

First, leaders need to communicate the value of this segment of the workforce. This can only be credible if leadership understands the numbers and strategic power this workforce brings. Tracking, managing, and analyzing this workforce with technology will make this possible. 

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Second, HR and procurement need to work side-by-side to maximize the value of all workers. They should co-develop a comprehensive talent strategy that accounts for all labor. They need to analyze required skills and balance against the supply and demand nuances in the market. The extended workforce shouldn’t be an afterthought, but rather an important talent category. 

Team members need to work alongside each other, too, regardless of worker classification. At times contingent workers can put up just as many barriers as full-time employees. It’s up to team managers to look for this and work to dissolve those cliques. 

All members of the organization, from the top down, should understand the value of the entire workforce. Leadership should model a code of conduct and behavior that promotes respect. Policies should outline procedures with an eye on balancing risk mitigation and cultural impact, and technology is needed to ensure the workforce is optimized. When this happens, companies will see teams come together, culture and morale improve, and productivity rise. 

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Doug Leeby is CEO of Beeline, helping companies around the world better manage the extended workforce.


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