The Workforce of 2020 and Beyond

Past 100 years HR/Personnel responsible for employee-employer relationship

Employment is fading away rapidly

Your HR job as you know it, is at risk!

What should HR do?

Managing the Blended Workforce 2020

Meet Zoe… • Found her on Democracy Journal.org*

• Millennial in her late 20’s • Renting a small apartment• Monthly car payments

• Works Part-Time (no more than 29 hours/week)• Hotel Front Desk Reception• 5 years of service, but no benefits• Good performance, however her annual raises don’t keep up with inflation• Actually works for the local subsidiary of a national company that manages front desks at hundreds of hotels

• On ObamaCare; no 401(K) or savings

• Would like to get a college degree, but no time or money for it

• Other income:• Landscaper (10 hours/week finds jobs on TaskRabbit)• UberX peer-to-peer ride sharing (8 to 10 hours/week)• Sometimes rents her apartment on Airbnb (and stays with her parents)

• Can’t afford to take time-off

Managing the Blended Workforce 2020

*Article: Shared Security, Shared GrowthOur changing economy has given rise to a nation of freelancers and contractors—and the need for a twenty-first-century social contract.

The New Workforce of 2020 and Beyond• Contingent workers are employed in nonpermanent positions as independent contractors, temporary

workers, contract workers, on-call workers, consultants, freelancers, or are self-employed. The U.S. Bureau of Labor Statistics (BLS) defines contingent work as work where no implicit or explicit agreement exists for the work to continue, typically beyond one year.

• The Freelancers Union estimates there are 42 million independent workers in the U.S. (or 30 percent of the workforce)

• In contrast in 2005, 30.6% of workforce was contingent

• Total spending on gig work in the U.S. in 2015 was $792 billion -- SHRM Article, Sept 26, 2016

Managing the Blended Workforce 2020

US Government Accountability Office 40.2% of Workforce is Contingent -- 2010

Staffing Industry Analysts (SIA) Research 20158% increase in thse segments…

Agency Temps -- 1.3% Temps – 6.2% (BLS noted 38% growth 2009 – 2012)

On-Call – 3.5%

Contract Company Workers – 3% Contract W-2 – 3.6%

Independent Contractors – 12.9% Independent Contractors – 15.5%

Self-employed – 3.3%

Standard part-time workers – 16.2%

The New Workforce of 2020 and Beyond• “…workers can either be independent contractors or employees: The latter option gives the firms full

control over all relevant decisions but carries a 25% to 40% cost increase.” Harvard Business Review Article - August 21, 2015

• Currently about 20-30% of the workforce in Fortune 100 companies is made up of “contingent” workers; that percentage is expected to swell to 50% by 2020 Forbes article, April 2012

• The size of the contingent workforce continues to grow, accounting for nearly 38 percent of all workers in 2016, up from nearly 35 percent in 2015 and about 29 percent in 2011 -- Ardent Partners Report

• Nearly 40 Percent of U.S. Workers Prefer Gig Work – SHRM Article, Sept 26, 2016 by Roy Maurer

• Nearly 38% of the world’s total workforce is now considered “non-employee,” which includes contingent/contract workers, temporary staff, gig workers, freelancers, professional services, and independent contractors. This is an increase of nearly 10% over last year (and nearly 30% increase in utilization of this type of talent over the last five years) – CPO Rising, State of the Contingent Workforce

• The Future of Work: It’s Already Here -- Forbes article, Sept 21, 2016 by Josh Bersin• The structure of organizations is under attack, changing the nature of work in companies. 92% of CHROs and CEOs tell us

they believe their structure must change, and most are looking at ways to flatten the hierarchy, make jobs more dynamic, and further leverage contingent and contract labor.

• The essence of the shift is a simple but big idea: the idea of a "job," with all its protected artifacts like job title, level, and job description, is starting to go away. What is its replacement? People being hired to "do work," get a project done, lead a team, and be ready to move on as the business needs change.

Managing the Blended Workforce 2020

HR

Managing the Blended Workforce 2020

Who’s Managing?

Talent Management

Co-Employment

Hiring Manager

Managing the Blended Workforce 2020

How’s the Alternative Workforce Managed?

• Internally by Procurement, Accounts Payable, Legal (Contract Management), Recruiting…

• Externally by Agencies, Vendors, PEO’s, Consulting Firms, Outsource Firms…

• Through Systems:• Contract Management• Workforce Management• Talent Acquisition (Vendor Portal)• Project Management• Accounts Payable• HRMS

• Centralized through:

• Vendor Management System• Managed Services Provider

• Disparate measures employees versus contingent workers

• Lack of accountability for end-to-end management

• Hidden cost of contingent labor

• Avoiding co-employment issues

• Regulatory compliance (i.e., required training)

• No system or central source of information on contingent workforce, though there are options…

Managing the Blended Workforce

Managing the Blended Workforce 2020

CHALLENGES

OPPORTUNITIES• Total workforce insight – Blended Workforce Analysis

• Costs

• Performance

• Unified management towards business goals

• Cross functional alignment on workforce strategies/plans

What’s VMS? What’s MSP?Vendor Management System (VMS)

Web-Based Software Solution:

• Track Vendor Contract Terms

• Procure Staffing Services (agency, outside contract, or contingent labor)

• Order Distribution

• Consolidated Time Management

• Consolidated Invoicing

• Consolidated Payment

• Consolidated Reporting (including utilization analysis and vendor performance metrics)

Managing the Blended Workforce 2020

Managed Services Provider (MSP)

BPO for Contingent Workforce

• Vendor Management & Oversight on Recruiting

• Pre-hire checks and clearance

• On/Off Boarding

• Monitor Vendor Performance

• Manage Time/Approval Process

• Remote Monitoring & Management

• Build and Customize Reports

Core traditional platforms such as Vendor Management Systems (VMS) and Managed Service Provider (MSP) networks provide a "centralized source of truth" to control and manage all forms of non-employee talent. Overall, 72 percent of organizations believe such an ecosystem effectively addresses talent, spend, supplier and quality aspects of non-employee workforce management. -- Ardent Partners/SAP Fieldglass

• Strategy

• Policy

• Workforce Analytics

• Workforce Planning

• Talent Management?

• Sourcing

• Vendor Relations

• Workforce Management

• Accounts Payable

• Cost Analysis

Contingent Workforce

Human Resources Role Procurement /MSP Role

Managing the Blended Workforce 2020

Best-in-Class CWM companies deploy a variety of strategies to outpace the general market.Best-in-Class companies excel in real-time visibility into spend- and supplier-led aspects of CWM (68 percent vs. 25 percent for all others), conduct regular reviews of worker and enterprise relationships (74 percent vs. 49 percent), leverage VMS platforms (72 percent vs. 46 percent), and maintain comprehensive onboarding and offboarding processes (79 percent vs. 55 percent). –Ardent Partners

Sierra-Cedar, 17th Annual HR Systems Survey Findings

Contingent Workforce DetailsQuestions: Stacey.Harris@Sierra-Cedar.com

12www.domain.com

Contingent

Workforces

84% of organizations have a contingent

workforce

Contingent workers are 20% of the average

company’s workforce

Types of contingent workforces:

Independent contractors – self employed, 1099’s, legal limitations

Temporary workers – employed by temporary service agencies

On-call workers – report to work when needed

Contracted employment – on location, but employed by a third party

Short-term contractors – agreed upon short term contracts

n = 854 (excluding staffing agencies with 100% contingent workforces)

43%

25%

32%

Contingent Workforce Management Tools

Primarily HRMS

Combo HRMS/Other Tools

Non-HRMS Tools

13

Beyond the HRMS,Other Systems Managing Contingent Workforces

*Chart does not equal100% as

organizations have multiple solutions in

use

43%

25%

32%

Systems Currently Used to Manage Contingent

Workforces

Primarily HRMS

Combo HRMS/Other Tools

Non-HRMS Tools

32%

33%

53%

Stand-Alone, C-WFM

Outsourced

Procurement/VMS System

Other than the HRMS, What Systems are Used to Manage

Contingent Workforces

14

Financial

ServicesHealthcare Manufacturing

Other

Services

Retail/

Warehousing

Procurement/

VM System53% 66% 32% 50% 46%

Outsourced

Solution35% 22% 50% 45% 29%

Stand-alone C-WFM System 35% 28% 41% 25% 33%

Beyond the HRMSOther Systems Managing Contingent Workforces by Industry

*Chart does not equal 100% as organizations have multiple solutions in use

Only Industries with large enough sample sizes were shared

15

Visit Sierra-Cedar Website Get Full Survey Details and Sign Up To Participate Next Year!

www.Sierra-Cedar.com/annual-survey

Reporting the Full Workforce

HRMS - VMS Blended Solutions

EmployeesContingent

Workforce

Employees

Agency Temps

Contractors

Total Workforce

Decentralized Workers

Out-source

Managing the Blended Workforce 2020

• Isolated Systems• Scattered Measures• Dispersed Processes

• Aligned System Configuration• Standardized Measures• Processes Integrated &

Automated

• Full Talent Management• Entire Workforce

Analytics• Unified Process

Management

BUSINESS CASE TO EXECUTIVE MANAGEMENT

15%Cost reduction when

centralizing contingent worker management

with VMS/MSP

Aberdeen Research 2014 90% of CEO’sPerceive contract talent as a significant or critical component of how they conduct business

Ardent Partners 2013

Information on the full

workforce, including

contract labor can help

executives plan, budget

and forecast for the future.”

Managing the Blended Workforce 2020

HR’s Next Steps:

1. Read “The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization” - Jacob Morgan

2. Consolidate contingent workers under one MSP –collaborate with Procurement

3. Implement a VMS – collaborate with IT

4. Align your employee and contingent processes (e.g., on-boarding)

5. Find or build the workforce strategy

6. Create total workforce analytics

7. Seat at the table – workforce planning

Continue the discussion…

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Managing the Blended Workforce 2020