June 2013
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TD Magazine

The Growing Contingent Workforce

Saturday, June 8, 2013

Organizations increasingly are using temporary workers, which yields both benefits and challenges.

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Intelligence1
The past two decades have rung in a more transient, self-reliant workforce. In its report The Rise of the Extended Workforce, Accenture found that 20 percent to 33 percent of U.S. workers are freelancers, temporary workers, and independent contractors. Up from 6 percent in 1989, this number is expected to continue to rise. In fact, temporary and contract labor is one of the fastest growing line items on corporate operating statements.

The benefits of contracting labor are quickly reaped: Companies can match highly skilled, high-performing talent to certain tasks or projects; scale their staff up and down as needed; change the mix of available skills; reduce their time to market; and increase organizational agility. Companies also can try out new hires on a temporary basis before hiring them on as permanent employees.

As organizations increase their reliance on temporary workers, new challenges arise for their talent management functions. "Boundaries between extended workers and permanent employees have started to blur and likely will continue to do so," says David Gartside, global lead for Accenture's talent and organization practice.

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According to Gartside, "HR will need to integrate talent management processes used for permanent employees with talent management processes used for contingent workers. ... [A] more difficult barrier is that different functions in an organization tend to support contingent workers (typically procurement) compared to permanent employees (typically HR). Organizations will need to better integrate the management of all types of workers."

Another challenge embedded in the shift to a project-based approach to employment and talent management is the loss of tenure, as well as the historical knowledge that permanent, long-term employees bring to their organizations.

Knowledge management practices are important to combat this disadvantage: "When using a contingent workforce," says Gartside, "[organizations] should do two things: first, consider using a prescreened pool of extended workers who already know the company (such as retirees or former employees); and second, capture the knowledge of extended workers before they leave."

About the Author

Stephanie Castellano is a former writer/editor for the Association for Talent Development (ATD). She is now a freelance writer based in Alexandria, Virginia.

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