How to Address Your Workforce Transformation Strategy Challenges
Managing work and the workforce is a core business issue. Every person in the organization experiences challenges related to the workforce transformation strategy, whether controlling costs, achieving outcomes or simply determining who is needed for the work to be done and how to find them.
The Universal Workforce ModelTM addresses two types of workforce transformation strategy problems shared by nearly every company today:
- Strategic challenges in determining how to secure resources at the right time and cost through permanent and extended workforce options
- Tactical challenges associated with skills shortages, demand for better use of data, evolving worker priorities and achieving higher standards for diversity, equity and inclusion
These challenges influence the success of the organization and of the individuals who struggle with everyday work demands. What follows is a closer look at the strategic challenges in the workplace and how the Universal Workforce Model addresses them.
Strategic Workforce Challenges
Organizations work in competitive marketplaces, and they must leverage people to get work done in an environment of increasingly urgent and variable demands. Unfortunately, the traditional recruitment and extended workforce (nonemployees) management models do not provide the agility to stay ahead of demand. Four strategic problems stand in the way:
- Fragmented sourcing
- The impossible ask of talent acquisition
- The recruitment process outsourcing (RPO) paradox and the conflict of expectations and delivery
- The extended workforce paradox and the flight of spend to unmanaged areas of work
Challenge 1: Fragmented Sourcing
When organizations consider how they will secure the workers or resources they need, they almost always start with a predetermined notion of the type of worker they seek. A business leader, for example, will usually begin the sourcing effort by saying, “I want a contractor” to work on a specific job, “I need a consultant” to support our new initiative, or “We need to hire an employee” to fill a recent vacancy. In effect, they have predetermined the resource need.
This predetermined need triggers a process that only considers one workforce transformation strategy, which then leads to a sourcing effort to secure a contractor, a consultant or an employee. In effect, the organization restricts the recruiting strategy to a fraction of the workforce, operating through the siloed functions of talent acquisition (for permanent employee hires) or procurement (for engaging contractors or services). At the same time, it excludes hybrid or blended options and misses the opportunity to consider options for automation.
Our Take: The Universal Workforce Model bridges the employee versus extended workforce siloes by removing hiring questions from the initial work discussion entirely. Instead, the process starts with the question, “What are we trying to achieve?” naturally followed by, “What are the various ways in which the work can get done?” This approach lends itself to an open choice of permanent or extended workforce options, as it focuses on needed skills and capabilities rather than predetermined job roles.
Likewise, the Intelligent Workforce Platform – a key feature in the Universal Workforce Model – enables visibility across employee and extended workforce channels. As a result, sourcing decisions are no longer based on fragmented views of the workforce. This level of visibility was the original promise of total talent strategies.
Challenge 2: The Impossible Ask of Talent Acquisition
Talent acquisition models have long struggled to give organizations the fluidity and agility they crave. In particular, in-house teams are crippled by factors outside of their control, such as fluctuations in resources and demand over time, resulting in slow delivery of talent and an impact on quality. Technology innovation offers promise in addressing these issues, but the practical challenges of implementing available technologies create potential barriers to progress.
What’s standing in the way of a more agile talent acquisition model? Consider the differences in hiring needs and recruiting channels for each skill, role and location covered by an organization. Talent acquisition may have to cover dozens or even hundreds of skills across multiple fields, each requiring specialized knowledge and networks to find and engage the right talent.
At the same time, the organization must have the technology infrastructure to make the engagement experience easy and transparent for prospective candidates. That same technology infrastructure must also support the recruiters and talent decision-makers. Challenges include the use of data and visibility into the workforce, recruitment marketing, interviewing, selection and assessment, and candidate care, to name a few.
Even if an organization has the budget and resources to field a talent technology ecosystem to support a fully competitive talent acquisition function, doing so takes time to develop. In many cases, recruiting staff and supporting technology infrastructure reflect years of evolution. And yet, new talent demands can arise overnight, with an expectation that they will be addressed rapidly.
Traditionally, companies had two choices: make do with overstretched internal teams and technology or leverage an external talent partner with the resources to keep up. Unfortunately, future conditions may leave internal teams unable to compete for desired talent in the face of an extreme and lasting worker shortage. Likewise, external partnerships provide great value but also have their own challenges that can emerge over time.
Our Take: The Universal Workforce Model reduces the burden on internal talent acquisition in several ways.
- First, it finds the easiest path to the right skills and capabilities before talent acquisition even needs to act – no searching for non-existent or costly resources due to a lack of foresight.
- Second, the Model introduces a new role in the form of a Workforce Business Partner. This recognizes the investment needed by an organization to allow the function to match its strategic importance, considering that talent is the number one issue for CEOs worldwide.
- Third, the Model draws from the entire talent supply, regardless of work style or channel, as well as the right technology to support the effort through the Intelligent Workforce Platform.
Challenge 3: The Recruitment Process Outsourcing (RPO) Paradox
Most organizations have become familiar with in-house talent acquisition teams becoming isolated, starved of technology investment and under-resourced. To solve the issue, RPO partners bring in the expertise, resources and flexibility to balance the equation. RPO providers also carry the promise of innovation and continuous improvement in processes and technology.
Unfortunately, RPO relationships are often set up in a way that limits the value a provider delivers. While companies seek an RPO provider’s expertise, technical innovation and flexibility, companies often impede a provider’s success by insisting on owning the data and process end to end. As a result, the tech stack is positioned inside their firewall. This means every proposed piece of technology must be vetted and compete for internal resources to implement in the ecosystem, which restricts the success of the RPO model.
Similarly, the hundreds of resources employed in RPO service centers are notoriously difficult to switch accounts to meet demand fluctuations, as they are often committed to the service of one client. As a result, the model successfully provides resources but fails to set up the organization for future performance.
The technology and resource limitations of the RPO arrangement are the biggest cause of the shortfall. So, when an organization sets out to engage an RPO provider to solve its long-standing challenges, it experiences some improvement in results at the outset, but it often misses out on the long-term innovation and agility it seeks due to those long-standing challenges. These challenges arise precisely because of the way the RPO provider was set up in the first place – expecting long-term improvement while remaining under the limitations of the client’s systems and processes. This is the RPO paradox.
Our Take: The Universal Workforce Model breaks through this paradox by bringing a technology ecosystem and related processes to bear through one point of integration with the client. The talent acquisition relationship leverages the specialized partner’s full technological capabilities and best practices. As a result, the company maximizes its recruiting power and changes at the speed of innovation without the barriers of internal processes and integrations.
Challenge 4: The Extended Workforce Paradox
Fluctuations in workforce supply and demand are not limited to employee recruitment. Those variabilities make it difficult for the procurement function to maintain visibility into the extended workforce. As a result, while procurement typically manages the nonemployee workforce to ensure cost discipline, many organizations see an increase in overall costs. Why? The non-permanent workforce sits broadly in two categories:
- Contingent/Temporary Workers: These workers are engaged under time-and-materials charging arrangements, and their work is managed on a day-to-day basis by the client organization. This population is often under a managed service provider (MSP) arrangement that offers highly visible, structured data with a clear line of sight to pay rates, time worked and supplier margins.
- Consultant/SOW Workforce: These resources could be engaged under milestone or time-and-materials charging arrangements, with the workforce managed to some extent by a third party (e.g., a consultancy) that takes an element of responsibility and risk for the service delivery. This population is typically engaged under statements of work (SOWs) negotiated by procurement. However, due to the nature of SOWs, the data is opaque, unstructured and characterized by higher margins.
The extended workforce paradox is defined by the reality that it is easier to reduce costs by focusing on the contingent worker category. This is accomplished by bringing the many disconnected paths of engagement – whether different managers each driving their own staffing firm relationships or different departments defining and paying for work through distinct channels – under one common, consistent management process. That process is often owned and executed by an external MSP partner. The resulting structure improves data visibility, governance and cost control. This approach helps identify and rationalize cost inconsistencies by bringing discipline to pricing and the use of suppliers across the extended workforce supply chain.
Our Take: The Universal Workforce Model stops this flight of spend to undisciplined channels by covering all resource types under one framework. Employee recruitment, contingent workers and services are engaged through a common approach that boosts access to resources, cost control and compliance across the business.
How Can You Solve Strategic Workforce Challenges?
We hope this article outlines how the Universal Workforce Model can help you navigate strategic challenges in determining secure resources through permanent and extended workforce options. Download the Universal Workforce Model book to learn more about workforce transformation strategies and ways to rethink how work gets done.
**Editor’s Note: This article was originally published in “The Universal Workforce Model: An Outcome First Guide to Getting Work Done.”