Where Lies the Tipping Point for Hiring Contingent IT Workers? | DCR Workforce Blog

Where Lies the Tipping Point for Hiring Contingent IT Workers?

Though this be madness, yet there is method in ’t. – Shakespeare

WorkersIn the course of our daily dealings with the world, that is all we strive for – to see that there is some method in the madness we are going through. Determining workforce size and composition is always one such challenge, where we are almost always unsure but keep striving to balance our endeavors.

Most IT project managers will agree with me when I say that their need for workforce agility to meet the pressures of project deadlines keeps them walking the tight rope – not knowing if they will be able to retain their balance. Far too often, a time comes when the project threatens to lose momentum and everyone scrambles to augment the resources, afraid to miss the project deliverables and deadlines. Many have come to depend heavily upon contingent workers to meet these last minute pressures. Some have found that they ended up spending much more than their initial budget projections to address this last minute change in course, and regretted the shortsightedness which led to this reckless overrun of cost estimates.

The use of contingent workers is growing.  Most estimates indicate that 20-25% of all workers are engaged in temporary assignments.  With the increasing pervasiveness of temp labor, companies must recognize that these resources are strategic assets.  They collectively represent significant corporate expenditures, and should be planned, budgeted and managed as any other asset. Yet, for all of the discussion about “total talent management”, few companies are prepared to do this.

Most large organizations have taken preliminary steps, establishing contingent workforce management programs to centralize the procurement and use of agency contractors.  Many have enhanced these program, also addressing the use of independent contractors or spend on SOW-based projects.  Only a few pioneers are proactively including all labor – permanent and contingent – in their annual planning and budgeting initiatives.

In the absence of this comprehensive planning, can line managers anticipate the need to outside assistance, and plan for it as part of their specifications for upcoming projects and initiatives? After all, early planning can secure the right personnel at market-driven rates and money saved is money earned and can be used for further investment in more initiatives and business activities.

It is important for any business to evaluate and ascertain the capabilities of its workforce, before planning for any additional hiring. Consider that the tipping point is at hand when all the following parameters are met.

  • Future work requires skills which are not available from any of the existing staff. Acquiring the requisite skills will involve effort and time, which in turn could affect the achievement of business goals.
  • The requirement is not of a permanent nature and paying an hourly rate or a fixed fee to a temporary worker for accomplishing the specific tasks on the project would prove cost-effective.
  • All stakeholders are in agreement about the need for additional resources. The types and volumes of resources have been identified, and budget has been allocated.
  • The business has access to talent pipelines of qualified contract workers, available at fair market prices.
  • The business has the systems and processes in place to ensure compliance with the use of contingent workers – to avoid co-employment risks, misclassification charges, and violations of corporate policies.
  • The business has put in place structures to manage and administer contingent workers and their supply base.

In most large organizations, the complexities associated with effectively managing contingent labor and outsourced projects can only be addressed through the use of technology.  Vendor Management Systems streamline processes, automate work steps, eliminate errors and violations, control costs, and provide an enterprise-wide view of the management of the contingent workforce.  The leading vendor management systems, like DCR’s Smart Track, go beyond transactional support to facilitate true workforce planning by recognizing trends, benchmarking by overlaying market data with client transactional history, and offering guidance on the optimal worker type, sourcing means, and rates for and required positions.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.