Workforce.com March 8 2011 06:15:00 AM
To limit contingent staffing, some companies are making permanent employees more agile.
Staffing flexibility has a new look these days. You might call it a vintage approach to workforce planning.
In recent years, companies have sought greater labor force agility largely by paring back their payrolls and tapping temporary workers or independent contractors when needed. Now, some employers are exploring ways to make traditional full-time and part-time employees fit more flexible workforce strategies. Given people’s desire for more stable employment and the potential drawbacks of hiring contingent workers, organizations as diverse as Hilton Worldwide and Eden Medical Center in the San Francisco area are bucking the trend to ramp up the number of temporary hires.
Hilton, for example, coordinates its staffing on a regional basis, sending full-time employees from one hotel to another nearby hotel to address temporary spikes in demand. This strategy not only makes efficient use of the hotel chain’s staff but also helps develop an agile workforce, says Jim MacDonald, Hilton’s vice president of human resources for the Americas. The employee-swapping approach “allows us to invest more in full-time team members that have a wide range of specialties,” MacDonald says. “Our ultimate goal is to have as many full-time team members as possible.”
To be sure, contingent labor arrangements are growing. Between September 2009 and December 2010, the number of temporary help jobs increased by 495,000, or 29 percent, according to a preliminary government estimate.
Turning to temporary workers is typical during economic recoveries, but some workplace experts are raising questions about the move to a “just-in-time” labor model. Among the concerns are: lack of commitment to the employer, steep wage markups for some temporary jobs, uncertain qualifications of contingent workers and the risk of misclassifying workers as independent contractors, a problem the Obama administration has been targeting.
Rather than rely on contingent workers, Peter Cappelli, management professor at the University of Pennsylvania’s Wharton School, says companies can remain agile through job-sharing, redeployment of workers to different parts of the business and temporary furloughs. “Most U.S. companies have way overdone their use of contingent labor,” Cappelli says. “They haven’t thought through the alternatives of being internally flexible.”
The HR consulting firm Mercer expects more of its clients to develop innovative staffing models. “More creative, flexible work arrangements are going to be the future,” says Andy Geller, a partner in Mercer’s Human Capital practice. For example, one of Mercer’s financial services clients is exploring a novel staffing approach to deal with blips in demand in the mortgage business. The company faces cyclical swings, such as higher processing volume in the summer, as well as unpredictable manpower needs, such as during a surge in home buying when interest rates drop.
In the past, Geller says, these challenges led to significant overtime demands for full-time employees even as the company tried to tap temporary agency workers.