Is the global economy getting better, or is it in trouble, again? The World Bank seems cautious, but then they probably don’t want to spark off any fears that could trigger a fall – so delicate is the situation. Oil and commodity prices remain concerning, China’s stabilizing economy is putting downward pressure on other global markets, and we might even see the EU start to break up this year. It’s all rather uncertain.
With such uncertainty abound, it’s no surprise that we’re seeing a stark rise in the amount of employers who are increasing their contingent workforce, usually at the expense of permanent positions. After all, permanent employees aren’t just terribly expensive and messy to part company with when times get tough, layoffs now damage an employer’s reputation and employer brand more than ever. Thank you, social media.
Would you apply to work for a company who was in the news last week for axing 2,000 loyal and long serving employers? Exactly.
In the past twelve months, Singapore has seen its fair share of high profile layoffs, especially in the finance and tech sectors. The Singapore Ministry of Manpower has reported that layoffs in Singapore have increased steadily since 2011, with the 14,400 layoffs recorded in 2015 being the highest in past five years.
Turning to contingency workers has always been a quick and effective way to fill those organisational skills gaps that crop up but can’t be easily filled by existing employees. But that’s not what we’re talking about here, we’re also talking about employers turning to contingency workers in order to mitigate risk and remain agile.
In Singapore this global trend of increasing contingent work forces was recently observed in the 2015 Hays Asia Salary Guide. The report pointed to a year-on-year increase in the number of employers reporting to use contract or temporary staff, on a regular and ongoing basis, from 24 to 26 percent. For special project work this percentage was much higher, at 43 percent. The survey also showed that one in five employers planned to increase their usage of temporary or contract workers in 2016.
Whether you feel that this shift is a cruel and evil by-product of the uncertain world we find ourselves in, driven by overly cautious and self-serving workforce planning mandates, or an exciting time of freedom and entrepreneurialism, probably depends on where you sit, your age and situation, and the relevancy and value of your skill set in today’s rapidly changing labour market.
Accenture recently estimated that in the US contingent workers now make up between 20 and 33 percent of the total workforce. On this current trajectory it won’t be long until contingent workers outnumber their permanent peers. And Singapore looks set to follow suit. Industries that seem most affected include retail, financial services, healthcare, professional services, and public sector agencies – so this is certainly not a problem solely affecting blue collar workers.
Whether they like or loath it, employers are starting to face the fact that increasing their contingent workforce is starting to look more and more like an undeniable reality of modern times. So for anybody working as a human resources, talent, or recruitment professional, who is measured on their ability to attract and retain their industry’s top talent, things are going to have to change.
Conversely, though, if the war for talent has ended, it’s ended because talent won. So wouldn’t offering this scarce talent something more permanent, to keep them as locked-down and happy as possible, make more sense? Despite this economically driven shift towards contingency work forces, every measure and every trend is showing that the need for certain skills is growing faster than people are gaining those skills. Scarily, there are no statistics that show today’s skill shortage getting better in the future, just worse.
For this increasing proportion of the workforce, is it somehow less important how talented they are, or how much of an impact their contribution has on their employer’s business? Absolutely not! If anything, with less being invested in their training, development, and induction, they’re expected to come in and do big things from the get-go. Businesses can’t afford to hire mediocre contingent workers; they need to be very talented indeed.
This is a conundrum, as much of what’s offered to permanent workers, such as health benefits, training and development, and guaranteed future employment, isn’t on offer to their more nomadic peers. How on earth do these people get a mortgage? Therefore, attraction and retention, albeit for shorter or defined periods, needs to be more innovative, and can’t rely as much on traditional comp & ben strategies, which now apply a lot less, if at all.
For many companies a solid employer brand could be their strongest weapon in the war for contingent talent. Having a coveted and discernible employer value proposition (EVP), especially one that’s not too reliant on extrinsic factors, will become, in my opinion, critical to future business success in tomorrow’s labour market.
We don’t live in an age where slow or complacent organisations fare too well. For those who genuinely believe that talent is a business-critical factor for success, now is absolutely the right time to create and activate the inevitable CVP, or contingent value proposition.
Brands, after all, are something we experience, something that resonate with us and something that we swear allegiance to, once we’ve bought-in. Yet the experience of a permanent and contingent worker at the same organisation are certainly not the same, the brand is different to each of them.
In an age where organisations will have 20, 30, or even more than 50 percent of their workforce experience a different brand of employment, there needs to be a clear, attractive, sustainable, and unique value proposition for both sets of workers. Of course, core values must be ever present, but that still leaves a lot of room to play with and a lot of scope to do more to attract both groups.
My prediction for the future of the global talent market is that those who distinguish between their EVP and CVP will flourish, and that those who don’t will fall behind.