In my previous post, I talked about what kinds of contingent workforce-related risk a company might encounter these days. Once you’ve identified that risk, how do you build a plan to manage it?
Obviously there are a lot of variables in any individual company’s strategy, but in general I recommend a four-step plan.
Step 1: Understand that the risk categories are, in many ways, interrelated. For example, in many instances where a company has implemented “background checks” to address security concerns, the company ends up exacerbating employee misclassification/co-employment risk because of the manner in which the background checks are completed and monitored.
Step 2: Accept that there are no easy approaches. Each category has numerous components and addressing them sufficiently will be a complex undertaking. For example, many companies will say they have already eliminated the risk of employee misclassification/co-employment by implementing a tenure policy for contingent workers.
Yet what they learn when they find themselves on the defensive end of an employee misclassification/co-employment legal action is that “tenure limitations” serve only to put parameters around the size of the liability the company will incur. Tenure limitations do nothing to eliminate the potential for liability.
Mitigation of employee misclassification/co-employment risk occurs only when a company has addressed all of the key factors related to this category, the most important of which is control of workers, not tenure.
Step 3. Engage all key stakeholders early in the strategy development phase, as well as during implementation. The team should include representatives from these departments:
• Human Resources
• Procurement
• Finance
• Legal
• Security
• Compliance
• and last but certainly not least, representatives of the user community
Step 4. Acquire the specialized CWM knowledge you need. You can do this either by engaging a subject matter expert (SME) or by investing the time and energy to learn the discipline yourself. But beware “the expert.”
Many companies have created costly problems by believing the claims of people or organizations that promote themselves as CWM experts. In fact, they’re experts in other fields, such as contingent staffing, VMS software development, procurement or HR. They may have a different agenda and they most likely don’t have the expertise you need.
In future posts I’ll tell you how to source this kind of expertise, and give you a list of questions you can use to determine who’s actually a subject matter expert in this area, and who’s a wolf in sheep’s clothing.
Of course, strategy development is only the first component. The implementation of your CW risk mitigation strategy brings its own challenges, and if you think those are “fun,” wait until you have to deal with the management and oversight aspects of CWM programs. I’ll cover those, too, at a later date.
In the meantime, please let me know if you have questions or concerns in this area; we’ll include them in future posts.
--Elaine
Elaine Taylor is a subject matter expert in the area of contingent workforce management (CWM). She consults with Fortune 500 companies to help them develop CWM strategies that effectively reduce the cost of their temporary labor resources (by as much as 22%), while minimizing “employee misclassification” risk and introducing business process best practices. She has published broadly in the area of CWM, including co-authoring HR.com’s Vendor Management System Buyer’s Guide. Former and current clients include Charles Schwab & Co., Inc., Entergy Corporation, American Family Insurance, Ryder Transportation & Logistics, Northrop Grumman and Sutter Health.
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