Harnessing data on your workforce’s demographics, skill levels, and costs will help you better understand labor supply and help with future workforce planning says Neha Goel, Vice President of Marketing at Utmost. She shares how using this data will allow you to know if you already have the internal talent for an open position and what gaps exist.
Contractor or employee? Outsourced consultant or temporary worker? The job of procuring talent these days is increasingly complex, with so many different categories of workers and navigating many channels to find this talent.
On top of having to make predictive decisions, Talent Acquisition and Talent Procurement teams must also navigate the rules and regulations of non-employees. Determining contractor classification and the cost of non-compliance is a slippery slope that no talent sourcer should have to take on.
Adding to this is that most hiring managers prioritize their day-to-day job responsibilities over talent sourcing. Their main concern is whether a candidate can fit into the company budget and carry out the functions required for the job.
With all these different teams have on their plates, a talent procurement system should make workforce planning and sourcing easier.
Knowing the Supply and Demand for Labor
To plan your talent sourcing means understanding your existing workforce data. Harnessing data on your workforce’s demographics, skill levels, and costs will help you better understand labor supply and help with future workforce planning. This will allow you to know if you already have the internal talent for an open position and what gaps exist.
You must also be aware of the demand for labor. For example, a business unit could organize operations around existing project backlog and pipeline if they are more project-based. More product-focused businesses, like manufacturing, have different strategic initiatives. These businesses tend to use contractors more regularly than other businesses as they grow and shrink based on demand. Companies must understand how many workers are in reserve, determine how many workers are needed for each job, constantly check for potential gaps or bottlenecks, and execute plans to remove them.
Mapping the supply and demand for different types of labor will help your organization better project future needs.
The Impact of Labor Compliance
Even when companies execute plans for worker demand, regulations make external gaps much harder to fill. Worker classification legislation is constantly changing (i.e., IR35 in the U.K. and AB5 in California), and procurement teams must continuously ensure they are in compliance.
Failure to comply with these rules can lead to catastrophic results for the company. Companies are at risk for not only settlements, as non-compliance can lead to back taxes, fines and more.
It is up to the individual companies to study and be vigilant about these new developments. Ideally, in the future of employee classification, these changes would reflect in automated systems that would prevent employee misclassification and lessen the risk for companies.
Once combined with labor supply, demand and regulations, you can begin to map out which functions of your workforce need to be hired as employees and which parts can be outsourced to external providers. The workforce data provides the underlying foundation, but the regulations determine how you need to classify workers correctly. Knowing both will profoundly impact the total workforce costs, worker classifications and ultimately the worker headcount that you need.
Full visibility into your workforce is essential for the strategic planning of talent sourcing. By understanding supply, labor demand, identifying gaps and working to fill those gaps, companies can adequately plan for all types of workers coming into the organization.