Temporary Is The New Permanent: Are You Ready?

While the effects of the protracted recession on staffing are irrefutable—most organizations have increasingly turned to using temporary workers to meet changing staffing needs—the trend will likely continue long after the post-recession era. New research on the use and management of contingent workers from the Institute for Corporate Productivity (i4cp) shows that using contingent workers strategically is something few organizations have mastered.

The survey found that higher-performing organizations are much more likely to use contingent workers in operations, tech, and support functions and increasingly, highly skilled functions such as engineering and legal and financial areas and use these workers for much longer durations. Their lower-performing counterparts are much more likely to use contingent works in managerial functions. Why are these important distinctions?

"Because lower-performing organizations are making a mistake in using contingent workers in managerial functions. Managers truly understand the culture and are the primary conduits for strategy and culture, so the ramifications are significant," says John Gibbons, Vice President and General Manager of Research at i4cp.

In fact, nearly one-sixth of low-performing companies use contingent workers in managerial functions—about twice as much as higher performers. However, it's also possible that some organizations are bringing in temporary managers to provide short-term leadership and drive change in stagnant or ineffective workplaces. But the stakeholders are many and ownership of contingent workers is spread across organizations and centralization of tracking is rare.

Though the realized cost savings in terms of salary, benefits and taxes are undeniable, companies need to consider the long-term cultural and risk management implications of how they use, manage and track contingent workers. Factors including engagement, productivity, and concerns about misclassification also come into play, and while the short-range benefits may be net-positive, this may not hold true in the long run.

Regardless, i4cp research suggests a new workforce reality: that the use of temporary workers is here to stay, and that they play a key role in the economic recovery. Even as the economy recovers it's clear that those numbers are continuing to increase—the Bureau of Labor Statistics reported that 2.2 million U.S. workers were employed temporarily in November 2010, up from 1.7 million in September 2009.

As businesses look to become more agile and, of course, more profitable, they need to focus on determining how contingent workers can be efficiently managed and leveraged as strategic assets beyond a cost-savings fix.

The new report by i4cp explores these issues more thoroughly and provides a valuable benchmark to companies looking to assess how they're taking advantage of temporary workers.

Thanks to Erik Samdahl, The Institute for Corporate Productivity (i4cp) / AMA—American Management Association