Strategies for a more reliable contingent workforce

Reliability in the workforce is one of the greatest challenges companies face in today’s world. The cost of employee turnover is significant, so businesses are always looking for ways to overcome this unnecessary expense. Companies can often reduce turnover by implementing key changes in how they hire, onboard and manage a temporary workforce, says Andrew Deutsch, ARM, Executive Vice President, Commercial Division, at Nesco Resource.

Smart Business spoke with Deutsch about how this approach can help you create a safer, more efficient work environment.

Is pay the best way to reduce turnover?

Ensuring pay rates are competitive is definitely a factor, but it’s not the only way to reduce turnover for contingent workers. According to an American Staffing Association survey, nearly 50 percent of contract workers said that their assignments were a means to a permanent position, 28 percent were looking for work experience and 24 percent were looking to improve skills. Understanding that the temporary workforce operates in tandem with the motivations of the workforce as a whole is an important first step in reducing turnover.

What are some keys to retaining temporary workers for a longer period of time?

Reducing turnover starts on day one with temporary workers. A personal greeting at the point of arrival sets the tone for the entire working relationship. A short orientation can be part of this greeting and should include, a tour of the facility and essentials such as the rest rooms, break rooms and/or cafeteria; an introduction to supervisors and co-workers; an outline of what type of work they’ll be doing; and any required safety information. You should also leave time for questions.

This is an essential time to convey information on company policies, culture, safety protocols and more. Even if this information is covered elsewhere in the process, it is a chance to ensure that temporary workers have everything they need to do their jobs efficiently and safely.

What are other common turnover pitfalls in how companies approach temporary workers?

Don’t leave temporary workers out. Team-building activities — birthday parties, regular staffing meetings, after-work gatherings — often leave out temporary workers. Inclusion at a very basic level can help them feel like part of the team. Even items like uniforms, T-shirts, hats and bags can help a temporary worker feel like part of the company.

It is also important to prep other workers upon the arrival of temporary employees. Explaining that they are part of the team and part of an overall growth strategy for the company can help set the tone for how these individuals are treated by the rest of the workforce.

Research has shown that two weeks is a make-or-break time for employee turnover. Employees that make it past the two-week mark have a sudden and significant drop in turnover rates. When you introduce incentive programs such as a bonus given after two weeks of work, the overall turnover rate drops by almost half. More significantly, that favorable turnover rate continues no matter how long the workers are assigned to that employer.

Is there any one thing companies can do to reduce turnover for a contingent workforce?

Often the difference between high turnover and low turnover is a conversation about what works. According to an American Staffing Association study, more than four out of 10 workers value schedule flexibility most in their current jobs — even more than pay and wage potential. By simply discussing the way that hours are structured, longer term relationships can be fostered that can help reduce turnover.

Attitude is key. If you view these key contributors as disposable, that is a pathway to high turnover. In the end, temporary employees are misnamed. Recent industry studies advocate using terms like contract workers or contractors; eliminating the ‘temp’ label altogether can make a difference. They are a part of many companies’ permanent growth strategy. Reducing turnover in this segment can be a way to trim expenses and add to the bottom line without expanding budgets.

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Opportunities for safe working environments through contingent labor

Addressing safety for contingent workers is an opportunity to address safety within an entire operation, says Tom Quail, Vice President of Risk Management and Corporate Counsel at Nesco Resource. While contingent workers are often less familiar with a work environment and its processes, their need for initial training in safety protocols and reinforcement of that training can improve safety for everyone in that operation.

“Companies have a responsibility for the training of their temporary workers,” Quail says. “But this obligation is also an opportunity to create a safer working environment overall.”

Smart Business spoke with Quail about the steps companies can take to create a safer place to work for contingent staffing employees.

What factors are creating an unsafe work environment for contingent staffing workers?

One example is when a company expands the worker’s responsibilities beyond what that person is comfortable doing. Since he or she does not view this company as a direct employer, the person may be less comfortable raising safety concerns or expressing unease about the task that needs to be done.

The company and contingent staffing provider need to understand each other’s roles in training employees for the jobs they are being asked to do. If the company needs to ask employees to do more, there should be a conversation with the provider to either conduct additional training or identify and train another person.

Think of it as a continuing safety dialogue: If a company and a contingent staffing provider are in constant communication about the tasks workers are performing, there is an opportunity to adjust training or  personnel. That ongoing dialogue not only improves safety for temporary workers, it also can highlight safety issues for an entire organization. This dialogue extends to the workers themselves, who can flag unsafe procedures and behaviors and communicate back to resolve these issues. Again, this open dialogue creates a greater focus on safety for an entire operation.

What steps can be taken to encourage this kind of dialogue?

It’s important to initiate a dialogue right away with companies by outlining the details of what training workers will receive and what tasks they will be asked to perform. This outline really serves two purposes.

First, it allows you to identify areas that require additional training or safety equipment or even more details in order to address a red flag. Secondly, the outline helps in communicating to workers the type of work they’ll be performing. Communication between the employer, the staffing agency and workers is really the front line of safety.

How does this approach help when an accident occurs?

It allows an opportunity to walk through what would happen if an employee is injured so everybody knows their role and knows what needs to be done at that point. The employee needs to report it to the contingent staffing provider and work with the company to investigate what happened, as well as determine how it can be prevented in the future. No one wants to have an accident occur, but it’s important to have a clear procedure for that possibility.

What are the benefits of these procedures to companies that use contingent staffing?

Think of it as a pyramid. First and foremost, the aim of effective safety protocols is to prevent injuries in your workers. Workplace injuries can have a significant effect on workers and their families and you want to see everyone stay safe.

Further down the pyramid, consider the financial benefits for everyone involved. Fewer accidents means lower medical bills and claims fees, but it also means more consistency and productivity.

To put it simply, accidents are expensive for everyone involved. It’s best to have a sound outline of how to avoid them. There is also this level that is often hidden and that’s quality. Workers who are trained to always follow procedures and always do the right thing (as opposed the fast thing or the easy thing) will not only be safer, but produce higher quality in their work.

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The driving trends for contingent labor shaping business for the coming year

The usage of contingent labor in the commercial sector is expected to grow for a 10th straight year in 2017. Employers value the ability to more easily manage the size of their workforce, says Andrew Deutsch, ARM, Executive Vice President, Commercial Division, at Nesco Resource.

“Emerging from the 2008/2009 recession, companies have outsourced a larger percentage of their workforce,” Deutsch says. “This gives them greater flexibility to grow or shrink their headcount while avoiding many costs. Even with as strong as the economy got in 2014 and 2015, they have continued to use contingent labor for that flexibility.”

Contingent labor makes up about 10 percent of the overall American workforce, but that figure could rise to 25 percent in the next four years, Deutsch says.

Smart Business spoke with Deutsch about what this trend means for the staffing industry, employees, and companies.

How is 2017 shaping up for contingent labor in the commercial sector?
Changes to or the elimination of the Affordable Care Act (ACA) could have a profound impact on commercial staffing. Traditionally, the ACA has been a driver of growth for the commercial staffing sector. Companies outsourced more of their staffing needs to different staffing companies to defer ACA compliance costs, so any changes to the law will definitely impact those businesses.

We’re also at the end of the typical six- to eight-year cycle that began with the recession, which would typically cause a slowdown in staffing usage. For 2017, staffing industry analysts are looking at 2 percent growth in light industrial staffing and a 1 percent downturn in staffing spend on the clerical and administrative side.

With all that being said, companies  may use more staffing in 2017. There is still uncertainty in the economy that would lead companies to continue to shy away from commitment and stick to contingent labor to fill personnel needs. If there are fluctuations in the economy, it’s easier to offload headcount and not worry about paying unemployment.

How do these changes affect the labor pool?
Employees want the ability to get additional job experiences at multiple employers and have the flexibility to change jobs, whether it’s for geographic reasons or for a career change. In many cases, employees looking to further their careers don’t do it at the same company through promotions as was typical in the past; they do it by changing companies.

These employees want a true employment experience. Through most staffing companies, employees can expect the benefits normally associated with direct employment such as medical and dental coverage, 401(k), vacation and holiday pay. They may work at various locations, but the employment experience is with the staffing company.

What does this change mean for the staffing industry?
Staffing firms are becoming more creative in their use of social media and mobile technologies for all levels of staffing.  The low unemployment rate, coupled with an increased usage of smartphones by everyone, means that more people are using social media and texting as their primary source of communication.
Technology is increasingly being used to facilitate communication in staffing.

What are some of the trends impacting employers in 2017?
With national unemployment numbers dropping to under 5 percent in 2016, and further declines expected in 2017, many companies will continue to increase  wages for entry-level light industrial jobs to entice employees.

Companies struggling to fill entry-level jobs are finding they have to increase wages in order to fill these positions with qualified employees in a timely manner. Staffing companies must consider wages as well as other benefits, such as flexible hours and opportunities for full-time work, to attract the skills needed. This has helped reduce turnover at some clients by 20 percent or more.

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HR departments can play a key role in building a strong culture

Meredith J. Guyot was on the road attending a business meeting 30 years ago when she had a profound experience at the hotel bar. She was given a coaster that she still owns to this day with the following quote scrawled across it.

“People may doubt what you say, but they always believe what you do,” reads the quote most commonly attributed to Lewis Cass, an American military officer, politician and statesman in the early 1800s.

The coaster sits next to Guyot’s phone and she looks it on a daily basis.

“That is my brand,” says Guyot, director of human resources and operations at Nesco Resource. “All of us as individuals should have a brand. What do you stand for? It doesn’t have to be a mission statement. It doesn’t have to be a vision. It’s a way to let people know who you are, what you believe and how you approach your life and your work.”

HR departments play a key role in helping businesses build and maintain a strong culture. When employees believe that their company will treat them fairly, it produces loyalty and trust that should lead to happier employees and increased productivity.

Smart Business spoke with Guyot about how to build trust between management and employees in your company.

What are some common attributes to a strong HR department?

Consistency is a good place to start. When employees understand your rationale for making decisions, it eliminates a lot of stress. If you have to make a decision that veers from your typical approach to such matters, the key is to be able to provide a rationale that explains the decision. You don’t want to leave people guessing why you decided to do this or that as it creates unease and can easily distract employees from their work.

Along these lines, transparency is another fundamental trait of companies with a strong culture and an effective HR team. Engage your team in conversation and when possible, incorporate their feedback into your decision-making process. If you have a company meeting coming up, reach out to employees and ask them what they would like the meeting to cover. What do your employees want to learn? What could you help them with that would make it easier for them to do their jobs? When people trust you have their best interests at heart, they will feel empowered and engaged.

What can leaders do who are uncomfortable engaging in casual conversations?

If you aren’t good at small talk and conversing with your employees about things outside of their work, it’s best to find someone who does have that skill to handle that role. On the surface, it may not seem that important to be able to talk to your team about what’s going on in their lives. But it can be of great benefit when an unexpected situation develops.

At our company, we had a young woman whose spouse passed away rather unexpectedly. The couple had small children and he was the benefit carrier for his family, so she was going to have to pick up our benefits. The CEO wouldn’t know that. But as the head of HR, I brought it to his attention and the company did something to ease the burden for her. We did it because it was the right thing to do. It’s not going to make or break the company, but it sends a message about how we do things. Companies are not made up of ‘people,’ they are made up of individuals. These individuals are your customers, so be very aware of their needs.

What other tips can help a company build rapport with its employees?

Talk to each other. Sounds easy. Should someone send you an email that is very in-depth, pick up the phone. Discuss the issue together and ask for their thoughts. Often they have the right solution, but only want it to be verified. By providing this support, you also deliver empowerment. Now send the email, thank them for the discussion and reiterate that their decision was the right one. As our role is strongly that of adviser, adding the word ‘trusted’ as an adjective is what separates the HR role from one who, as an example, manages a benefit platform, to one who builds a platform that best supports the individuals’ needs and company’s vision. Know your HR product. Keep abreast of developing laws and regulations. Most importantly, keep the lines of communication open to all levels of your organization.

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How hackathons help companies connect people with their passions

Take advantage of the passion that your employees bring to their work each day and the results will show in a stronger culture and more creative thinking that will ultimately benefit your customers, says James Krouse, director of marketing and communication at Nesco Resource. Nesco is the producer of the Cleveland Medical Hackathon.

“People are more passionate about what they do today than ever,” Krouse says. “If we can engage with them beyond their skills in ways that speaks to their passions, we begin to tackle large challenges that plague departments, companies, and even whole industry sectors.”

Hackathons were once only seen in the tech world, but they have quickly spread to other sectors where complex challenges and solutions are tackled in a relatively short, but intense period of time. Organizations use the concept to take hours and even days to eliminate all distractions and focus on identifying and solving challenges.

“Devoting a significant period of time to one activity can be difficult, but often, people can get a lot more done in eight hours than in eight one-hour meetings,” Krouse says.

Smart Business spoke with Krouse about how hackathons can strengthen your culture and boost productivity.

What is the goal of a hackathon?

The whole idea of a hack is to take something apart and put it back together to make it do what you want it to do. It’s an opportunity to engage people who are excited about what they do and are willing to devote eight, 24 or 48 hours to work on solving a problem.

The solution is typically not ready for market, but the process builds momentum to move the team closer to reaching that ultimate goal. You certainly have talent and expertise that can be applied to making changes and figuring things out. Why not leverage that talent to the advantage of your business and your customers?

How can hackathons be used as a recruiting tool?

Companies are continually looking for new and different ways to bring talent into their organizations. By hosting, sponsoring, and participating in a hackathon, you’re doing several things to engage with talented individuals.

First, you’re sending a message that you’re willing to take a different approach to how work gets done. That has appeal to people across generations, particularly millennials. You’re also presenting your company as a dynamic organization that is going to set forth challenges and then aggressively and collaboratively go about solving them. Finally, you have the opportunity to identify and engage with individuals who are interested in solving the same challenge you are. Again, it’s looking beyond skillsets to passions that drive people.

Do you have advice on hosting a hackathon for the first time?

If you are going to host an event that is open to people outside your company, you need to be open to not completely controlling the agenda. For example, making participants sign a contract that says anything produced at the event belongs to that company could shut out a lot of valuable creativity that makes these events worthwhile. Sometimes there is concern with using the word “hackathon.” If that’s a stumbling block for your organization, don’t be afraid to use another term to describe your event that’s creative and sends the message that this is not business as usual.

What’s the key to maximizing your return on the event?

Be sure to document and publish all the work that took place at the event either in print or online. That goes a long way toward building engagement. And if somebody creates a project that has growth potential, maintain engagement with the team to keep pushing it forward. Anything that recognizes the work that is being done and demonstrates a genuine effort to build on that momentum is extremely valuable. If you’re using the event as a recruiting tool, you need the infrastructure to put participants interested in joining your team who have skills that you’re looking for on the path to be hired. Hackathon participants are passionate about what they do and can be an important resource for recruiting talent in the near and long term.

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