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How to survive the “perm squeeze” with alternative talent networks 

The UK Report on Jobs has documented a continuous decline in the number of permanent hires throughout 2023. The tone was set in the first quarter, as permanent hires fell at the fastest pace for two years. Fast forward to November, and the report documented the thirteenth successive monthly reduction in permanent staff hires.
 
I refer to this as the “perm squeeze”, a hiring period that is characterised by reductions in the number of permanent appointments whilst the number of vacancies remains steady, and the availability of workers for permanent roles can even increase. It’s a trend we are seeing across the globe – impacting all industries, sectors and job levels.
 
This shortage of candidates needed to fill permanent roles – and a lack of appetite among businesses to hire permanent staff – points to a mismatch in the supply and demand of available talent, forcing organisations to think outside the box.
 
As we head into 2024, what does this mean for your workforce strategy?
 
 
 

 

Widening the net in the search for talent

 
The current financial pressures placed on organisations operating in difficult macroeconomic and political environments have clearly impacted the number of permanent staff being hired, but work still needs to get done.
 
As a result, organisations are looking more closely at the specific skillsets needed in their business and hiring accordingly. Looking to remain agile in the face of global economic uncertainty, many are exploring more cost-effective engagement strategies and turning to more flexible and temporary staffing solutions, rather than relying on traditional permanent hires.
 
With nearly every industry now looking to non-permanent workers to fulfil demand for skills – and these workers supplying everything from delivery services to IT solutions – you need to remodel your workforce strategy to adapt.
 
 

Making the most of non-permanent talent

 
So how do you ensure you have the right talent, in the right place? As the rate of non-permanent engagements increases, so too does the challenge of identifying the right channels to access emerging skills, engaging the right suppliers and conveying the right message to attract and retain the expertise needed.
 
Here’s my top tips to get started:
 
1. You need to achieve total visibility across your entire workforce – including (but not limited to) permanent staff, contingent workers or agencies and consultants contracted for specific projects. This will highlight any gaps that need filling, as well as possible overlaps in skills availability or resource allocation.
 
2. You need to understand the legal implications of non-permanent hiring, especially in overseas territories. Cybersecurity, data and tax legislation, particularly in an unfamiliar jurisdiction, are long-standing challenges and incorrect worker classification can incur significant penalties. A workforce solutions partner that offers guidance and support with current and upcoming legislation can help you make the most of global talent.
 
3. You need to ensure that you have a strong Contingent Value Proposition (CVP) in place to attract – and reattract - the best contingent talent.
 
 
Once you’ve taken the plunge and engaged non-permanent workers, you need to make sure that your contractors are equipped for success from day one.
 
1. Just as you would with permanent hires, set key objectives and clear project deliverables. Ensure you have milestones in place and define regular review periods.
 
2. Adopt a structured project management approach, especially when you’re working with a large number of contingent workers. Set clear parameters to respect the scope of the contractor, while keeping them at arms’ length to minimise the risk of worker misclassification.
 
3. Finally, it’s pertinent to have a clearly structured rate card to avoid any billing surprises. A strong workforce strategy partner will be aware of the market rate and analyse future trends to ensure you’re not paying over the odds as well, supporting you when market trends shift to ensure critical projects aren’t put at risk.
 
 

Moving towards Total Talent Management (TTM)

 
While the outsourcing of work is rising in strategic importance due to ongoing economic uncertainty, it does not diminish the significance of permanent employees.
 
Rather than treating these pockets of resource as mutually exclusive, organisations need to be aspiring towards the ‘Total Talent Management’ (TTM) mentality that takes your entire extended workforce into account. Instead of simply filling roles, you should take a ‘task-based’ approach to workforce management. This starts with defining the project that needs to be completed, before considering all the available channels – permanent staff, contingent workers, freelancers, temporary workers, consultants and agencies – to ensure you have the right talent, the right engagement style, all at the right cost.
 
Creating a clear talent roadmap, including existing and future capabilities will help you define your workforce needs, planning for your immediate requirements, while also focusing on long-term capabilities. Dismantle departmental barriers and get your HR, People and Culture, Procurement and Finance teams talking. This will enable you create an ecosystem that is exceptionally adaptable, enabling you to plan for, acquire and deploy this labour in a holistic way.
 
 

Balance short and long-term priorities

 
By looking at your business strategy over the coming months and years, you’ll gain an understanding of the priorities you need to tackle now and those you need to prepare for in future. Talent Advisory at Hays can help you get to grips with your current capability and capacity, versus your future requirements, and set the groundwork for a workforce that shares your vision and values.
 
A Recruitment Process Outsourcing (RPO) solution offers your organisation access to a wealth of expert recruitment capability, ensuring efficient and effective access to permanent talent and an improved employer experience. Managed Service Programmes (MSP) allow you to access the expertise of the non-permanent workforce. Used in conjunction, you’ll have a resilient workforce strategy that works today, and tomorrow.
 
“Data from our own annual report reflects the growing demand for contingent workers. In the financial year 22/23 we sourced over a quarter of a million temporary roles, an increase of 30,000 from the year before. As your external workforce grows, so too will the complexity of managing it. Why not use our knowledge, experience and global operating model to help create a successful workforce strategy action plan?”

 

AUTHORS

Patrick Mannall
Senior Service Delivery Director at Hays 

Patrick is one of our most experienced Service Delivery Directors with 18 years’ experience in designing, implementing multi-country talent and contingent workforce strategies for enterprise clients. With a proven track record of managing outsourced services for global clients across multiple geographies and industries, he partners with some of our largest multi-country customers, supporting a portfolio of clients across 24 countries.

 

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