• Home
  • Management
  • Business Report - Human Resources in Australia - Issues surrounding increasing use of temporary contracting / contingent workforce / casualisation.

Business Report — Human Resources in Australia — Issues surrounding increasing use of temporary contracting / contingent workforce / casualisation. Essay Example

  • Category:
    Management
  • Document type:
    Assignment
  • Level:
    Masters
  • Page:
    4
  • Words:
    2567

12CONTINGENT WORKFORCE

Contingent Workforce

Contingent Workforce

Executive Summary

Many organizations in the world of business are increasingly embracing the utilization of contingent labor. Some of the types of contingent employees include the contract workers, part-time and temporary workers, as well as the casual workers. It is typically the role of the human resource to manage this workforce effectively while also addressing the needs of the permanent employees so that they can manage to maintain an engaged and productive workforce. Following this, the report has evaluated the issues, benefits, and the challenges for the human resource and the organization as a whole when it comes to the management of the contingent workers. The report has done this through taking the perspective of both the employee and the employer into consideration. According to the findings of the report, some issues related to the management of contingent workforce include confidentiality issues, conflicts between the permanent and the contingent employees, related costs among others. Some benefits related to contingent workforce include cost savings, enhancement of recruiting capabilities, as well as an enhanced job security for the permanent employees. Some of the challenges that the report has established include the difficulty in accessing qualified workers, co-employment challenges, and issues to do with fragmented management of these employees.

Table of Contents

2Executive Summary

4Introduction

4Issues in the Management of the Contingent Workers

7Benefits of Managing the Contingent Workforce

7Cost Savings

8Challenges of the Contingent Workforce

8Co-employment Challenges

9Fragmented Management of the Contingent Workforce

9Access to Qualified Candidates

10Conclusion

11References

Introduction

A group of people who get employed by a particular organization on a basis that is non-permanent are known as the contingent workforce. The contingent workforce may consist of contract workers, the temporary employees also known as the temps, the part-time employees, college interns, casual laborers, and the college interns (Waring, 2017). Numerous organizations usually experience some abrupt situations where they need to hire contingent staff. These situations may be unforeseen circumstances which may probably jeopardize the performance of the organization and therefore, usually needs immediate attention (Waring, 2017). Therefore, it is usually essential for the managers of a given organization to foresee some of these potential emergencies so that they could prepare to address them in due time. Additionally, following the fact that the baby boomer generation has begun to go to retirement, it presents the dire need for the organizations to try and bridge the skills gap which is where the contingent workforce usually comes to play (Brady and Briody, 2016). This then means that organizations are spending more and more on this contingent workforce. However, there are various issue, benefits, and challenges which usually arise for the human resources as well as the organization when it comes to managing these contingent workers, both in the employers and employees perspectives which is what the paper will focus on evaluating.

Issues in the Management of the Contingent Workers

Typically, the Human Resource (HR) is usually has to juggles various issues regarding the employees in an organization starting from their hiring to their management which then means that management of the contingent workers may be the last on their list (Arnold and Bongiovi, 2013). Often, the regular employees of an organization are the ones that are given most of the attention because they are usually expected to stay with the company for longer duration as compared to the contingent workforce (Arnold and Bongiovi, 2013). However, this is just one school of thought regarding the issue. There are various other HR professionals who have come to the realization that these contingent workers are not quite as trivial. In the perspective of these groups of HR professionals, they consider it an important thing to have a clear and practical concept regarding the ways in which these workers get hired, managed, and finally get released (Tweedie, 2013). An organization which just makes use of these contingent workers but then fail to manage them in an efficient manner may be establishing for themselves a shaky ground when it comes to financial and legal perspectives (Tweedie, 2013).

Aside from the issue of realizing the importance of the proper management of the contingent workers by the human resources and the organization in general, another issue is regarding the regular employees. The HR professionals have been caught up in striving to balance the needs of the contingent workforce as well as that of the regular employees in such a way that none of them will feel looked down upon (Osnowitz and Henson, 2016). In most cases, the regular employees usually resent the contingent workforce, whether they are causal laborers, or contractual workers. This is primarily because the regular employees usually feel as if these contingent workers basically rob them off some opportunities like the overtime opportunities or maybe robbing off someone who is deserving to get a full-time job in the same field (Osnowitz and Henson, 2016). Additionally, these regular employees may be knowing have witnessed some job cuts of their colleagues only for their places to be taken up by the contingent workforce (Osnowitz and Henson, 2016). Therefore, the HR professionals are usually responsible in addressing such issues do that they can manage to create harmony amongst all of these employees.

From the perspective of the employers, there is usually a concern for the possibility in the reduction of productivity and loyalty for their organizations (Scheel, Rigotti and Mohr, 2013). Some of these contingent workers like the contractual workers, causal laborers, or the temporary workers are usually not entirely dependent on the employer and their organization for their daily livelihoods. This means that these workers may not be motivated enough to give their all when working for their employers and consequently may not be loyal to the organization at large (Scheel, Rigotti and Mohr, 2013). This group of workers may also be less productive which will translate to the low work quality and outcome as compared to the regular employees.

Another issue is that the contingency workforce poses on the HR professionals as well as the organizations is that it is their responsibility to manage the culture shock that this group of workers usually face when they enter the new organization (Allen et al., 2016). It is typical for the new workers to feel excluded and on the other hand, the permanent employees to feel threatened by the contingent workers. Many of the companies usually choose to hire these workers as opposed to hiring new permanent employees and then later laying them (Allen et al., 2016). Therefore, the HR professionals are loaded with the responsibility of handling all these issues at a go without compromising one element or aspect of HR unattended.

Other minor but significant issues that the HR and the organization will need to address are the issues to do with confidentiality matters and the increased costs of training. Regarding the confidentiality issues, the employer who chooses to make use of contingent workers usually lacks the guarantee that these workers will not easily move and work in the firms of their competitor (Waring, 2017). This has proven to an important issue more so when these workers have some specialized expertise and skills which then limits the number of organizations that they can work in (Waring, 2017). Regarding the costs of training, at times a given organization may undergo some high rates of turnover of the contingent workforce as compared to that of the permanent workers (Tweedie, 2013). Following this, the HR department will have to make various training arrangements of always hiring these contingent workers and ultimately elevated training costs.

Benefits of Managing the Contingent Workforce

Cost Savings

One of the significant motivations that have led many organizations to opt to hire the casual and contractual workers is because of the savings in their costs (Townsend and Wilkinson, 2013). Many of the employers usually pay their permanent employees even for their non-productive times. Regarding the contingent workforce, this is not usually the case. They are usually only paid when they are useful and productive to the company (Townsend and Wilkinson, 2013). Another aspect of the cost savings, is that the employer does not usually provide the contingent workers with some of the benefits that they provide for the permanent employees like the health insurance, sick leave, or vacation times. This then means that the organization realizes some significant cost savings which is the aim of all the companies (Townsend and Wilkinson, 2013).

The permanent employees also benefits when the HR chooses to hire the contingent workers. This is because hiring these workers offers the permanent employees with a better job security (Brady and Briody, 2016). The ability to scale operations up and down which is regularly required by the contingent workforce then means that the permanent employees get to enjoy the enhanced feeling and sense of job security (Brady and Briody, 2016). This is especially the case when the company is faced by some difficult economic times because the permanent employees usually believe that the contingent workforce will be the ones to be fired first when it comes a time where job cuts become vital (Brady and Briody, 2016). Thus, from the perspective of the permanent employees, the contingent employees is basically a buffer for them when it comes to the need of job cuts.

From the perspective of the Human Resource Management (HRM), the proper management of the contingent workforce offers them the opportunity for enhancing their recruiting capabilities (Scheel, Rigotti and Mohr, 2013). The HR professionals perceive the contingent workers as a useful set of employees who act like a sourcing tool through allowing them to assess the performance of the worker when doing the particular job as a contingent worker. The HR professionals may evaluate how these workers perform and decide to offer full-time positions for those workers who perform very well in their jobs (Scheel, Rigotti and Mohr, 2013). Hiring the contingent workers offers the HR professionals an opportunity to evaluate their potential permanent employees when subjected to the real-life conditions. If the HR practitioners become worried that they may make some poor decisions when it comes to hiring high-qualified employees for a particular job, then the contingent employee often allows them to ‘try before they hire’ (Scheel, Rigotti and Mohr, 2013).

Challenges of the Contingent Workforce

Co-employment Challenges

One of the most significant challenges that come about when the employer chooses to hire the contingent employees is that there are challenges of misclassifying these contingent workers which may result in co-employment issues (Richardson, Lester and Zhang, 2012). As discussed earlier, there are various categories of contingent workers including the casual, contractual, interns, among others. All of these categories of employees expect to be treated in a different way by their employer depending on their qualifications. On the other hand, there may also be issues which may arise following the conflicts that may arise between the permanent employees and the contingent workers (Richardson, Lester and Zhang, 2012). It is, therefore, the role of the HR professionals and the organization at large to develop clear strategies on how to handle and treat the different sets of employees to reduce some of these issues which may in turn, jeopardize the overall performance and productivity of the employees (Richardson, Lester and Zhang, 2012).

Fragmented Management of the Contingent Workforce

In most of the companies, the engagement process of the contingent workforce is typically managed and handled by the individual HR professionals. Given that the HR professionals have the significant amount of power in the management of this group of individuals, then the issue of transparency becomes hard to achieve (Osnowitz and Henson, 2016). Typically, this fragmented type of management of the contingent workers may result in high expenditures on these group of workers, as well as a decreased visibility into who is actually performing the required tasks and who is not and the difficulties of compliance (Osnowitz and Henson, 2016). Therefore, when the management of the contingent workforce is undertaken by various HR professionals as opposed to one entity, then the management of these employees becomes unstructured (Osnowitz and Henson, 2016). In turn, it can then be hard to develop a program that is cost-effective and efficient.

Access to Qualified Candidates

There is also a challenge to the employers when it comes to accessing qualified candidates. The strength and effectiveness of an individual contingent workforce program is highly dependent on the access of the qualified candidates for a particular job (Dräger and Marx, 2017). Usually, a contingent workforce program that is unstructured may result in an inadequate access to candidates who are qualified. Some companies often depend on some given suppliers to give them some of these employees (Dräger and Marx, 2017). In such a case, the supplier may not be in a position to meet the demands of an organization and in turn lead to these suppliers charging them some exorbitant financial rates for some of these contingent candidates (Dräger and Marx, 2017). It may also result in the elimination of the contingent workforce program of the employer altogether.

Conclusion

In the turbulent business environment and unstable economic times, many organizations have resulted in coming up with ways of maneuvering through these times. One of the mechanism that organizations have adapted in hiring contingent workers either like casual, contractual, part-time, or even interns. In doing this, the HR professionals as well as the organization at larger have experienced different issues more so relating to proper management of this group of workforce as well as balancing the needs of both the contingent workers and the permanent employees. There are various benefits of hiring the contingent labor force some of which include cost savings, the enhancement of recruiting capabilities, as well as an enhanced job security for the permanent employees. The challenges involved have also been discussed in the report.

References

Allen, M., Liu, J., Allen, M and Imran Saqib, S 2016, Establishments’ use of temporary agency workers: the influence of institutions and establishments’ employment strategies. The International Journal of Human Resource Management, pp.1-24. DOI: 10.1080/09585192.2016.1172655

Arnold, D. and Bongiovi, J 2013, Precarious, Informalizing, and Flexible Work. American Behavioral Scientist, 57(3), pp.289-308. DOI: 10.1177/0002764212466239

Brady, M and Briody, A 2016, Strategic use of Temporary Employment Contracts as Real Options. Journal of General Management, 42(2), pp.31-56.

Dräger, V and Marx, P 2017, Do Firms Demand Temporary Workers When They Face Workload Fluctuation? Cross-Country Firm-Level Evidence. ILR Review, IZA Discussion Paper No. 6894. DOI: 10.1177/0019793916687718

Osnowitz, D and Henson, K 2016, Leveraging Limits for Contract Professionals. Work and Occupations, 43(3), pp.326-360. DOI: 10.1177/0730888416642599

Richardson, S., Lester, L. and Zhang, G 2012, Are Casual and Contract Terms of Employment Hazardous for Mental Health in Australia?. Journal of Industrial Relations, 54(5), pp.557-578. [DOI: 10.1177/0022185612454974]

Scheel, T., Rigotti, T. and Mohr, G 2013, HR practices and their impact on the psychological contracts of temporary and permanent workers. The International Journal of Human Resource Management, 24(2), pp.285-307. DOI:10.1080/09585192.2012.677462

Townsend, K. and Wilkinson, A 2013, Contingent management plans awaiting a contingency: the GFC and workplace change in the Australian hotels sector. Asia Pacific Business Review, 19(2), pp.266-278. DOI: 10.1080/13602381.2013.767640

Tweedie, D 2013, Precarious work and Australian labour norms. The Economic and
Labour Relations Review, 24(3), pp.297-315. DOI: 10.1177/1035304613494521

Waring, P 2017, The Nature and Consequences of Temporary and Contract Employment in the Australian Black Coal Mining Industry. A journal of the social and economic relations of work,  Vol. 14, issue 2, pp. 83-96. http://dx.doi.org/10.1080/10301763.2003.10669289