The way that companies manage their workforce is changing with a growing proportion of roles being fulfilled by self-employed contractors, freelancers, gig workers and the so-called external workforce.

This has caused business leaders to rethink how they control this change. With an increasing number of stakeholders being involved in the workforce management process, many of them are turning towards a Total Talent Management (TTM) strategy.

Finding the optimal mix between permanent staff and contingent talent

In the past, most of an organization’s workforce was comprised of permanent staff. However, in the last 30 years, companies have increasingly adopted a broad range of external workers within their workforces. These include contractors, flexible workers and other forms of contingent labor. The external workforce enables organizations to have a flexible workforce that can be tailored to their specific workload requirements while also offering significant cost savings over permanent employees.

For many modern companies, their total workforce is divided into two distinct groups: internal workers and external workers. The external workforce has enjoyed steady growth since the 90s, as people, process, data and technology have developed to support their inclusion.

However, this talent mix has become increasingly strained by the latest developments in the talent market. In response to widespread talent shortages, global businesses have started to focus much more on their workforce planning and financial performance.

Only 5% of businesses feel they have fully optimized their mix of talent between internal and external workers needed to achieve their business objectives.

How has the contingent workforce changed?

Indeed, the external workforce has grown far beyond anyone’s preconception of what it might become. The resourcing needs of business have changed, the landscape of talent has grown, business models transition much faster, and the overhead costs of bi-annual re-orgs have made a talent mix comprised solely of permanent employment uneconomic and unviable.

As a result, most organizations are actively evaluating the importance of their recruitment processes and workforce management strategies. They are looking at how they can best source skilled talent to ensure that productivity keeps up with demand.

What is total talent management and why is it relevant?

In previous workforce management strategies, the hiring process for internal candidates was coordinated by an organizations HR team. In contrast, the hiring of the external workforce has traditionally been the responsibility of Procurement. The total talent management strategy changes this.

Total talent management represents a cohesive and singular approach to hiring all workers, benefiting both the internal and external workforce hires. This approach sees the hiring process for both types of candidates as one, delivered by a single workforce partner. This means the hiring process can be shared by all stakeholders, resulting in the creation of a single uniform approach to resourcing, onboarding and managing the subsequent employee life-cycle.

Adopting this approach benefits companies in a number of key ways. TTM can enable them to overcome challenges within their current workforce composition, and help earn them a competitive advantage in the market. Specifically, it can help across 4 key factors: people, process, data, and technology.

1. People

The first factor that a total talent management approach improves is the composition of people within a company. This specifically means finding the optimal mix of talent between contingent workers and permanent staff. Only then will business leaders be able to achieve the best levels of workforce productivity that will drive success.

Yet, this is a harder task than many realise. The optimal talent mix for your organization is unique to your company and will be different for organizations in different industries. It can only be achieved by making the strategic decisions on a corporate level. You can’t hope to achieve it by having different departments make talent management decisions on a departmental level.

In fact, in a 2021 survey by Deloitte, the siloing of departments was seen by 75% of respondents as the biggest barrier to the implementation of a total talent management strategy.

To help combat this, a new portfolio holder with single responsibility for the deployment and development of the management strategy should be created.

Organizations who have already made this management change have grouped the new responsibilities for a TTM leader under a Chief People Officer (CPO) role who’s responsibility is to give a greater scope to HR leaders to be able to control the entire workforce (external and internal). It also has the effect of placing the responsibility for the success of the strategy on one person and one team.

This will help aid the communication between different departments, as this new role manages the responsibility of implementing this strategy across all departments at a corporate level.

2. Processes

The processes of selecting, resourcing and hiring talent are essential to any organization. With the siloing of departments, these processes are often fragmented and are vastly different across the entire company. This means that different candidates (permanent or external) will have different onboarding experiences and times to hire, creating a discrepancy in how each of them perceive your employer brand.

This problem can be solved by adopting a TTM approach, and merging all of the various processes used by different departments into a single source. Here, instead of having to operate two processes between HR and Procurement teams, a unified TTM process will result in a streamlined brand story. After all, if you want to achieve success in your business, you will need to ensure that every employee has a clear and cohesive understanding of your employer brand. 

3. Data

To make effective strategic decisions within your talent strategy, you need to get an accurate picture of all the workforce management data you currently have. For businesses with separate operational processes for internal and external candidate hire, this can be a significant hurdle.

A report by Staffing Industry Analysts concluded that 46% of organizations found they had a lack of data available to them before designing their total talent management strategy.

This makes it harder for businesses to get a true picture of the current state of their workforce. It complicates the extraction of information on your current onboarding processes, especially when data is governed by staffing agencies. However, this shouldn’t derail the implementation process entirely.

Instead, it provides a chance to rethink and revaluate what procedures are necessary and important in the hiring process. While starting from scratch is far from ideal, the chance to build your total talent strategy from the ground up is beneficial to businesses that have a large gap in communication between their HR and Procurement teams.

4. Technology

There’s never been a better time for total talent management. While the idea behind the creation of a single workforce management strategy has existed for some time, the technology needed to support it has been lacking.

In the 2019 annual version of the SIA survey, numerous businesses were already looking to transition their workforce management to a total talent solution. However, the biggest barrier to its implementation at the time was the technology platforms, or rather the lack of them.

Whilst separate vendor management and HR systems existed for the management of both the employees, vendors, suppliers and the contingent workforce, these were entirely separate platforms. As a result, this only furthered the departmental divide between different stakeholders within the business.

I already have a VMS. Why should I care?

If you already have a VMS that is working for your business, you may not feel that it is essential to upgrade your technology. However, staying with outdated software and datasets will only further the departmental divide within your organization and hamper growth.

Luckily, external service providers have caught up with the times. Now the technology platforms exist to source, recruit, onboard and manage the complete worker lifecycle for both internal and external workers.

These platforms can be used by multiple stakeholders within the business and are designed to manage any organizations workforce in its entirety, presenting a true picture of the entire workforce at any given time, making strategic decisions about future workforce planning easier.

By seeing a complete picture and being presented with all the data possible, organizations are able to find their unique talent mix of internal and external workers that will optimize their productivity potential.

How can a VMS help?

Adopting a total talent management approach is more than just changing the way you manage your workforce.

It requires a complete overhaul of the technology systems and management structures you currently have in place. A crucial part of this change is adopting a technology platform that can support the acquisition of both internal and external candidates, alongside data tracking, analytics and workforce reporting.

For most businesses, the best way to acquire a technology platform that can achieve all these objectives is to partner with an external outsourced service provider.

Once your business has partnered with an external service provider, you should be able to convey your knowledge of how your business operates, your brand values, as well as your strategic growth plans for your future workforce.

Once this onboarding process has been completed, the external service provider is able to tailor a technology platform to meet your individual needs and your unique processes of managing non-permanent workers. In most cases, this external service provider will also be able to provide a talent pool of existing candidates that can be integrated and managed by your organization.

Final thoughts

The driving force behind the transition to TTM strategies is the increasing demand for skilled talent in a market rife with shortages. Only through this approach can companies find and achieve the optimal talent mix, and furthermore boost their workforce productivity. This itself is reliant on having the right people, process, data and, most crucially, technology needed to support this.

Businesses that fail to adopt this strategy, or who implement it poorly will not be able to achieve workforce optimization. Instead of having an on-demand talent resource that can be turned on at will, they will have to compete within the already hotly contested external workforce market.

For firms who aim to be prepared to handle their future internal workforce demands and any disruption to the overall talent market, they can only do so by updating their existing platforms and merging them into a single, unified VMS. To achieve the full potential of your total talent management strategy, a VMS is essential.

Jake Ellis

Jake Ellis

Author

Jake Ellis is a marketer, writer and a solutions marketing consultant. His passion is to help make products shine. Jake has written articles and guides on the future of work, digital transformation, talent management, and contingent workforce. He can be reached via LinkedIn.