2011: Time to Find the Right Workforce Mix

News Updates

Now that organizations sense that the majority of recessionary job cutting and corporate downsizing has passed, it’s a good time for human resource managers and talent management strategists to reassess how the remaining workforce can meet the new needs of the company. The right workforce mix is unique to each company’s needs, but there’s a fairly standard process that companies can follow to determine the best mix of employees for achieving company goals.

Before mapping out the route to an optimal workforce mix, focus on the starting point, or the company’s current mix of workers, said Jason Ezratty of Brightfield Strategies in New York City. Ask “What if we left everything alone? Where is my mix going? If all things stay the same, companies usually do have a trend they are already on,” he noted.

Ezratty recommended concentrating on where the company wants to be and how to get there.

Bucket Lists

Kip Wright, vice president and general manager for Manpower subsidiary TAPFIN, based in Houston, agrees that companies should first understand the resources they have internally and externally. Recognize that there are “various buckets that your workforce comes in” and that each of those buckets offers distinct benefits and drawbacks, Wright said.

One bucket comprises the full- and part-time employees who are hired and paid directly by the organization. The benefits of this group: These workers “are loyal, you have knowledge retention, and you know the costs” associated with keeping them. The drawbacks, he said, are that it is difficult to manage their use based on business peaks and valleys. Also, these employees require a significant long-term investment and may not maintain up-to-date skills.

Temporary workers make up the second bucket. With these people, “it’s easy to acquire new skill sets, but knowledge leaves with the individual,” Wright said. And, temporary workers have less loyalty to the company and are less a part of its culture.

The third bucket is made up of workers hired and provided by an outside firm, or contractors. The main benefit of this group is that by turning to an outsourcer for a project, “the time to market is generally faster,” Wright said. But “you need to have a tight definition of your expectations, and you have to know how to manage an outside contractor.”

Workforce Mixology

Getting the right mix of talent is critical. Consider the skills needed for the work and whether existing employees have those skills, Wright says. Does some work require particular expertise that can be developed easily among workers with the company, or are the required skill sets rare in the workforce?

The percentage of workers in each bucket tends to ebb and flow for companies based on their needs, according to Wright. “Never say ‘I need [the workforce] to be 73.5 percent full-time employees,’ ” he cautioned. “Say that 70 percent to 80 percent [of employees] with [a particular] skill set needs to be full time, and you can track and monitor that.”

Wright works with companies to develop a workforce model by asking:

  • What might an optimal model look like, based on your needs?
  • What is your talent acquisition strategy?
  • What are your goals and objectives?

By answering those questions and following through in the hiring process, he said, the company “begins to shape the direction of the workforce over time.”

Both Ezratty and Wright recommend against trying to develop and implement an organizationwide workforce mix strategy all at once. Instead, they said, start with a pilot within a department or function.

“You need to get your feet wet. … You can’t do it enterprisewide,” Wright said. “This is a process. It takes time to develop, advance and optimize. You need data that you can use in the context of your own company. It’s an evolution.”

Influence of Seasonal Adjustments

To maintain its best workforce mix, Madison, Wis.-based American Family Insurance relies on a cadre of independent claims adjusters to augment its team of about 7,800 employees in 19 states.

In property and casualty insurance, summer is the busiest season because storm activity can cause widespread damage, said Daniel J. Kelly, vice president of human resources for American Family Insurance. “We don’t staff for the storm activity,” he noted. “We bring in independent adjusters.”

But the company wants to make sure that it maintains a high level of customer service, Kelly said, so “at every major event, we have American Family employees involved to some degree.”

And independent adjusters are held to the same standards as full-time employees. “If they don’t meet certain standards, the amount they get paid is reduced, just like [with] employees,” Kelly stated. To customers, independent adjusters should seem no different from full-time employees, he added.

American Family Insurance usually maintains about 275 contract workers in office support jobs, such as processing policies. It has a significant IT initiative under way that brought the number of IT contract workers from 250 at the beginning of 2010 to about 500 by the end of the year.

“Some people we bring on on a temporary basis are working on the initiative,” Kelly said. “Others are backfill as we use company resources on the initiative. We need some of our own people on the project. We think this will be about a three-year initiative.” Not wanting to commit to that full-time employee head count after the initiative is over is one of the reasons the company hired contractors, he said.

Influence of Customers’ Needs

Customers’ needs drive the mix of full- and part-time employees at Accounting Management Solutions Inc. (AMS), an accounting consulting firm based in Waltham, Mass. Of the company’s approximately 110 employees, 85 are consultants out in the field, according to Stephen Bartlett, managing director of AMS’ client services and resource management. These consultants “may have one client one day a month or two clients every single week. They may have as many as 10 different clients. They augment the clients’ business,” Bartlett explained.

Clients expect the consultants to function with a minimum of training on-site, he said, so AMS has an institute “to determine what people need to stay fresh” and to provide instruction. Trainees could receive information on new software or new accounting rules, for example. Full-time employees generally receive more training than others, but if part-time workers need more training hours, they get more.

“We’ve got to be smart about taking care of our talent, so they grow and stay with us” and continue to meet customer needs,” Bartlett said.

Stephenie Overman is author of the book Next-Generation Wellness at Work (Praeger, 2009).