Talent Acquisition Enters the Contingent Workforce Arena

The TA Power Play

In a study of 53 mid-market and Global 5000 companies entitled “Pulse Insights: Ownership of Contingent Workforce Programs,” Talent Simplified found that a “significant portion” of contingent workforce programs is managed through shared ownership, with 39% of study participants indicating shared responsibility between HR/TA and Procurement. Also, nearly one quarter (24%) is HR/TA owned, while 35% are owned by the Procurement departments.

“Notably, 55% of programs are primarily owned by Procurement, compared to 39% owned by HR/TA, with 6% indicating equal ownership,” reads the report.

This trend toward collaboration highlights an evolving approach to contingent labor management, integrating the strengths of both departments to enhance efficiency and responsiveness in meeting workforce needs, says the report.

The report also found that 15% of participants indicated a shift in program ownership from Procurement to HR/TA in the last five years, suggesting some organizations are looking at talent in parallel with their full-time workforce.

For HR analyst Josh Bersin of the Josh Bersin Company, contingent hiring is no longer an outsourcing process to delegate to procurement, it’s a strategic source of skills and scale.

“While most companies delegate project hiring to line leaders, when HR is involved, organizations can build a much more strategic solution,”
he says, adding that this includes internal gig work, strategic contractors, and skills-based outsourcing.

Does this mean the end of the procurement department? Hardly, says AMS’ Jones.

“This does not mean that procurement do not need to be involved with the external workforce or that they do not offer huge value — they absolutely do, and they need to be involved,” says Jones. “A better strategy now is to combine the strengths of TA/HR as well as procurement when it comes to leveraging the external workforce to achieve better strategic outcomes.”

The Contingent TA Advantage

This new development stems back to how Procurement and TA have traditionally searched for workers and filled open roles, with their different missions and desired outcomes.

According to Jones, Procurement and TA have what he calls “fundamentally” different functions, with contrasting skills and focus areas. For example, Procurement tends to approach managing contingent workers through the lens of cost, which makes sense given that the spend on the external workforce can often be an organizations biggest cost outside of the cost of their permanent employee base, according to Jones.

“The cost focus then moves into operational processes ensuring they are designed and implemented to ensure there are guardrails and processes put in place to ensure costs are being controlled as tightly as possible,” he says.

Procurement typically excels at compliance and its ability to ensure that external workers are known and visible in their new roles when they start, and that they comply with the firm’s policies and the firm is protected via contracts.

TA professionals, on the other hand, often do not have the same fervor to manage costs as their approach is often linked to quality-of-hire and being the guardians of the brand. This includes the candidate and hiring manager journey and perception of the brand and process, says Jones.

“Workforce planning and helping the business plan on how they will fill open roles is a strong remit of talent acquisition, which then ties back to the overarching strategy of looking at all aspects of the talent ecosystem,” says Jones.

Organizations are increasingly looking at contingent workers as resources to be tapped on an ongoing basis, and a talent pool that needs to be managed over time, rather than just one-off contractors, says HR analyst Rebecca Wettemann, CEO and principal analyst for Valior. She adds that this is particularly true in sectors where the workforce is "aging out," expertise is limited, and more mature workers may be willing to work on a contingent basis beyond retirement.

“Bringing TA and HR teams to contingent hiring enable the organization to use the same criteria and processes — and, potentially, tech — for permanent hires that they do for contingent workers. This will enable more effective workforce planning and strategic hiring and allow organizations to optimize their staffing with full visibility into all workers,”
says Wettemann.

Talley agrees. He says that TA brings a talent-first mindset that works great alongside Procurement’s focus on cost and compliance. When they’re both in the mix, companies can move faster and stay flexible as things change. At the end of the day, it’s about finding the right balance to meet the business’s needs now and in the future.

“TA’s involvement also ensures that the extended workforce is strategically managed and effectively utilized,” says Talley.

With TA in charge of contingent hiring, there’s a different way of thinking and deploying strategies. For example, TA will typically support a broader strategic conversion within the business to answer questions such as what skills are needed as a business to stay competitive, and where are we going to find them in the coming years, says Jones.

TA leaders can bring their experience finding skilled candidates to the contingent job search. Companies often start the hiring process by saying, “I need a contractor” or “I need a full-time employee,” but once TA defines the need based on the skills the job requires, they can opt for a contract worker until the need for a full-time hire arises.

“Workforce planning will be improved by including TA in the process and this will likely improve decision making in terms of speed and ownership of who makes the decisions and what resources are hired,” says Jones.