Hybrid Workforce Management: Navigating the Complexities of a Diverse Workforce in the Modern Era

This article, written by Hyoun Park, CEO and principal analyst at Amalgam Insights, first appeared at Amalgam Insights and is republished with permission.

Businesses face the challenge of managing a variety of workforce issues across the wide variety of people at the company: freelancers, outsourcing firms, consultants, contingent labor, and full-time labor. The United States Government Accountability Office estimates that about 40% of workers are not full-time workers and fall within a variety of roles including contractors, part-time workers, and on-call workers that may track time through different systems and methods. 

With this challenge in mind, companies need a comprehensive management view that automates processes and helps them focus on conducting work more quickly—rather than being mired in a sea of paperwork and processes. No longer simply a matter of managing active full-time employees, workforce management must now support a comprehensive practice across contingent, part-time, full-time, and other categories of workers.

To effectively leverage their hybrid workforce across financial, operational, and management capacities, companies must consolidate workforce management tasks onto a single platform and a consistent set of data to avoid constant switching back and forth across tools and data types. This platform should include contingent labor, internal labor, time and payroll, workforce scheduling, financial budgeting, employee engagement, and onboarding capabilities, including governance, risk, and compliance management across all areas. Data across all of these areas should ideally be within a single data store that provides a shared version of the truth for all stakeholders across human resources, finance, and line-of-business management roles.

Amalgam Insights believes the following needs should be considered in developing a comprehensive workforce management system.

Managing payroll, performance, and relevant benefits for employees, consultants, and freelancers.

Workforce management efforts must consider the combination of standard payroll systems, time and attendance systems, scheduling systems, contingent labor management, on-demand services, third-party temporary labor and consulting firms, and self-employed contractors. In doing so, companies must decide which benefits and services are consistent across various labor types and what resources are needed to maximize the productivity of each class of workers. Regardless of labor type, compensation must be timely, accurate, and provided depending on contractual agreements based on relevant labor law. By managing all classes of workers across a shared and consistent set of characteristics, companies may be better positioned to see if there are part-time or contingent workers who should be made full-time employees or to see which tasks are better supported by specific workers, skill sets, geographies, shifts, and other identifying work characteristics.

Supporting differing compliance requirements based on geography, status, and corporate asset access.

Workers with privileged access to trade secrets or classified information must all be treated with the relevant compliance and confidentiality standards regardless of their work categorization. At the same time, companies must manage the varying standards across wages, benefits, and tax obligations that exist in each jurisdiction where a worker is located.

Standardizing key performance indicators (KPIs) and management by objectives (MBOs) across different work categories by focusing on the quality and quantity of relevant outputs and deliverables.

Even within a single department, the combination of roles, geographies, seniority, and employee status can lead to widely disparate individual goals. As companies identify appropriate KPIs and MBOs on an individual level that maximizes the value that each person brings to the workplace, they must also ensure that teams are aligned to shared corporate goals rather than disparate and disconnected metrics that may inadvertently pit workers against each other to pursue personal success.

Using a feedback-based set of processes to create a consistent employee experience and corporate culture that provides all workers with a shared set of expectations, goals, worker preferences, and employee support.

Employee feedback is only as useful as the corpus of data created and the management response associated with the suggestions and criticisms provided. At the same time, feedback can also be part of a continuous learning and continuous improvement initiative if used as analytic and decision-guiding data that is tracked and monitored over time. Feedback can also be analyzed to see if workers are engaged in processes that are designed to improve the employee or corporate experience.

Understanding the top-line and bottom-line financial contribution of contract and contingent work.

Although revenue per full-time employee is an outward-facing metric used by public companies to show efficiency, the business reality is that contractors and part-time employees also represent investments that should be reflected in determining corporate productivity and profitability. If companies are effectively replacing skills with contingent labor, this should be noted and tracked. Conversely, if there are significant gaps between full-time and other employees, companies should figure out the cause of these gaps and whether they can be closed through training, onboarding, or technical augmentation.

Taking Steps to Create a Consolidated Workforce Management Environment

Ultimately, companies have a responsibility to support the stakeholders and shareholders associated with the company. However, this responsibility cannot be met if the company lacks consistent visibility into every worker who is attached to corporate work output, regardless of employment status, geography, department, or role. 

So how do companies improve productivity and empower executives to be more strategic in their approach to support productive workers, while maintaining all relevant compliance responsibilities and a shared version of all relevant data?

Amalgam Insights has the following three recommendations for human resources, finance, and managerial roles tasked with creating a better work environment:

1. Ensure that you have the data necessary to maintain consistency of work expectations. Workers should be able to expect some baseline of employee experience even as they differ in location, employment status, and compensation, if for no other reason than to provide every worker with a standard set of expectations and professional responsibilities.

2. Measure the profitability and revenue across the entire workforce based on a holistic view of hours, skills, geographies, and business goals. This capability can potentially uncover if specific hiring or labor sourcing strategies may be more profitable, or at least aligned to higher revenue, than simply treating all hiring and contracting as an exercise in managing costs.

3. Manage contingent labor with metrics and standards similar to traditional employee labor. When 40% of labor consists of either part-time, contract, or on-demand workers, a workforce management solution that only looks at full-time payroll, onboarding, time, attendance, and benefits is no longer sufficient to understand the financial and operational details of the holistic workforce. Frontline and hourly workers seeking to manage their scheduling and time need a consistent and mobile experience on par with full-time workers. Regardless of how these metrics are presented from a public perspective, companies must have an internal basis for tracking the skills and work of every worker, despite their formal employment status.

By taking these steps, companies can fully empower all workers—to acknowledge their contributions, manage skill portfolios, and further invest in the success of the complete workforce.