Workforce planning is increasingly challenging for organisations. Political and economic uncertainty, allied to rapid technological advances, mean that future changes in the workforce can be difficult to forecast. Hiring organisations have to make difficult decisions about the constitution of the workforce. Which skills and services are core? Which roles are permanent, which are contract? Where can they rely on specialist consultants or freelance support? This is where strategic talent solutions come in.
Now, more than ever, organisations need to build a more agile, adaptable talent pipeline.
What is the difference between a contingent and permanent worker?
A permanent worker is hired directly by a company as an ongoing employee. They are paid by payroll, usually with taxes deducted from their salary in advance of payment. Permanent workers will often have a contract that includes company benefits, paid vacation, sick leave and other benefits such as insurance, healthcare and pension. There is no defined end date to their employment.
A contingent worker is usually off-payroll and hired for a specific need, project or period of time. This includes contractors, freelancers, gig workers and consultants. Contingent workers handle their own tax and organisations do not normally provide benefits. There is more flexibility for contingent workers, but they often have less job security. Legislation around employer obligations and employment rights for contingent workers can also be complex and varied.
Most organisations build their workforce with a combination of permanent and contingent workers. This gives them more elasticity in how they plan for growth and adapt to change.
What is the difference between MSP and RPO?
Building a workforce with a combination of permanent and contingent workers gives organisations more adaptability and flexibility. However, it also creates more challenges around classification of workers, compliance, pay and contractual consistency and workforce visibility. It is therefore important that TA teams, working with Procurement and HR, build structured processes for bringing different types of talent into the organisation.
Managed Service Providers help organisations ensure a compliant contingent workforce – correctly classified and managed consistently. Additionally, this includes support with contract issues, rates of pay, invoicing, and supplier management. An MSP may have some defined responsibility for direct hiring, but they will also manage the wider talent supply chain of agencies, providing the technology platform, reporting and hiring manager support needed to effectively manage recruitment agency performance.
Recruitment Process Outsourcing supports organisations needing to increase their capacity with permanent hires. This could be because they are ready to scale and need to fill more new roles than their existing internal team can deliver. An RPO will provide embedded recruitment support with the ability to improve time-to-hire and drive down cost-per-hire – as well as optimising candidate and hiring manager experiences.
How do MSP and RPO work together in a Total Talent Solution?
Total Talent Management brings both permanent and contingent hiring needs under the same governance framework. This offers employers visibility and reporting across their entire workforce, enabling them to effectively align their workforce planning with broader business goals.
When an employer needs to respond quickly to the changing needs of the business – whether that means scaling up or down at speed – they have more options at their disposal to change the pace of their hiring and fill open roles with different types of contingent workers. They can build direct channels to their talent communities more easily, engage with different types of talent early and secure the best talent, in the right areas of the business.
A Total Talent Solution means a single relationship for all of your talent needs – dedicated ownership, resourceful solutions, adaptable, innovative and strategic. Add in the power of emerging AI platforms, with the capability to automate many aspects of the recruitment process – and agile, enterprise-class talent management is now more and more accessible.
If you’d like to learn more about how strategic talent solutions can support your hiring strategy, get in touch with us here.