2014 Workplace Trends: Building Competitive Advantage and Profitability with Contingent Talent

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Building Competitive Advantage and Profitability with Contingent Talent Savvy shift managers and supervisors with highly productive, well-trained teams have a solid foundation for operational success. But maintaining an excellent workforce over the long-term is challenging, especially when labor and retention costs factor heavily into an organization’s ability to compete and remain profitable. The key to hiring and retaining top employees often hinges on money, for both employers and employees, and employee loyalty can quickly diminish at the prospect of another organization’s higher paycheck. Randstad recently explored this issue in a survey of manufacturing and logistics professionals across the United States. When asked to rate which retention programs work best at decreasing turnover rates, over half of all respondents point to the power of the money, with salary increases deemed most effective. Each of the other highest-rated strategies reflect a component of “more money,” including the opportunity to advance within the organization, accessibility to healthcare benefits and the prospect of monetary bonuses. Survey respondents selected the following as most effective for retaining talent: 2014 Workplace Trends Salary increases Advancement opportunities Healthcare benefits Monetary bonuses Open-door policy Flexible hours 56% 42% 39% 35% 31% 28% However, when asked about their organization’s salary trends, a solid majority of manufacturing professionals state that employee pay has remained steady over the past year, with far fewer indicating salary increases. It is here at the confluence of labor costs and workforce retention that employers can utilize the benefits of a contingent workforce to boost competitive advantage and contribute to organizational profitability.

description

Savvy shift managers and supervisors with highly productive, well-trained teams have a solid foundation for operational success. But maintaining an excellent workforce over the long-term is challenging, especially when labor and retention costs factor heavily into an organization’s ability to compete and remain profitable. The key to hiring and retaining top employees often hinges on money, for both employers and employees, and employee loyalty can quickly diminish at the prospect of another organization’s higher paycheck. Read more here: http://randstad.us/1qEWKcd

Transcript of 2014 Workplace Trends: Building Competitive Advantage and Profitability with Contingent Talent

Page 1: 2014 Workplace Trends: Building Competitive Advantage and Profitability with Contingent Talent

Building Competitive Advantage and Profitability with Contingent TalentSavvy shift managers and supervisors with highly productive, well-trained teams have a solid foundation for operational success. But maintaining an excellent workforce over the long-term is challenging, especially when labor and retention costs factor heavily into an organization’s ability to compete and remain profitable.

The key to hiring and retaining top employees often hinges on money, for both employers and employees, and employee loyalty can quickly diminish at the prospect of another organization’s higher paycheck.

Randstad recently explored this issue in a survey of manufacturing and logistics professionals across the United States. When asked to rate which retention programs work best at decreasing turnover rates, over half of all respondents point to the power of the money, with salary increases deemed most effective. Each of the other highest-rated strategies reflect a component of “more money,” including the opportunity to advance within the organization, accessibility to healthcare benefits and the prospect of monetary bonuses.

Survey respondents selected the following as most effective for retaining talent:

2014 Workplace Trends

Salary increases

Advancement opportunities

Healthcare benefits

Monetary bonuses

Open-door policy

Flexible hours

56%

42%

39%

35%

31%

28%

However, when asked about their organization’s salary trends, a solid majority of manufacturing professionals state that employee pay has remained steady over the past year, with far fewer indicating salary increases.

It is here at the confluence of labor costs and workforce retention that employers can utilize the benefits of a contingent workforce to boost competitive advantage and contribute to organizational profitability.

Page 2: 2014 Workplace Trends: Building Competitive Advantage and Profitability with Contingent Talent

contingent employment

What percent of employees at your company are temporary or contract workers?

Most American companies find value in temporary or contract workers, with the vast majority saying they use some level of contingent workforce.

13%

18%

59%

50%

18%

21%

3%

7%

1%

2%

6%

2%

0%

0%

1%-10%

1%-10%

11%-25%

11%-25%

26%-50%

26%-50%

Over 50%

Over 50%

Not sure

Not sure

81% of all organizations use contingent workers

80% of manufacturing and logistics organizations use contingent workers

Overall responses

Manufacturing and logistics responses

% contingent workers

% contingent workers

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contingent employment

How will the Affordable Care Act (ACA) affect the U.S. labor market?

My company is increasingly using contract labor rather than direct hires.

When it comes to your contract labor force, co-employment issues are a high priority.

Overall responses Manufacturing and logistics responses

The ACA will impact my company’s workforce strategy/workforce mix 50% 39%

The ACA will increase the use of temporary/contract workers 48% 45%

We have yet to see the full impact of the ACA, but many hiring managers anticipate some effect on workforce strategy, including the use of contingent employees.

Over half (52%) of manufacturing and logistics organizations report an uptick in employing contingent workers over making direct hires. Nearly as many (51%) cite that co-employment issues rate as very important to their contract labor strategy.

yes

yes

52%

51%

Manufacturing and

logistics responses

Manufacturing and

logistics responses

Many companies using a flexible, scalable workforce gain a competitive advantage in that they can quickly adapt their operations to changing economic and market forces. The benefits of a contingent workforce, however, come with the responsibility to abide by co-employment rules, and enforcement of these rules is increasing. Employers utilizing contingent labor are well-advised to clearly understand and evaluate co-employment regulations before engaging temporary or contract employees.

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salary trends

About the Survey: Overall responses represent the findings from a poll conducted by the global research firm Ipsos. Manufacturing and logistics responses represent the findings of a Randstad online survey and in-person interviews. All sample surveys and polls may be subject to other sources of error including, but not limited to, coverage error and measurement error. Some figures have been rounded to the nearest whole number.

What are your company’s current salaries as compared to 12 months ago?

What are your company’s current salaries as compared to those of competitors?

62%

65%

15% 20%

34%

4%

66%

66%

11% 23%

27%7%

62%

65%

15% 20%

34%

4%

66%

66%

11% 23%

27%7%

About the same

About the same

Higher

Higher

Lower

Lower

Compensation has largely remained level over the past year, but an upward trend is noticeable, with approximately one-third (34%) of other industries and one-quarter (27%) of manufacturing and logistics professionals showing recent salary increases.

A majority of companies feel their salaries align with competitors’ pay scales. However 20% of other industries and 23% of manufacturing and logistics respondents say that their compensation lags behind industry norms.

Our survey data emphasizes the importance of salaries to successful employee recruitment and retention. Organizations may find substantial opportunity to bring on and keep the most qualified employees by assuring that their compensation packages meet or exceed local and industry standards.

Overall responses

Manufacturing and logistics responses

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in summary

The contingent option: Aligning labor needs with labor expense

Because labor needs tie so closely to fluctuating internal cost controls and competitive pressures,

the most effective employment strategies contain a component of flexible labor to allow for just-

in-time workforce contraction or expansion.

While a fixed line item clearly sets expectations of annual labor costs, it does not promote

workforce flexibility in cyclical markets or during periods of growth or decline, adjustments that

impact bottom-line profitability. Because of this, the trend toward organizational flexibility

and flexible employment is growing, and some predict that contingent labor could eventually

comprise up to 50 percent of the U.S. workforce

Optimizing the contingent option To make the most of a contingent workforce strategy, many shift operations utilize the expertise

of a staffing partner to handle all phases of recruiting, screening, hiring and onboarding. With

their industry knowledge and talent resources, recruiting specialists reduce time to fill, more

quickly move fixed employee costs to variable employee costs and provide a predictable cost per

hire. They can also generate additional savings related to replacement hires, unemployment and

workers’ compensation.

With the right talent management partner, an enterprise is more likely to optimize its contingent

talent investment. Randstad is ready to share its labor management expertise and talent resources

to help your organization improve its competitive edge and boost its bottom line.

*According to research conducted by the Aberdeen Group

Best-in-class companies that outsourced contingent labor management realized the following benefits compared to companies more likely to manage the process internally: *

40%savings on contingent labor

88%higher co-employment compliance rates

1.3xfaster time-to-fill rates

16xhigher cost-savings rates