Transforming The Contingent Workforce Ecosystem Into A Competitive Advantage Flight Deck @ Graybar Building * July 13, 2016 * #PrideOne
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Transforming The Contingent Workforce Ecosystem Into A Competitive Advantage
Flight Deck @Graybar Building
*July 13, 2016
* #PrideOne
Speakers
Kate Goss
Bryan Peña
Noah Gold
Kelly Shea
Jim Lanzalott
o
Bryan PeñaSenior Vice President, Contingent Workforce Strategies
Staffing Industry Analysts
#PrideOne
SIA Products and Services by Audience
A Balancing Act: The Roles and Challenges
of a Contingent Workforce Program Manager
CCWP
CWS Council Members (partial public list)
Workforce Solutions Ecosystem
Source: SIA
Contingent Work Demand SupplyPa
yrol
l $Demand Level
Traditional WorkforceIdle/
Layoffs
Traditional Workforce
Time©2016 by Crain Communications Inc. All rights reserved.
Employees– Full time or part time – Apprentices, trainees, and paid interns
Non-Employees– Temporary workers– Independent contractors or consultants/freelancers– Online workers (e.g. micro tasks, crowdsourced, etc.)– Professional services (e.g. management consultants, lawyers)– Outsourced services (e.g. security guards, maintenance)– Partners (e.g. supply chain, partnerships, joint ventures) – Formal and informal volunteers (e.g. self-service customers) – Franchisees/affiliates/associates (e.g. marketing, sales activities, etc.) – Robots/drones/cognitive computing applications
Future of Workforce Management
©2015 by Crain Communications Inc. All rights reserved.
Firms Use a Wide Variety of Non-EmployeesBased on what you know, which of the following types of ‘workers’
did work on behalf of your company/organization during 2014?
Source: Staffing Industry Analysts, Global Total Talent Management Survey, May 2015
Contingent Workforce Program Maturity Model
Source: SIA
Global Staffing Market Spend Over $400bn in 2015
Source: SIA
Staffing markets are to scale
Source: SIA
Contingent Work $3.1 trillion in 2013
Growth in capture of SOW spend MSP SOW management expanding to include strategy consulting contracts as
well as large service contracts Moving from a supplier management focus to predictive sourcing,
supported by investments in analytics Approx 50% of MSP vendors are currently investing in analytics
Growing investments in talent consulting teams to complement traditional service offerings
Increasing Freelancer Management System (FMS) platform integration as well as worker tracking solutions
Traction of ‘Contingent RPO’ programs Insourcing of mature programs Emergence of Total Talent Management solutions
MSP Trends
MSP by Region
Source: SIA 2015 VMS and MSP Supplier Competitive Landscape
Sourcing Decisions Across Work Types Becomes more Sophisticated as Visibility Improves
How will the following employee types change as a share of your total labour force over the next ten years?
Temporary agency workers are not regarded as a first preference
N=196 (International results)
Source: SIA
StrategicWorkforcePlanning
Traditional Employees
Recruiters, Direct Hire, RPOManaged By: HR
Outsourced ServicesContingentTemps, IC & SOW
Agencies, MSP/ VMS, Direct IC’s
Consulting & Outsourcing Firms
Managed By: HR and/or Procurement
Managed By: Procurement
Other Non-Employed Workers
Online Staffing, Offshore ProvidersManaged By: Various Departments
© 2016 Crain Communications Inc. All rights reserved.
Decisions Made in Silos
StrategicWorkforcePlanning
Traditional Employees
Recruiters, Direct Hire, RPOManaged By: HR
Outsourced ServicesContingentTemps, IC & SOW
Agencies, MSP/ VMS, Direct IC’s
Consulting & Outsourcing Firms
Managed By: HR and/or Procurement
Managed By: Procurement
Other Non-Employed Workers
Online Staffing, Offshore ProvidersManaged By: Various Departments
© 2016 Crain Communications Inc. All rights reserved.
StrategicWorkforcePlanning
Decisions Made in Silos
Evolution of Procurement Models Supporting Talent Outcomes
Source: SIA
Evolution of a Program: 2015
Decentralized• Several suppliers• Procurement done on an
ad-hoc basis• Management done
internally
Master Vendor• One supplier
(possibly managing 2nd and 3rd tier suppliers)• One point of
contact• Direct cost
savings on bill rate and usage• Customized SLA’s
and process
Managed Service Provider (MSP) • Contingent workforce
spend under management• One contact point • Direct cost savings on
bill rate/usage• Customized SLA’s and
process• Non-compliant spend
elimination• Total cost of ownership
savings
Total Talent Management • Total workforce spend
under management• Complete workforce
visibility• Direct cost savings on
bill rate and usage• Customized SLA’s and
process• Non-compliant spend
elimination• Increased total
cost of ownership savings
• Additional productivity and process savings
• High degree of value added services
CW as a Strategic Competitive Advantage• CW talent as
business differentiator• Management
strategies move beyond tactical considerations into strategic ones• Combination of
multiple CW models to solve complex business problems.• Technology crosses
multiple platforms in the enterprise• Risks managed on a
total enterprise basis with big picture focus on risks of action and inaction
Preferred suppliers• Selective set of
suppliers selected• Contracts in place• Service level
agreements (SLA’s) in place
Procurement HR
What Does TTM Look Like?
Technology
Work Outside the Building
Work Inside the Building
Tem
pora
ry W
orke
rs
Part
ners
(Sup
ply
Chai
n Pa
rtne
rshi
ps, J
oint
Ven
ture
s)Fo
rmal
/Inf
orm
al
Volu
ntee
rsFr
anch
isees
/Affi
liate
s
O
ther
Non
-Em
ploy
ees
Exit Management
Identify
Attract
Engage
Retain
Exit
TTA
TTM
Inde
pend
ent C
ontra
ctor
s/
Free
lanc
ers
Prof
essio
nal S
ervi
ces/
SOW
Cons
ulta
nts (
proj
ect-b
ased
)On
line
Wor
kers
(e.g
. Micr
o
task
s, Cr
owds
ourc
ing)
Out
sour
ced
Serv
ices
(o
ngoi
ng o
pera
tiona
l wor
k)
Robo
ts/D
rone
s/
Artifi
cial I
ntel
ligen
ce
Source: SIA
Decentralized• Several suppliers• Procurement done on an ad-
hoc basis• Management done internally
Master Vendor• One supplier (possibly
managing 2nd and 3rd tier suppliers)• One point of contact• Direct cost savings on bill
rate and usage• Customized SLA’s and
process
Managed Service Provider (MSP) • Contingent workforce spend
under management• One contact point • Direct cost savings on bill
rate/usage• Customized SLA’s and process• Non-compliant spend
elimination• Total cost of ownership savings
Total Talent Management • Total workforce spend
under management• Complete workforce
visibility• Direct cost savings on bill
rate and usage• Customized SLA’s and
process• Non-compliant spend
elimination• Increased total
cost of ownership savings• Additional productivity and
process savings• High degree of
value added services
CW as a Strategic Competitive Advantage• CW talent as business differentiator• Management strategies move beyond tactical considerations into strategic ones• Combination of multiple CW models to solve complex business problems.• Technology crosses multiple platforms
in the enterprise• Risks managed on a total enterprise basis with big picture focus on risks of action and inaction
Preferred suppliers• Selective set of suppliers
selected• Contracts in place• Service level agreements
(SLA’s) in place
Evolution of a Program: 2016
Procurement HR
Contingent Workforce Program Maturity Model
Source: SIA
About Russell Tobin
Direct hire & contract staffing firm
We focus on a variety of verticals
9 offices throughout the U.S.
The Supplier Perspective
Structured program which allows flexibility Clear metrics and SLA’s Consistency in communication Aligned with best practices
Value of working with an MSP
Enterprise clients Specialization Leverage technology “Recession proof”
Legal Issues Involving Contingent LaborAssessing the Legal Landscape and How to Best Mitigate Risk
Employee v. Independent Contractor ClassificationThe DOL’s Crusade Against Misclassification
Employee v. Independent Contractor
In September 2015, David Weil, Administrator of the Wage and Hour Division of the United Stated Department of Labor, issued an “Administrator Interpretation,” wherein he stated bluntly: “[M]ost workers are employees under the FLSA’s broad definitions.”
Summary of the AI’s Views The AI represents an effort to dramatically expand the
“economic realities” test. Any business that uses independent contractors exclusively
or to receive services that are important to its success should review the AI and consider carefully how the Wage and Hour Division and Courts applying the “Economic Realities” test would view independent contractor relationships.
Risks of Misclassification Liability for any failure to pay at least the minimum wage for
all time worked, Liability for any failure to pay overtime for work in excess of
40 hours per week, Reimbursement of employee expenses, Provision of various employee benefits, Withholding of income taxes and FICA, Payment of unemployment insurance contributions, and Provision of workers compensation insurance coverage.
Looking Ahead The DOL has made it clear of its stated intent to aggressively
challenge independent contractor classifications. In light of the policy changes and a promised ramp-up in
investigations/enforcement, it has become riskier for any individual worker to be classified as an independent contractor.
Recent cases: Uber, Lyft, GrubHub, FedEx.
Exempt v. Non-ExemptAnother Classification Question
FLSA ExemptionsEmployees are considered “exempt” from receiving overtime pay if they meet the salary threshold (***) and fall under one of the following “white collar” exemptions:
Executive – managing enterprise/department of enterprise; hiring/firing power Administrative – office/non-manual work involving discretion and independent judgment
involving significant matters Professional
Learned Professional – work requiring advanced knowledge in a field of science/learning and customarily acquired by prolonged course of specialized intellectual instruction (e.g., attorneys, doctors, accountants)
Creative Professional – work requiring invention, imagination, originality or talent in recognized field of artistic or creative endeavor
Outside Sales – making sales/obtaining orders or contracts away from employer’s place of business
Computer – computer systems analyst, computer programmer, software engineer or similarly skilled worker
*** New FLSA Salary Threshold The current salary threshold to be exempt from the FLSA
overtime regulations is $455/week ($23,360/year). In May 2016, the DOL announced that, effective December 1,
2016, the threshold will become $913/week ($47,476/year). This threshold will also now be increased every three years to
keep up with inflation, beginning on January 1, 2020. Non-discretionary bonuses and incentive payments (including
commissions) can satisfy up to 10% of the new threshold.
Joint EmploymentThe Browning-Ferris Decision and the New Joint Employer Standard
The NLRB’s Browning-Ferris Decision
In August 2015, the National Labor Relations Board (the “NLRB”) overruled 30 years of joint employer precedent in its decision it published in the Browning-Ferris Industries of California, Inc. matter.
In summary, the NLRB announced that it will no longer require direct and immediate control over terms and conditions of employment to establish a joint employer relationship.
The New Joint Employer Test In analyzing whether a joint employer relationship exists, the NLRB
stated that a case-by-case, fact-intensive evaluation of the allocation and exercise of control in the workplace must be performed.
In finding that Browning-Ferris Industries (“BFI”) was a joint employer with its subcontractor, Leadpoint, the NLRB relied on the following factors:
Hiring Wages Discipline Supervision
What’s Next? In January 2016, BFI appealed the NLRB’s decision to the U.S.
Court of Appeals in Washington, D.C. Several organizations joined BFI’s appeal with supporting briefs
of their own. Per the Court’s Order entered on June 22, 2016, final briefs will
not be filed until October 19, 2016.
Mitigating Joint Employment Issues
Parties should work with each other at the contract stage to carefully spell out the allocation of responsibility and risk.
Indemnification – allocates obligations when third party claims arise Equal Employment Opportunity – both parties’ responsibility ADA compliance – both parties’ responsibility Wage and Hour/Benefits – agency’s responsibility; though agency
should ensure that clients: (1) understand applicable overtime requirements; (2) do not allow “off the clock” work; and (3) sign off on worker time sheets.
Background/Credit Checks/Immigration/I-9 Compliance – agency’s responsibility
The Affordable Care ActAnd Its Implications on Contingent Labor
What the Law SaysThe Affordable Care Act (the “ACA”) requires companies to offer affordable minimum essential healthcare coverage to 95% of their employees.
Mitigating Risk Again, clients/agencies/MSPs should ensure proper risk
allocation at the contract stage so that proper protections are given to clients.
Suppliers should undertake responsibility of offering affordable, minimum value healthcare to all its employees and to provide notice about the insurance marketplaces.
Agreements can also provide that both parties view the staffing agency as the common law employer and provide appropriate protections to clients even if they are found to be an employer in a legal proceeding.
Best PracticesSimple Tips in Handling Contingent Labor
Best Practices Clients should work with high quality staffing firms that are
well-versed in the industry and have demonstrated superior management of a contingent workforce.
Create clear and articulate contracts that define the relationship and responsibilities of the parties.
Periodic communication between the client, staffing firm and workers.
Review information on temporary workers on the EEOC and ADA websites.
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