WINNING THE WAR FOR TEMP TALENT

Transcription

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2 WINNING THE WAR FOR TEMP TALENT How to Reduce Costs, Improve Quality & Stay Compliant 2

3 About the Presenter Bill Inman CEO & Founder 18 years as executive and entrepreneur in the human capital and temporary labor industry: Board/Executive, HR Tech & Workforce Mgmt Employer of Record Company Founder MSP/VMS Executive Applicant Tracking System Founder Former Staffing Company Owner linkedin.com/in/billinman billinman.com/gig billinman.com/gig 3

4 Presentation Overview Temp labor and the Gig Economy have become critical components of the U.S. labor force, and are expanding rapidly However, utilizing the services of temps, contractors & on-demand services is more complex and costly than ever. This presentation covers: The Growth of the Gig Economy Recruitment Challenges for Contact Centers Temp and Gig Recruitment for Contact Centers Gig Workforce Compliance Best Practices & Compliance Solutions 4

5 Disclaimer Nothing on this presentation is intended to create any contractual or other legal relationship between the presentation viewer, Bill Inman, PeopleLoop, or any of PeopleLoop s staff, and should not be construed as legal advice or professional opinion for handling a specific factual situation. PeopleLoop or Bill Inman cannot guarantee or warrant the accuracy or completeness of information in this presentation any way. Presentation participants and readers should not act upon any information from this presentation without consulting with the appropriate legal, financial, or other business professional for guidance and advice. 5

6 Growth of the Gig Economy 6

7 The New Labor Revolution 1916 Work Performance, Utilization, Arrangement & Macro Factors

8 Gig Economy Work Arrangements % of the employed in alternative work arrangements Sources: Bloomberg (2015), Labor Department (1995, 2005); Alan Krueger of Princeton and Lawrence Katz of Harvard (2015) 8

9 Global Gig Economy Growth 9

10 Orgs with Workforce >50% External Talent Source: CGMA New Ways of Working Survey,

11 Global Gig Spend Source: Uneven Geographies of Digital Wages Oxford Internet Institute, University of Oxford 11

12 Contact Center Recruitment Trends 12

13 Contact Center Recruitment Trends Contact centers continue to grow in size & strategic importance Contact Center Volume Expected to Grow Contact Center Leaders & CXO are Accountable for Customer Experience Employee Satisfaction & Engagement Important Source: Deloitte 2015 Global Contact Center Survey 13

14 Increased Demands for Diverse Skill Sets 14

15 More Talent Already Employed Unemployment Rates by Education Source: Bureau of Labor Statistics 15

16 Contact Center Staff Turnover National Turnover Average All Position Types & Industries 16.4% Sources: Deloitte 2013 Global Contact Center Survey, BenchmarkPro 16

17 High Turnover Costs The average contact center turnover costs $6,440 per person Recruiting cost = Campaign to hire 20 employees $ 5,000 Hiring cost = (40 HR hours (2 per $20/hour) $ 800 Hiring cost = (60 call center hours (3 per $20/hour) $ 1,200 Training cost = (5 sessions x 80 $20 trainer cost) $ 8,000 Training cost = $500 per person) $ 10,000 Unproductive training time = (3 wks paid time x 20 $12/hr) $ 28,800 Supervisory time = (10 add l hours per $ 3,000 Overtime costs = (25 days x 8 hours x 20 x 1.5 rate) $ 72,000 Total Hard Cost of Turnover (20 EE) $ 128,800 Per Person Turnover Cost $ 6,440 17

18 Effective Contact Center Recruitment 18

19 Competitive Compensation Median U.S. Hourly Contact Center is $12 & Average U.S. Raise 3% in 2016 Manufacturing and logistics: Electromechanical technician: 9.29% Assistant plant manager: 8.05% Maintenance manager: 6.65% Information Technology: Network engineer: 7.21% Software engineer: 5.48% Project manager: 3.87% Engineering: Electronics/computer engineer: 8.31% Mechanical engineer: 7.38% Quality engineer: 7.36% Office and administration: Office manager: 6.68% Call center Rep General: 4.55% A/R Supervisor: 4.50% Source: Randstad, Staffing Industry Analysts, Payscale 19

20 Recruiting Locally Limited by Commute For Typical Bricks and Mortar Contact Centers 80% of workforce within a 20-minute drive 95% of Agents Drive Less Than 30 Minutes to Work Source: Site Selection Group 20

21 Alternative Arrangements as Recruiting Hub-and-Spoke Model Tool Virtual Model Flexible Scheduling Work-from-Home option for top performers or new talent with a long commute True Work-from- Home Agent Model Allowing employees to manage time in the manner best for them Source: Site Selection Group 21

22 Gig & Temp Labor to Meet Talent Demands Since 47% of contact centers have 10% to 100% annual turnover and recruiting locally is limited, sourcing gig workers makes sense. The majority of contact center workers (aged between 20-34) stay only about one year. A Temp or Contractor would typically be someone who expects to work a contract of between 4 18 months Therefore, it make sense to hire temp and gig economy workers to reduce turnover costs and provide the company faster access to talent. 22

23 Gig Economy Contact Center Source: Deloitte 2013 Global Contact Center Survey 23

24 Gig Economy Worker Characteristics Source: Intuit 24

25 Reducing Temp & Gig Labor Costs 25

26 Temp/Contract vs Direct Hire Cost Savings 92% Companies that Believe Using Temp Labor Saves Money 9% Median Savings Over Direct Hire Source: Staffing Industry Analysts 26

27 Cost Savings Reasons Reduced hiring costs Lower training costs Reduced statutory employer burden Reduced administrative HR tasks Reduces need for severance pay Not paying for down time 27

28 Traditional Staffing Options & Costs Staffing Vendors Outsourcing Service Providers Self-Sourcing Contract Workers Indep. Contractor / 1099 SOW Project- Based Workers Internal Resources Alumni & Previously Used Workers Referrals 40% Markup ~10% Markup Milestone Payments ~25% Markup *Markups are generally charged on the pay rate of each worker 28

29 Self-Sourcing Temp & Contract Labor Leverage Existing Recruiting Resources Utilize Company Alumni and Previously Used Resources Ask for Internal Referrals Engage Project Based Recruiters Create Your Own Talent Community for Gig Economy Workers 29

30 Gig & Temp Labor Compliance 30

31 Co-Employment When the company that utilizes the contract worker s services ( client ) manages the workers on a day-to-day basis they often become a co-employer or joint employer along with the supplier of the contract worker. Co-employment could mean that the client company may be held liable for the decisions and mistakes of the staffing vendor and vice versa It is common to see both clients and providers of temporary staffing both identified as defendants. -Staffing Industry Analysts 31

32 Staffing Buyers Increased Liability In CA Client & Supplier Liable for payment of wages and/or failure to provide workers compensation coverage. Other states are likely to follow 32

33 Worker Classification Wage & Hour Issue: An investigation by the U.S. Department of Labor s Wage and Hour Division found that a call center misclassified hundreds of call-center agents as independent contractors rather than employees, and subsequently denied them minimum wage and overtime for hours they worked, in violation of the Fair Labor Standards Act. The firm also failed to pay employees for time spent in training, creating additional violations of the FLSA. The company has reclassified all call-center agents as employees and will pay $101,491 in back wages for minimum-wage violations to 435 employees plus $48,893 for unpaid overtime due to 165 employees. Lessons: Ensure that the temp and contract workers your company uses are classified exempt/non-exempt correctly by their employer. Audit or monitor the employer of the workers to ensure they are compliantly meeting Wage & Hour law requirements. 33

34 Worker Classification Wage & Hour Wage Theft in the Contact Center Space is an increasing problem. Many companies & 3rd party providers do this unknowingly. Improving education and reviewing best practices is essential. 34

35 Contact Center Wage Theft Lawsuits A worldwide hotel brand settled with 2,645 current & former Call Center employees for $715,000 in back pay & overtime wages. Leading U.S. Insurance Company agreed to pay more than $1.5 million in back pay & overtime wages to nearly 3,500 Call Center employees after federal authorities accused the company of significant and systematic violations of overtime and record keeping rules. Midwestern technology company recently settled a class action lawsuit for around $320,000 at two Spokane, WA Call Centers. Employees alleged they were not paid for work until the time they took their first phone call - but were required to spend 15 minutes logging into computer programs that were required to handle the phone calls. A large computer services company agreed to pay $4.5 million to settle allegations that their Call Center employees were not properly paid for hours they worked. Among the claims were that employees often spent time before shift searching for an available computer terminal or headset or waiting for passwords.

36 Temp & Gig Workforce Best Practices 36

37 Compliance Best Practices. Solutions to mitigate temp and gig workforce risks, include: Supplier Qualification Processes Sourcing & Selection Considerations Enhancing Supplier Agreements Defined Internal Policies 37

38 Workforce Supplier Qualification Go. through a formal supplier qualification process to: Ensure financial stability of the supplier AND that they hold the proper insurance. Make sure the Supplier has documented human resources and safety policies (ideally outlined an employee handbook). Perform supplier reference checks. Ask the supplier to provide documentation about their payrolling and employer policies. 38

39 Worker Sourcing & Selection When sourcing contingent workers consider: Clearly defining and documenting the assignment description for worker and supplier. That suppliers should screen (and perform background checks when appropriate for) the worker. Hiring workers with sufficient skills to perform the required tasks and who do not require general training. 39

40 Supplier Agreement Defined supplier agreements may help limit risk: Consider moving away from timecard agreements. Clearly outline responsibilities of each party. Identify proper insurance limits in agreement. Ensure proper indemnification in place. Complete a Statement of Work for each new assignment. Consider consolidating gig employment under one company 40

41 Internal Workforce Best Practices Clients should mention exemption of temp/contract workers from regular employee benefits in employee handbook. Educate the managers who use temp/contract labor on procedures: - Discontinuing Assignments - Performance Communication - Disciplining Workers Develop an internal temp/contract worker best practices manual. 41

42 Further Limiting Workforce Risks The staffing supplier should have established procedures for accidents. Clients should provide worksite specific safety training for all newly on-boarded workers. Performance and disciplinary communications to the worker should be made by the supplier. Injuries should be recorded in accordance with OSHA regulations. 42

43 Presentation Summary The Gig Economy and temp labor is growing fast and is probably part of your company s workforce strategy. This workforce can be a great supplement to your internal direct hire contact center workforce if recruited and utilized effectively. Much of this workforce is provided and employed by traditional staffing and virtual solutions (on- and off-shore). Companies must be strategic about compliance because of regulations and co-employment. Mitigate workforce risks and reduce costs by wisely selecting and monitoring both internal best practices and the best practices of your vendors. 43

44 For attending this session. Please remember to fill out your evaluation forms! Bill Inman linkedin.com/in/billinman billinman.com/gig 44