5 Workforce Management Theories
There are several powerful and dynamic forces that are disrupting organizations and driving them to be constantly finding new and more effective ways to manage their work-forces—not just to gain competitive advantage but, in some cases, to simply stay afloat. You can probably guess what forces I am referring to: global competition, aging population, global talent wars, demand for flexible working, relentless technological innovation, and of course the insatiable consumer demand for innovation, sophistication, customization, shorter times to market, round the clock servicing, and round the globe servicing. Its frightening!
But, let’s slow down and take a look at the sophisticated workforce management models that progressive organizations are adopting to help them build agile organizations that can react to, adapt to and negotiate the stormy, uncertain and relentlessly challenging external business and economic environment.
1. Contingent Workforces Management (CWM)
This is by no means a new theory and involves building an entire workforce of temporary staff, freelance workers, or contractors who can be hired or fired at a moment’s notice. This will give an organization flexibility and this model is perfectly suited to large, self-contained projects and is often seen in construction and the movie industry. The drawback of this model is that there can be reduced workforce stability and it is therefore not entirely suitable for businesses that operate on a continuous operational basis. This is why many businesses opt for a blended model of work-force management, as shown below.
2. Blended Workforce Model (BWM)
The BWM—which marries together permanent staff, consultants, independent contractors and contingent workers—is being increasingly deployed within today’s business world as it addresses an organization’s need for flexibility, agility and stability.
The problem with this model is that at the moment, survey’s suggest that about 16 percent of the firm’s workforce are temporary labor, which means it is big enough to have a negative impact if not managed correctly, but small enough to be overlooked and not managed correctly, which is often the case. This is why progressive businesses are beginning to use a Managed Service Provider—a staffing or outsourcing firm—to manage their contingent labor, as they yield better outcomes for the business.
3. Managed Service Provider Model (MSP)
MSPs include companies like staffing firms and business process outsourcing businesses that have expertise in either managing contingent labor or offering a flexible and scalable workforce. Surveys show that organizations that use MSPs have a 27 percent increased compliance to contingency labor law, 24 percent increased year-over-year cost savings and 23 percent reduced time-to-fill rates.
4. Functional Flexibility
The common factor in all the approaches so far is the focus on numerical flexibility, the ability to quickly increase or reduce numbers.
However, there is another kind of flexibility, which is extremely useful to an organization and that is functional flexibility, which is the ability for staff to move from task-to-task with limited disruption to the operational processes. It is a paradigm that we see reflected in certain sports, such as soccer ( fútbol for those in the UK), with the recent emergence of the utility player who can play in a range of positions as opposed to the dedicated specialist who can play in one position. It gives the squad great flexibility that can provide a competitive edge for the team.
One drawback of functional flexibility is that moving from role-to-role can be more emotionally challenging and must be managed carefully to avoid burnout.
5. Multi-Generation Workforce Management, (MGWM)
In HR terms, MGWM is at the bleeding edge of HR theory to the extent its not really in the text books because it really only just started happening. For the first time ever, we have four generations working alongside each other in the workplace: Veterans, Baby Boomers, General X and Generation Y. Organizations must develop strategies to both attract, motivate and engage a multi-generational workforce and to encourage collaboration between the generations. A multi-generational workforce, if managed effectively, can provide a business with increased flexibility, broader experience and skill sets, more innovative approaches and new perspectives.
In order to negotiate the uncertain modern business environment, corporations must adopt workforce management models that provide organizational agility and can make best use of the multi-generational talent pool present both in the workforce and in the candidate market place. Businesses that are most effective at achieving this are likely to gain real traction and subsequent competitive advantage.