Contingent workforce is a group of employees or workers recruited in an organization on a non-permanent or contract basis (Ackers & Wilkinson, 2003). These employees are mostly outsourced by an organization as a result of rapid growth within an industry which requires quick responds to changes in an effort of maintaining the competitive advantage that an organization has over its competitors. The changes to be effected may include change of employees. Their importance are in giving of professional or expertise information that is critical in the designing of strategies aimed at fostering the growth and development of an organization that is faced with steep competition (Brooks, 2009). The engagement of an organization ion the recruitment contingent workers may be aimed at the reduction of employee benefits and retirement costs that could otherwise be high. Consequently, the organization reduces the overall costs with the realization of maximized profits and improvement of production efficiency. The contingent workforce comprises temporary-help workers, in-house temporaries and independent contractors, who might be retained by the organization to offer specialized skills or techniques (Cheng-Ping, 2009).
The management process of the workers may prove difficult and expensive to an organization if proper strategies are not formulated to guide the process (Foot & Hook, 2008). It is thus, important for an organization to employ the strategic approach of contingent workforce management which aims at reduction of the risks associated with contingent employee recruitment and the management costs. The management of contingent workforce may employ the use of either unutarist or pluralist approach depending on the organizational structure. Unitarist approach is a better strategy for an organization whose business operations are on the global basis (Brooks, 2009). This is because of the increase changes in the business environments which require the recruitment of employees on contract basis to aid the organization in the realization of cost-efficiency. This management approach may also be applied to other local industries in order to aid them in gaining their competitive advantage. The use of contingent workforce has been critical in the making of organizational adjustments related to employment levels and costs since these employees may be recruited into the company only when their expertise or labor is needed. In spite of the benefits of employing contingent workforce, an organization is forced to incur high training costs in addition to having its organizational culture and core morale disturbed (Brooks, 2009).
Individualism or unitarism management approach focuses on the employment of a human resource manager (HRM) to oversee the process of recruitment and training of the workforce and in the designing of other managerial policies to act as guide in the pursuit of success (Keith, .2008). This implies that the organizational function of managing contingent workforce is left to the HRM who shapes the structural system in fostering unity between the organization and its employees. This system of management allows direct communication from the HRM to the employees in an effort aimed at achieving the organizational goals. This strategy develops a great organizational culture which focuses on the employee development as well as improved efficiency through increased employee commitment as a means of achieving mutual interest between the organization and its employees. Under this strategy, the organization’s top management is charged with the development and management culture since they are regarded as the founders and major stakeholders (Brooks, 2009). This means that the top management issues directions to guide in the implementation of the business strategies to order to achieve the set goals or objectives. This management strategy becomes handy in the management of contingent workforce since it allows for the communication of the organizational goals and culture to aid in the development of strategies that will foster the achievement of an organizational competitive advantage in a changing environment (Keith, .2008).
The HRM is charged with the duty of recruiting and training the contingent workforce. Since these workers are outsourced by the organization, it is important that they poses the required talents and expertise to foster the development of the right marketing strategies. This is an important aspect of individualism approach since it reduces the management and training costs (Foot & Hook, 2008). This also allows the development of excellent communication network within the organization as the top management receives all the necessary information that guide in the analysis of the environmental conditions within and outside the organization. This information is of importance in decision making, especially in selecting the right professionals or expertise into the firm. Cost-efficiency within an organization is achieved since the management is able to address major issues at an appropriate time (Cheng-Ping, 2009).
Pluralist (collectivism) management approach, on the other hand, is a personnel management strategy which entails the organizational use of personnel managers whose functions will be to adjust the organization to fit its changing environments, ensuring that all stakeholders conform to the organizational and external cultures, employee welfare and in the creation of employee loyalty to the employer (Budd & Gomez, 2004). The personnel managers are charged with the duty of managing a group of workers working under them in a move aimed at improving efficiency within the organization. The provisions in this strategy allows each manager to recruit and organize for train of the contingent workers as a means of fostering the understanding of the organizational culture (Keith, .2008). This strategic approach is aimed at improving the production efficiency and justice to the workforce on matters related to their welfare and working conditions. The underlying reason for this move is to foster the employee individual and collective contributions towards the organizational success. Under this approach, the organizational culture is developed to foster its performance (Cheng-Ping, 2009).
The advantage of the unitarist over the pluralist management approach is the development of HRM policies and practices that guide the recruitment and training of contingent workers to avert cases of conflicting interests (Keith, .2008). In contrast, pluralistic approach presents conflict of interests between the stakeholders and thus hinder the application of this management strategy in the recruitment and training of contingent workforce. The managerial policies are the factors explaining this conflict of interest as they are geared towards long-term development and welfare of workers. Moreover, the changes in the global market which calls for flexibility of organizations in their operations and the employee-loyalty to employer heighten the unsuitability of this managerial approach (Brooks, 2009). Instead, individualism approach is favored as its policies are geared towards capitalization of human resources through the development of talents and the subsequent personal development. This means that the organization is able to avert workforce management risks while utilizing the services of talented individuals in the improvement of its efficiency and thus success. The setting of these policies on employees and work serves as guidelines in the running of business operations on the global sphere (Cheng-Ping, 2009).
The recruitment process will involve the selection of talented employees and experienced employees into the organization on long-term services (Keith, .2008). However, those individuals, who may have specific skills and experience that may be required in the firm for only a short time are employed on short-term basis. This recruit and selection process enables the organization to capitalize on the available workforce in an effort of meeting its missions and goals. The outsourcing of employees will enable the organization to reduce the high cost of training which it could offer to its existing employees in responds to the changes in the market. This happens in cases where the organization is planning a short-term project but which may require the application of some skills which are lacking in the organization. Since the HRM strategy is focused on capitalizing on its employees the organization would minimize its operational costs by outsourcing employees instead of incurring the high costs of training on short-term projects (Cheng-Ping, 2009).
Since the contingent workforce is outsourced based on their expertise and talents, an organizational expenditure on employee training will be greatly reduced (Ackers & Wilkinson, 2003). However, for the organization to utilize contingent workforce it should organize for some training on the specific areas of interest and in communicating the organizational culture and missions to help in guiding employees on the understanding of their job specifications. This will also help the workforce in the development of their careers and thus increased productivity and efficiency at work. The HRM policies on the training and development of employees tend to cultivate a working culture among the employees since their morale is greatly boosted by their realization of personal development (Keith, .2008).
The training of these workers is a strategy aimed at the improvement of production efficiencies and the development of superior goods and services that will enable the organization to control a bigger share of the market by commanding customer loyalty. This will also help in the building of the organizational reputation as workers will access justice as they will receive good remunerations as well as work under excellent conditions. The experience that the contingent workforce will have as a result of their employment in different organizations will foster their development and expertise in their fields. Some employees may however spend much of their careers in an organization without developing their careers as a result of lack of proper training programs. This also means that an organization might fail to recognize the services of some of its employees (Budd & Gomez, 2004).
The employment of contingent workers is of paramount importance to an organization as it fosters the realization of cost-efficiency and improved efficiency. However, this process may prove expensive to the organization because of the high recruitment, training and management costs. The adoption of proper management strategy, especially the unitarist approach, by an organization will improve the utilization employees with the realization of low labor costs. Challenges arising from the short-term recruitment of employees include company instability and employee dissatisfaction which may be viewed from justice angle. This is a situation where an employee fails to appreciate the organizational and HRM policies and thus reduce their production efficiency.
Ackers, P. & Wilkinson, A. (2003). Understanding Work and Employment: Industrial Relations in Transition. Oxford [u.a.]: Oxford Univ. Press, pp. 209-213.
Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation. 4th ed. New York: Prentice Hall, 99-100.
Budd, J. & Gomez, R. (2004). Why a Balance is Best: The Pluralist Industrial Relations Paradigm of Balancing Competing Interests. Industrial Relations Research Association. Retrieved from: http://www.legacy irc.csom.umn.edu/faculty/jbudd/research/buddgomezmeltz.pdf
Cheng-Ping, C. (2009). Individual Characteristics, Organizational Justice and Job Attitudes of Employees under Non-standard Work Arrangements: Study of Employees of International Tourist Hotels. International Journal of Management. Vol. 26(2).
Foot, M. & Hook, C. (2008). Introducing Human Resource Management. 5th ed. Harlow, England; New York: Prentice Hall/Financial Times, pp 133-35.
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Keith, A. (2008). Managing Human Resources: contemporary perspectives in New Zealand.3rd ed. Australia: McGraw-Hill, pp234-241.