Adopting total talent management comes with its own set of challenges. CEIPAL’s CEO Sameer Penakalapati discusses 3 critical challenges that could impact your plans. Â
In the next two years, 58% of companiesOpens a new window are planning to adopt total talent management (TTM). TTM is a labor management program in which companies proactively consider all options for engaging, acquiring, and managing every type of talent, including employed and non-employed workers.
It’s not hard to see why so many are jumping on the TTM train. Those who do are twice as likely to identify non-employed workers as a competitive advantage. By connecting organizations with the market’s best talent – including full-time employees, contractors, freelancers, consultants, and other non-full-time employees – TTM programs can provide companies a significant return on investment.
According to a Randstad Sourceright survey, 96% of companiesOpens a new window employing TTM strategies are “extremely satisfied†or “very satisfied.†To tap the best talent in sectors facing workforce shortages, new hiring processes must be considered to engage non-permanent workers. This is where a TTM strategy can truly shine.
What Are the Challenges in Implementing a Total Talent Management Program?
Despite the obvious benefits of this strategy, only 15% of companiesOpens a new window believe they have the tools necessary to implement a total talent management program successfully. Why?
There are three major hurdles that any organization hoping to implement TTM must overcome.
1. Silos within businesses
According to Staffing Industry Analysts (SIA), 75% of businesses cite organizational silos Opens a new window and bureaucratic complexity as the single biggest barrier to implementing TTM.
The typical scenario works something like this: Division A of a company hires a contractor at $50 per hour. After the project ends, Division A doesn’t need that contractor anymore, so they simply let them go. Six months later, Division B of that same company needs a contractor with the same skill set. The same contractor applies but raises their rate to $80 per hour, citing previous experience with the company. Division B hires them for this rate, and the cycle continues.
The problem is that is Division B had no idea that Division A hired that exact same contractor at a rate that was 30% lower. If Division B had known, they could have reached out to the contractor, perhaps offering a slight raise on their previous rate and secured the talent more efficiently. Instead, Division B underwent a lengthy hiring process, only to hire the same contractor at a higher rate.
Learn More: Smarter, Faster, Better: The Digitization of Contingent Workforce Management
2. Lack of data
SIA found that for 46% of companies, “lack of dataâ€Opens a new window was the biggest inhibitor to adopting TTM. In this case, “lack of data†means an inability to see what talent is out there. Hiring agents need data that can answer the following key questions:
- What kinds of jobs can be outsourced, and at what market rate?
- How can hiring managers conduct background checks or verify work experience?
- How can recruiters even begin to look for qualified freelance talent on the market today?
Processing this amount of data is a huge job, as you can imagine. So, many companies considering TTM decide it’s simply not worth it to burden their teams with that task.
But think of where that data originates. Some of it lives within your existing databases. However, the most advanced applicant tracking system (ATS) not only aggregates your data but also augments it and makes it actionable by leveraging user-friendly reporting modules.
3. Lack of buy-in
Even with the radical changes our workforce has undergone due to COVID-19, a fear of change persists. And this fear of change is a major deterrent for companies thinking about TTM. In fact, according to the same SIA report referenced above, some 36% of companies say that fear of organizational/management changes Opens a new window prevents them from seriously considering TTM.
Meanwhile, 39% of companies say that they can’t make a business case compelling enoughOpens a new window to convince C-suite executives to adopt this strategy. This lack of buy-in from managers and C-suite executives will often leave your correct notion to implement TTM dead in the water.
Learn More: 3 Ways Workforce Management Systems Improve Your Company’s Budgeting Process
So, What’s the Solution?
Well, there’s no question that switching to TTM will be a significant shift for most companies. But the good news is that every single one of the above challenges can be solved with advanced technology.
Vendor management systems (VMS) provide open communication between departments and afford direct access to supplier rates and qualified candidates. A next-gen VMS can help clarify your contingent spend, centralize and streamline your statement of work (SOW) management, and better enable direct sourcing. By simplifying these processes, a good VMS can connect your silos and help manage your data flow, ensuring buy-in.
Additionally, these systems are constantly innovating and are becoming increasingly cost-effective. In fact, the entire VMS market is expected to grow 12.4%Opens a new window in the next decade, so providers should be willing to price aggressively to address this increasingly competitive marketplace.
Today, 91% of companies rely on some kind of contingent labor to meet their talent needs. In the U.S. alone, the domestic contingent workforce is nearly 6 million workers, according to the Bureau of Labor and StatisticsOpens a new window . Meanwhile, our global workforce continues evolving and looks much different than it did just six short months ago.
Of course, the pandemic has played a massive role in accelerating many of the above trends, making the adoption of TTM even more critical than ever. Amid a challenging economic environment, improved workforce productivity and reduced labor costs are benefits that cannot be ignored. The reality is that adopting a more flexible approach to talent acquisitionOpens a new window is no longer simply an option. It’s now a necessity.
Have you been considering adopting total talent management? What challenges have you faced in doing so? Share them with us on TwitterOpens a new window , LinkedInOpens a new window , or FacebookOpens a new window .