Flexible workforce management - the strategic resource of the future

The shortage of skilled workers is progressing - inexorably and ever faster. It is becoming increasingly difficult for companies of all sizes and industries to fill vacancies and retain skilled employees in the long term. In addition, a relevant proportion of the workforce prefers flexible working models: in the form of fixed-term contracts and various types of part-time, temporary and self-employed work. Demographic change is exacerbating the current situation. Turning a blind eye to these disruptive change processes will hit companies hard in the future. Even companies that do not (yet) have any problems with recruiting will sooner or later have to resort to freelancers to fill staffing gaps. By then at the latest, strategic workforce management will become a success factor that will determine the future viability of companies.

Study on flexible workforce management

The management and technology consultancy BearingPoint has dedicated the study Flexible Workforce to the extensive range of topics surrounding workforce management. The key findings:

• Making flexible working models widely usable is becoming a significant competitive factor when it comes to cushioning fluctuating workloads and closing skills gaps.
• At the same time, the demand for tailored, increasingly flexible working models is growing in the wake of globalization and digitalization.
• The demographic trend is further exacerbating the situation.

BearingPoint has identified flexible workforce management as a way out of this dilemma. But what exactly is it all about?

What is workforce management?

Workforce management is the holistic view of demand-oriented personnel deployment. Workforce management is made up of various components:

• Determining personnel requirements
• Personnel structure optimization
• Capacity planning
• Personnel deployment planning
• Personnel management
• Time management

In times of volatile markets, which are accompanied by strong fluctuations in the order situation and in customer volumes, it is increasingly difficult to optimally plan personnel requirements. Against this backdrop, companies are required to plan the deployment of their employees according to the situation. This is precisely what flexible workforce management is all about.

How does workforce management work?

In order to make workforce management more flexible, a holistic concept is required. The focus should be on modeling and establishing end-to-end processes and introducing the right IT systems. Both primarily serve the purpose of obtaining a transparent overview of the number and qualifications of the resources used, accelerating processes and ensuring compliance.

What are the advantages of flexible workforce management?

A company that is able to manage its workforce in line with demand fills staffing gaps faster than the competition and also positions itself as an attractive employer in the war for talent. This is because managing internal and external employees in such a way that they make the most of their professional potential, enjoy doing the work assigned to them and work together optimally opens up major strategic advantages. These are the benefits of flexible workforce management at a glance:

• Absorb fluctuating workloads
• Cover special skills (selectively)
• Recruit and retain skilled workers
• Improve team performance
• Reduce the workload of the Core workforce
• Bridge volatile order situations
• Cushion capacity peaks
• Compensate for production fluctuations

Goals of Flexible Workforce Management. (© Deutsche Interim AG)

Why is flexible workforce management a strategic resource?

The main drivers of the trend towards strategic workforce management are societal developments and changing attitudes towards the job. While older employees attach great importance to decades of job security in one and the same company, representatives of generations X, Y and Z prefer lifestyles that are diametrically opposed to their parents' and grandparents' quest for security. Younger employees not only change employers much more frequently, they also work several jobs at the same time. Companies that succeed in optimally integrating freelancers with the help of strategic workforce management and profitably tapping into their potential gain a significant competitive advantage in the battle for the most promising talent and most experienced professionals.

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Flexible workforce management - not for everyone
Companies should not forget that the demand for flexible employment depends on the level of qualification and stage of life. While Generation Z is very interested in flexible working models, middle-aged people and non-academics increasingly prefer permanent positions.

What are the challenges of flexible workforce management?

The BearingPoint study identifies a number of challenges associated with workforce management:

Integrated planning and strategic inclusion of flexible employees

Many companies focus on covering capacity peaks and reacting to order fluctuations. Accordingly, they do not (yet) consider flexible workers to be relevant to their HR strategy. As a result, synergy effects such as sharing knowledge within the company or finding and retaining talent remain potentially untapped.

Cultural integration of flexibility

Those who want to strengthen their workforce with freelancers should adapt not only their corporate culture but also the way they manage, control and retain employees. In order to benefit from flexible employees, their deployment must not only be desired and encouraged by management, but also supported by the departments concerned.

Parallel worlds internal vs. external

There is currently a large discrepancy between the core team and the flexible employees - in terms of familiarity with the corporate culture, processes and tasks. It is imperative to close this gap. It is important to train freelancers efficiently and effectively, pass on the necessary knowledge to them and integrate them socio-culturally.

Using different forms of work

Suitable working models should be selected depending on the goals companies are striving to achieve with regard to workforce flexibilization. When defining these, areas of deployment, qualification requirements as well as procurement and employment duration must be taken into account.

Human resources management in transition

Classical HR managers must become flexibility managers. In order to manage the different employee groups and take them into account in all HR processes, it is essential that HR employees develop into strategically thinking and operationally acting sourcing managers. They should also support managers in dealing with flexible working conditions as required.

Collaboration between specialist departments, procurement and the HR organization

Functioning flexible workforce management requires a holistic approach that includes suitable processes, organizational structures and supporting IT systems. So far, companies have only realized this to a limited extent.

Connection to IT systems

There are various software solutions available on the market to support workforce management. So far, however, no single tool meets all company requirements. A successful selection often fails because processes and organizational structures are not worked out well enough.

Limits to planning and the need for a skills-based view of the entire workforce

The supply situation on the current candidate market and the fast pace of knowledge change make previous planning based on project timelines or fluctuation figures increasingly imprecise. Innovative companies in particular are increasingly turning to a skills-based approach to their workforce: In order to fill a position or assign a task, it is all about the required technical skills. Whether these are in-house or external employees is of secondary importance.

Which working models should be distinguished?

The success of strategic workforce management stands and falls with the ability to put together functioning teams of permanent and freelance employees. To do this, companies first need to know what different working models actually exist. The framework model of flexibilization dimensions provides an overview. The five dimensions of flexible workforce management are:

Non-flexible workforce

Non-flexible staff are permanent employees. These employees are considered indispensable knowledge carriers and usually form the core team. The main focus of companies should therefore be on retaining and retaining these employees.

Internal flex workforce

These employees are permanently employed, but organize their working day more flexibly, for example in the form of a four-day week and models such as annual working hours, lifetime working hours, flexitime and sabbaticals. Internal flex workforces are increasingly working remotely, for example in home offices and co-working spaces. The ability to work flexibly despite having a permanent position has now become an important criterion for job seekers when deciding for or against an employer.

Extending flex workforce

Onboarding new employees requires a great deal of time and personnel. However, as flexible employees also need to be involved in relevant processes - including team building, knowledge transfer and the like - many companies forgo this valuable resource. This is precisely where the extended flex workforce comes in. These are well-trained and skilled individuals who already know the company: from former employees and former working students to those returning from parental leave and retirees who work on an hourly basis.

External Flex Workforce

This group includes temporary workers, freelancers, platform economy employees and other service providers. While temporary workers are usually loaned to a company by agencies for a certain period of time, freelancers are a good option for covering staffing requirements in the short and medium term - if this is not possible with internal staff. The platform economy, on the other hand, mostly includes self-employed specialists who receive orders via online platforms. Last but not least, the traditional service sector is part of the external flex workforce. Here, companies use a wide range of services as part of a contractual relationship.

Outsourcing

Not least, companies can outsource entire sub-areas or business processes. This is often done via intermediary agencies, personnel service providers, interim management providers, platforms or external consulting companies that are linked to a pool of qualified specialists and managers for the respective task and provide suitable personnel as required.

Flexible workforce management: relevant success factors

Companies that include strategic workforce management on their HR agenda should not do so without a corresponding roadmap. The BearingPoint study identifies a number of factors on which the success of workforce management depends.

Personnel requirements planning

The biggest organizational hurdle is to ensure optimal collaboration between the HR department, purchasing and the specialist departments. Competencies and expertise need to be brought together centrally in order to be able to plan holistically how internal and external employees should ideally be deployed in terms of their specialist skills.

Onboarding

Introducing external employees into the company is just as essential as it is for permanent employees. Not only does the flexible workforce expect this, but the company itself also benefits greatly when external employees contribute their expertise and work on tasks independently after a short induction period.

Organization and coordination

If employees with different working models and contract types need to be managed, the coordination effort inevitably increases. Accordingly, smooth and centrally controlled workforce management processes are essential. This requires strategically aligned end-to-end processes, supporting IT systems and a skills-based workforce management approach. HR and procurement act as internal service providers for the specialist departments. Corporate governance and compliance must also be ensured and strategic make-or-buy decisions made.

How do flexible workforce management and interim management interact?

Whether and to what extent companies make use of the possibilities of strategic workforce management is (still) dependent on the industry, available personnel and qualification requirements. In the long term, however, companies will not be able to avoid strengthening their workforce temporarily or permanently with external employees. HR managers not only have the task of permanently monitoring developments on the labor market and developing various concepts for workforce management. They must also react quickly if the situation worsens. In order to fill strategically important positions quickly, it can make sense to work with an interim management provider. They actively support companies in closing personnel gaps in a timely manner and flexibly finding employees who offer the respective company great professional added value.

In addition, experienced interim management providers help companies to find specialists with special skills, for example in the areas of digitalization and agility, which are rarely available on the labour market. Flexible employees are indispensable, especially for investment projects that tie up large human resources on the one hand and require very specific expertise on the other. Companies also benefit from the fact that the interim management provider not only takes care of contract management, but also quality assurance.

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In our Brochure Connected Workforce: With Interim Management to a Connected Workforce you can find out more about the causes of the shortage of specialists and managers and why the connected workforce is a promising solution.