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In modern business there is an increasing number of companies whose employees are not employees in the traditional sense, but contingent workers. The new organizational form of human resources management is based on the fact that specialized companies on a commercial basis provide businesses with workers who actually remain in the state of agencies that provide these services. To such services turn more and more companies, and in recent years, almost one-third of jobs get contingent workers, and most of them are employed through agencies providing contingent staff. This trend is clearly present in the United States, regardless of whether the economy of this country on the decline or rise.
Recruitment agencies and companies of contingent workforce management have become a significant component in the formation of labor employment in many sectors of the economy and industry. As a result, there is evidence that some businesses are paying significantly less attention to the problems of recruitment and staff managing because of the use of OCWM services. Consequently, there are companies where contingent workers go over usual staff and even form inter-corporate culture and industrial atmosphere in the workplace. A significant increase in activity and influence of contingent labor in the labor market causes an additional problem of “insecurity” of the employment relationship.
Such a situation is considered in Motorola company, where was designed a special contingent workforce management model. In this work it is necessary to consider the case of Motorola company, it’s human resources management strategy and make a conclusion about the possibly best variant of HR management that company will implement. It is necessary to identify the situation, to provide supporting material on this topic and provide recommendations of possible problem solving.
Motorola is a international company, which works in 70 countries all over the world and had in the year 2000 about 147,000 employees. It is organized into six business units:
– the semiconductor products sector (SPS),
– the broadband communications sector (BCS),
– the integrated electronic systems sector (IESS),
– the commercial, government and industrial solutions sector (CGISS),
– the global telecom solutions sector (GTS),
– the personal communications sector (PCS) (Beaulieu, 2000)
Motorola Company, Inc. is one of those modern companies which actively use contingent workers. At first, the company’s human resources recruitment and management process was based on transactional relationships with many different recruiting and staffing firms which were involved in selection of the staff and making contracts in the market. Of course, that first model caused many problems, primarily related to lack of a unified approach to the selection and management of the staff, lack of coordination. And also very important to point the absence of a common corporate plan for sourcing contingent labor, and high costs of sourcing and such a problem as disparity between contingent worker pay rates and company’s full-time employees wages.
That is why the company initiated creation of new alternative approach to contingent staffing at Motorola , that would address many of these problems. A new strategic sourcing model that would involve agreements with a small number of staffing companies which could “partner with Motorola to jointly create a business-webbing infrastructure that would provide the linkage between SPS and a vast network of contingent labor suppliers”. (Beaulieu, 2002)
In that way was created the Office of Contingent Workforce Management (OCWM), with Randell Floyd as a head, responsible for designing and implementing the new contingent staffing model. The other responsible were Tim McLaughlin, who controlled the program aimed at non-professional manufacturing workers, and Callie Rich who managed daily operations.
So it is necessary to identify what is the Office of Contingent Workforce Management – it is a business webbing (b-web) solution for managing contingent workforce through an outsourcing strategy. According to Tapscott et al. (2000), a business web (b-web) is “a distinct system of suppliers, distributors, commerce service providers, infrastructure providers, and customers that use the Internet for their primary business communications and transactions.” (Tapscott et al., 2000)
The primary goals of the new contingent staffing model at Motorola were:
to recruit the high professional candidates, which passed special uniform test;
to maintain flexibility of staff – that means that the number and quality of the staff must answer the present needs of the company in the staff;
to develop an infrastructure to manage contingent workers and control costs of their employment in the company. (Beaulieu, 2000)
So it is possible to identify the two most important problems : the first was associated with cycles of business activity of the company and the industry, with required certain degree of flexibility of the staff number; the second problem was connected with high costs of previous scheme of staff recruiting and management through great number of staffing companies. Also an important issue that greatly influenced the selection and management of the staff (and contingent staff in particular) in the company was the lack of unified and integrated approach to recruiting and staff management, when every manager of the HR Department in the company had its own approach and its system (for example, the Research and Development group). All of these problems might be solved with a new contingent staff strategy and the Office of Contingent Workforce Management.
Another problem that arose before the Motorola company was negative cycle in the industry, when the company had huge costs and losses. Overall development strategy of the company included primarily a strict cost reduction for the next period. It was necessary to reduced costs also for human resources management, together with a large number of workers were laid off due to the decline in production and consequently to the decline in demand for workers. The new asset-light approach was the company’s strategy for the next years.
Therefore, additional costs for launching a new program of staff management were not real decision, and all the program was under the question. The new challenge before the company was to find new alternative staffing methods based on the global tendency to market flexibility. That tendency meant “moving to more flexible workforce staffing models that involved substantial numbers of contingent workers”. (Beaulieu, 2000, p.10)
That is, beginning from the 2001 the Motorola company had adopted an “asset-light” approach. But the vice-president of GTS had expressed interest in the OCWM model , that is why it is necessary to analyze weather it could be better then the “asset-light” approach and if it could become a new effective model for Motorola’ management of human resources.
The question that stands before Randell Floyd is convince GTS that the OCWM model could be successfully implemented at Motorola and that this new method for sourcing contingent labor would be effective.
Supporting information on the problem of contingent staff management
Thus, recruiting of contingent employees is the modern tendency in many big companies, and Motorola is one of those. Of course, the trend to hire temporary workers has certain reasons, and, as already mentioned, this trend is largely due to the cyclical nature of industry and economy, which requires flexibility of staffing. Among other reasons that companies actively use work of contingent workers is often called inability to organize the recruitment and training of specialists in accordance with their needs. This we can see in the Motorola where there was no one particular single approach to the stuffing, which caused many difficulties and problems.
The main reasons for using new contingent staff strategy and the Office of Contingent Workforce Management are the follows:
– The company’s desire to be able to implement a flexible policy of recruitment in terms of cycles in the industry and increased competition in the market;
– The need to adequately respond to changes in the labor market;
– The need to reduce labor costs at the corporate level;
– The possibility of reducing the cost of the procedure for selection and staff management.
Analysis of the situation of the Motorola helped to reveal features of employees recruitment and management when company used a significant number of contingent workers hired through agencies:
1. Managers of agencies providing contingent staff were involved in the implementation of some of the traditional HR-functions in the company: this, in particular, was the transfer of function of staff screening and recruitment of new employees. In this case, HR-managers of enterprises had permanently to work closely with managers of the agency, building possible and effective cooperation and methods of work.
2. A redistribution of the functions of HR-managers of Motorola and managers of recruiting companies in other areas: managers of agencies tracked the “private” status of contingent workers (paid days- off, disciplinary, dismissal, etc ) . At the same time, the task of monitoring and managing of quality and productivity of the work of contingent workers at the individual and collective levels remained unchanged responsibility of HR management of the company.
3. The presence of two different groups of workers – contingent and and permanent employees, fulfilling in the company the same work – created a certain tension and alienation among these groups. The reason for this exclusion, as a rule, are differences in payment and benefits package (overtime payment, health insurance, paid days of illness, etc. The other reasons of the atmosphere of “injustice” in the company were the tendency of using contingent workers for more difficult types of work, shorter time of work contracts than for the permanent staff. All this created an additional burden on the HR-managers of the company, who had to fight with the tension, preventing the reflection of this phenomenon on the efficiency of the work of employees.
4. Increasing number of contingent workers, employed in the company, is the cause of the simultaneous growth of staff turnover. This put an additional burden on Human Resource Managers, because to some extent required their specific actions for adaptation of new temporary workers to the developed at the company corporate culture and style of work, development of certain professional duties, etc. Typically, errors of human resources management in the period of new staff adaptation lead to dismissal of workers, which is the reason for the growth of staff turnover. According to company’s managers, to minimize the costs of adaptation of temporary staff to the work it is necessary to enter a contract for a period of at least 6 months, and according to the same managers, a new contingent workers only after 18 months can fully adapt its professional duties in the new place of work.
Thus, a radical solution to the problems of adaptation of new employees and, consequently, reduce of staff turnover seems to be necessary considered when developing and implementing new program of recruiting and staff selection. The program should take into account to the maximum extent the appropriate skills and qualifications of newly hired employee’s for specific job requirements of the enterprise.
That is, according to the analysis of the above problems, it is necessary to say that the transition to a new model of recruiting and stuffing for Motorola company will involve new features of employees management.
Thus, the analysis of the situation in Motorola showed the following: the company’s staff now is not a homogeneous group of employees, because in addition to traditional salaried employees employed by the company on a permanent basis, there work contingent workers, including those provided by specialized agencies or working directly under the contract, some of whom work part time, as well as the staff managed through an outsourcing strategy. So the best decision may be to merge under one management structure all the staff – in other words to create the Office of Contingent Workforce Management, performing HR-management of all existing staff in the company, regardless of its status.
The new system of HR-management will primarily be aimed at ensuring the most comfortable work environment for employees and to create a team of professionals – and that is not an unreal or very costly task. Because the greatest team effectiveness can be achieved mainly through the adequate selection of staff and ability to ensure the maximum work productivity of each worker, both of permanent staff and contingent workers.
Creation of the Office of Contingent Workforce Management will help to achieve that, and also to solve some early existing problems. Early the transfer of function of screening of new hired contingent workers to agencies led in some cases to the loss of control over the qualifications and ability to work effectively of contingent staff. Solution to the problem is found in the following form:
– the company can introduce a two-tier system of recruitment: at the first stage the agency will select employees according to the certain knowledge requirements and specific qualification requirements, and at the second stage the HR-managers of the company conduct interviews with those candidates who have passed through qualification test at the first stage of recruitment;
– the company will implement an additional training program, conducted by special staff training agencies, including targeted training of candidates for temporary employment of skills which are the most important and needed for the work in the company.
The work of the Office of Contingent Workforce Management is designed to integrate, coordinate, and integrate all other functions of human resources management in one unit. This is achieved by implementing the principles of working with staff and their interaction, and will be based on such basic principles of work:
1. Progressivity: relevance of new contingent workforce staffing model to modern progressive analogues.
2. Prospects: the formation of the new employees management system should incorporate the perspective of development of the company.
– assumes the most efficient and cost effective organization
of staff management system;
– reduction of the share of costs for staff management in the total costs of the company;
– improving worker productivity and increase the efficiency of production;
– costs to improve the staff management system must be worked out due to the effect of growth of productivity.
4. Complexity: formation of the employees management system must take into account all factors affecting the system (arrangements with recruiting agencies, contractual arrangements, the state of the system of management, etc.) and cover all aspects of employees work.
5. Simplicity and optimality for the company.
6. Consistency: The interactions between the parts of the system of human resources management, as well as between relatively autonomous parts of the employees management system, should be generally consistent with the basic objectives of the model and synchronized in time.
7. Flexible and productive employment: the system answers to the business needs, level of labor productivity, level of company’s need in certain type of employyes with specific abilities and skills.
8. Definite rules: human resources management system should have a conceptual unity, contain a single accessible terminology, the activities of all departments and managers should be based on common principles and instructions (stages, phases, functions) that simplifies the process of staffing and makes it more effective.
Thus, a designed contingent workforce staffing model and the Office of Contingent Workforce Management will help to create a proper unified approach in the company to a system of staff selection, management, training and education of new employees, as well as control over their work. This new model will help to solve various existing problems and must become very effective.
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