In the wake of the global financial crisis, shareholder pressure to manage costs and liabilities has driven financial services companies to increase their focus on reducing headcount. Yet, while the number of traditional employees on financial services payroll has gone down, EY’s US Contingent Workforce Study has found that more than half (57%) of financial services companies surveyed increased the use of contingent workers at the same time.
Of the financial services contingent workers surveyed, 66% say they began contingent work in the last two years, the highest across all sectors. Some, like Amal, returned to their previous employer as giggers to the same or similar roles.
This trend is set to continue as four in 10 financial services organizations surveyed by EY indicate that they expect more than 20% of their workforce to comprise contingent workers by 2020. This estimate seems conservative when we look across other industries who are forecasting that up to 40% of the total workforce will be contingent by 2020.
Digital transformation is repositioning the size, shape and capabilities of the workforces financial services firms need to succeed. Yet, just as job roles and skill needs are changing, so too are the aspirations and expectations for those jobs.
Workers still aspire to have opportunities to grow and develop their career, work with teams, travel and contribute to a firm culture. They see the absence of these as a big downside to “gigging.” In fact, some of the key reasons they leave even short-term engagements are a lack of variety and challenge, and adequate compensation for the work they are delivering.
There is a link between the degree to which contingent workers are included and their levels of engagement. Although 71% of contingent workers believe that existing workers benefit from skills transfer from contingent workers, 47% say that it is hard for them to feel as if they are part of a team. Further, of the 65% of contingent workers who say they would work differently if they were permanent employees, one in three say that they would invest more into a future plan with the organization.
This lack of engagement and underlying disappointment can create a culture of mistrust that can impact the organization’s brand (and ultimately the relationship with their clients/consumers). Because you’ll never be loved by your customers unless you’re loved by your workers — all of them.
So what would an improved contingent worker brand look like? It starts with being purposeful about the contingent worker value proposition.
This can be a complex task on two levels:
- Firms need to set the boundaries of what is possible when considering corporate security concerns (e.g., cyber) and put legal compliance frameworks in place to prevent contingent workers being deemed to be traditional employees.
- Organizations must find the right balance between including contingent workers as part of a broader definition of an optimal employee mix, and not being so inclusive as to cause traditional workers to question why they should remain in that category.
Once firms have been purposeful about the space available to change, and have adopted a strategic approach to their total workforce approach, they need to start to change the contingent worker experience. This cannot be the sole job of HR and supply chain functions.
Although experience is impacted by shifts in governance, process and access to infrastructure, the role of managers dealing with contingent workers is key. The relationship any worker, but more specifically a contingent worker, has with his or her manager will manifest itself in his or her level of satisfaction and engagement.
Trust is important, but what about loyalty?
Loyalty may seem less necessary as technology such as robotic process automation and artificial intelligence reduces the need for roles containing repeatable activities. In these cases, financial services organizations will be looking for workers that have a specific capability for a specific initiative at a specific time — a skill set that likely won’t be needed again.
However, just as engagement during the tenure of a contract remains crucial, loyalty should remain a prized attribute to encourage skilled workers to accept future contracts with the organization when next their services are required.
To attract the right talent at the right time for the right job, financial services organizations will have to show that they are trustworthy — that workers can trust that they will offer something of value for them, and then deliver on it.
A purposeful approach to the contingent worker experience will bring them in and keep them coming back.
The pressure from shareholders and activist investors to squeeze costs from the business is an ever-present challenge for financial services organizations. Reducing headcount has always been a favorite target as something tangible organizations can point to as an action that they’ve taken.
Filling roles vacated by permanent employees with contingent workers may seem like a win-win for organizations and shareholders alike. However, in doing so, organizations need to make sure it’s a win for their workforce as well.
As organizations grow their contingent workforce, they need to be purposeful about creating an inclusive contingent worker environment that stimulates engagement during, and loyalty after, the contract. Having the right governance, processes and infrastructure in place is a good start.
But it will be the relationships managers build with their contingent workers that will encourage them to invest in the organization while they’re there, and keep them coming back.