controlling cost

Controlling Benefits Cost 1

The Human Resource departments at many U.S. based organizations have experienced

vast changes in recent years because of increased pressure in competition. A key part of this

change has been the dramatic growth of the contingent workforce, which consist of workers who

do not have a long tenure or attachment to the employer. Organizations have responded to the

competitive pressure by making employer to employee relations more flexible to include changes

to compensation and tenure systems. When hiring contingent workers, employers need to

establish internal equity and integrate the workers into the organizational culture in order to align

the temporary workforce with the strategic objectives and goals of the organization.

Creating a sense of internal equity at different levels of pay and total rewards

The change of economics over the recent years has led organizations and business to

result to hiring more part-time and short tenured employees known as contingent workers. For

the most part, these employees are paid only 80% compared to the full-time employees and are

offered no health care insurance from the employer (Hipple & Stewart 1996). The largest

populations of contingent workers are younger in age and usually a student. While the majority

of contingent workers are not offered health coverage, two thirds of these workers are covered

from another source, a parent or spouse (Hipple & Stewart 1996). With the lower pay and no

benefits there are other ways an organization can still ensure a sense of equity. It must be

understood by all workers that there are laws that apply to all, and training can be given to the

full-time force that contingent workers are to be treated fairly. When contingent and non-

contingent are working side by side, the non-contingent worker needs to be considerate in the

treatment to the part-time employee (Lawrence, 2012).

Another consideration is training; the contingent worker needs to receive the same

training as all other employees. Brief them on the corporate culture, even though they may only


be with the business for a few days they need to know the couture and the business objectives,

and, if they are doing great tell them. At the end of their tenure give them a letter or certificate

of appreciation, if evaluations are used write it well, both of these can be used on a resume aiding

them in their search for permanent employment.

Problems can arise from the part-time workers in the company also. It is important for

businesses to understand that contingent workers are still held under the same rules and

regulations as full-time employees. Such as, being held liable under the “Americans with

Disabilities act” (ADA). Employers must follow the Equal Employment Opportunity

Commission that enforces the ADA, and how it applies to contingent workers. The Fair Labor

Standards Act states that one must pay the worker the minimum wage and any overtime that is

worked (Business Law 2013).

External competitiveness with contingent workers as it relates to attracting top talent and

meeting organizational objectives

The extensive use of contingent workers impacts the organization external

competitiveness as it relates to attracting top level talent in that potential employees may be put

off by the temporary nature of the workforce. Often some employees resent contingent workers,

and a feeling of "us" versus "them" develops amongst the staff. This might be due to bitterness

regarding potential overtime work being delegated to contingent workers or it may be a feeling

that contingent workers are not truly invested in the company and its problems. Sometimes

contingent workers are hired after a reduction in full-time employees, causing the remaining staff

unhappiness over having to work with new, temporary employees that are untrained (Armstrong

2013). In addition, there is likely to be decreased loyalty on the part of the contingent workers.

Each of these factors negatively impacts company culture, which makes attracting top level


talent more difficult.

Furthermore, productivity is likely to be impacted since contingent workers do not have

any "skin in the game" or particular reason for excelling in their work. These workers understand

they are only temporary. Extra time must be spent training contingent workers, which also results

in loss productivity. Furthermore, contingent workers are less likely to have specialized skills

and expertise. Due to these issues meeting organizational objectives will be more difficult for the

organization.

Should contingent workers be equally compensated given the fact that employers will pay a

surcharge per employee to temporary agencies

The staffing agency does not charge the worker for finding them employment; many

times they perform training for the worker and administer skills tests so they can match the

worker with an employer. The Staffing agency does have an overhead, and someone has to pay

for it, the surcharge is a form of payment from the employer for the staffing agency to hire a

worker. 20% to 40% may seem a bit high if only looking at the overhead incurred from the

worker. Some of the surcharge is also to the employer as the agency is acting as a recruiter,

marketer and advertising agent for the employer. The employer however, is not paying HR to

recruit, interview and advertise for the vacancies, this is one way for the employer to save

money. With that being said, the worker has to pay the staffing agency in some form for finding

them a job, but for the employer only to pay 80% the normal pay is too little.

As the CEO of the company, create a sense engagement with the infusion of regular employees

and contingent workers.

As the CEO of the company, I would create a sense of engagement with the infusion of regular

employees and contingent workers by making sure introductions were made, and names were


learned. This seems simple, but in many organizations this basic hygiene factor is not addressed.

I would also work to reduce the "us" versus "them" culture by including contingent workers in

staff meetings, training, and social activities. In addition, contingent workers should be given a

decent place to work (not shoved into a makeshift desk or segregated from the rest of the staff).

They also must be given adequate tools for the job (computer, phone, etc) and shown around the

office as a way to become acclimated (Lawrence 2012). Their role and tasks should be clearly

outlined, both to full-time staff as well as the contingent worker. This will help avoid suspicion

and speculation.

I would encourage staff members to identify the benefits of these workers: reduction of

work, administration savings, and flexibility. In addition, I would point out the potential for

recruiting workers from the contingent workforce, an excellent opportunity based upon the

ability to see workers' ability in advance.

Contingent workers are more likely to be concerned about their future; they are working

job to job, without a regular paycheck in between. It would be important to give these workers a

sense of how long they will be needed in the company. In addition, a review could be done to

make sure contingent workers understand the availability of future work or potential next steps

toward full-time work.

Contingent works are becoming more and more prevalent (Armstrong 2013), as this is an

opportunity for organizations to capitalize on their revenue. At the same time, the employer

needs to be mindful of obligations to the worker, in providing fair treatment, staying within the

law, and integrate the workers into the organizational culture. Many times this can be a win-win

for the employee and employer as workers may only be looking for part-time work such as

students, and the win for the employer are associated with lower cost.


References

Armstrong, L. (2013). Job seekers take temp path to permanent gig. Crain's New York Business,

29(1), 12. Retrieved November 20, 2013 from

http://search.proquest.com/docview/1269470787?accountid=28844

Business Law (2013). Contractors, Consultants and Freelancers and Your Business , Retrieved

November 25, 2013 from http://business-law.lawyers.com/small-business-

law/Contingent-Workers.html

Hipple, S., & Stewart, J. (1996). Earnings and benefits of contingent and noncontingent workers.

Monthly Labor Review, 119(10), 22-30. Retrieved November 20, 2013 from


Lawrence, T. (2012). Integrating contingent workers. Baseline, (114), 13. Retrieved from




http://business-law.lawyers.com/small-business-


HRM511 Module 2 Session Long Project Grading Rubric (Rev. 11-4-13)

RUBRIC INSTRUCTIONS FOR STUDENT: After you complete your references section in your assignment, copy and paste this grading rubric to your Word document and use it as a checklist to help make sure you covered all the required content, structure, and mechanical expectations.

Content

Student should use mark the box below as a checklist.Student Notes

The 1st section, the Introduction, describes what the memo is going to be about; it mentions the upcoming sections.

X

The 2nd section describes, given the different levels of pay and total rewards, how an organization creates a sense of internal equity.

X

The 3rd section describes whether the extensive use of contingent workers affects the organization external competitiveness as it relates to attracting top level talent as well as meeting organizational objectives.

X

The 4th section describes whether contingent workers should be equally compensated given the fact that employers will pay a 20-40% surcharge per employee to temporary agencies.

X

The 5th section describes how you would, as the CEO of the company, create a sense engagement with the infusion of regular employees and contingent workers.

X

The 6h section, the References, has at least 2 peer-reviewed/scholarly references from the databases within the CyberLibrary. The references are also integrated within the paper.

X

The 7th section contains this grading rubric. X

Organization / DevelopmentStudent should use mark the box below as a checklist.

Student Notes

The 7 required sections are organized separately in sequence as listed in the Content section.

X

The memo is at least 2 full pages in length (excluding references and headers) size 12 Times New Roman font with double spacing text.

X

Each section has a clear label or header. X

MechanicsStudent should use mark the box below as a checklist.

Student Notes

Formatting or layout and graphics are pleasing to the eye (font, colors, spacing).

X

Rules of grammar, word usage, punctuation, capitalization, and spelling are followed.

X

Sentences are complete, clear, varied, and concise with proper syntax. XUsed size 12 Times New Roman font for main body text and References. XUsed double spacing between sentences and in References section. X

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