Compensating Flexible Workforce and Contingent Employees

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Compensating Flexible Workforce, Contingent Employees and Flexible Work Schedules


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Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management Hyderabad Compensating Flexible Workforce, Contingent Employees and Flexible Work Schedules

The flexible workforce:

The flexible workforce A workforce that can respond quickly in quantity and type to changes in demand a business may face. The organization of a flexible workforce consists of Core Workers: Full-time employees who have specific skills and job security Periphery Workers: Part-time or temporary workers who are available whenever needed 14- 2

Advantages of Flexible Workforce:

Advantages of Flexible Workforce Employee benefiting from flexible working hours More employee opportunities of training and being multi-skilled Reducing business costs and increasing productivity Reacting quickly to changes in the workforce 14- 3

Contingent workers:

Contingent workers People who work for an organization, but not on a permanent or full-time basis, including temporary placements, contracted professionals, or leased employees 14- 4

Contingent Employees:

Contingent Employees Part-time employees Temporary & on-call workers Job sharing Contract / Outsourced workers Leased employees Independent contractors Freelancers Consultants

Temporary Workers:

Temporary Workers Temporary Employees do everything from data entry to interim CEO Fill in for core employees Help ease high demand periods Help determine future employment needs May be assessed for a core position Don’t receive company benefits

Job Sharing:

Job Sharing 2 or more part-timers perform 1 job Reduces costs Increases flexibility Maintains productivity levels May increase morale & loyalty

Leased Employee :

Leased Employee Lease company does all HRM functions Fees either % of payroll, or % per employee Employees work for contract duration Work in Food service, security, building maintenance, administration

Leased Workers’ Benefits:

Leased Workers’ Benefits Leasing company is legal employer In 2001, average wage was $19.75 in USA Leasing & hiring companies responsible for discretionary benefits

Contingent Employees Work In:

Contingent Employees Work In Transportation Communication Public utilities Wholesale trade Retail trade Government 14- 10

Reasons for Rise in Use of Contingent Worker:

Reasons for Rise in Use of Contingent Worker Economic recessions International competition From manufacturing to service More females in workforce

Wage Comparisons in 2004:

Wage Comparisons in 2004 Group F-T P-T Management & Professional $30.38 $23.79 Production 14.62 8.92 Service 10.26 7.57 Overall Average $19.05 $10.17

Benefits Offered In 2004:

Benefits Offered In 2004 % of Companies Type Offering Benefits Paid time-off 25% Medical insurance 11% Retirement 20%

Flexible Work Schedules:

Flexible Work Schedules Flextime Compressed work weeks Telecommuting


Flextime Set weekly not daily hours May have to work core hours Possible employer benefits Lower tardiness & absenteeism Higher productivity Extended business hours Possible employer drawbacks Increased overhead costs Coordination problems

Compressed Workweeks:

Compressed Workweeks Example: 40 hours in 3 - 4 days Possible benefits Can promote recruitment and retention Can reduce commuting time Can allow more family time


17 Telecommuting Telecommuting - using computers & telecommunications equipment to perform work from home or another remote location Work anywhere - wireless Internet devices, laptops, cell phones, fax machines Extreme telecommuting - people live & work in countries far away from the organization’s physical location


Telecommuting Possible benefits Same as with flextime Possible disadvantages Less direct employee interactions Makes performance appraisals difficult

Work-Life Balance:

19 Work-Life Balance Telecommuting is one way organizations help employees lead more balanced lives Flexible scheduling important in today’s workplace – 27% of workforce/flexible hours Broad Work-Life Balance initiatives – critical retention strategy – on-site gym & childcare, paid leaves & sabbaticals


Case Everyone telecommutes at your firm. All work is done in virtual teams of four. Divide up into groups of four and respond to the following questions: How will you organize your team? Do you need a virtual leader? How will you select your virtual team? How will you hold team members accountable?

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