Why Data, Analytics, and Talent Intelligence Are the Foundation for Contingent Talent Optimization

What is talent optimization? Talent optimization is the process a company uses to optimally configure its workforce to align with the business’ strategic and operational plans and overarching talent strategy. In today’s complex, rapidly changing business environment labor market, talent optimization of the contingent workforce (not just the permanent employee workforce) is becoming an imperative for organizations across the globe.

According to a recent SIA research report, “The Emerging Backbone of Contingent Workforce Management Success: Talent, Intelligence and Analysis as a Strategic Advantage,” businesses have been struggling with talent shortages in many areas. But with a slowing economy and the possibility of a recession, organizations’ requirements for talent – how much, what types, and at what cost – could shift significantly (and rapidly) over the coming six to 12 months.

The question for organizations now becomes not simply whether their flexible workforce is optimized for today’s market conditions, but whether it can be reoptimized in the future as conditions, challenges and opportunities change. Is the organization equipped with the needed data and analytical capabilities, technology, and expertise to assess and adapt? 

Talent Optimization Requires Data and “New Ways of Thinking”

According to the SIA report, based on research and interviews of industry leaders who have implemented contingent talent optimization programs, “aligning talent and business strategies requires a holistic view of workforce data, labor market knowledge, and the ability to turn analysis into actionable insights and embrace new ways of thinking.” 

At both a strategic and tactical level, talent optimization is highly dependent on being able to source, capture and process large amounts and different types of data -- both internal workforce-related data and external market data. This includes, for example, developing and managing a dynamic roles/skills taxonomy or sourcing and utilizing changing data on market rates and candidate supply in different geographies. But it presupposes that data from various internal systems (e.g., VMS, ATS, HRIS) and from external third-party information providers can be readily accessed, integrated, and operationalized – an obstacle or heavy lift for most organizations.  

Data Roadblocks Can Now Be Cleared for Talent Optimization

According to SIA, leading organizations that have overcome the challenge of internal and external data fragmentation (often with the support of a specialized data and analytics platform partner) have been able to tackle talent optimization in the following three ways:

• Forecast the demand for talent by business areas and roles
• Identify the best, most-cost effective sources of talent
• Come up with ways to attract, manage and retain workers

Accordingly, talent optimization requires the development of approaches unique to an organization and its current and forecasted talent needs.

Successful talent optimization leaders typically look to identify, analyze, and solve specific performance problems with a potentially significant value-added impact that can be measured. They do not try to boil an ocean of problems, the SIA report stated, but use observation, data, and analysis to identify problems that can be structured and evaluated in a QECR (quality, efficiency, cost, and risk) talent optimization framework, developed by SIA for contingent workforce planners.

 The QERC approach, explained by SIA, is useful for assessing an organization’s “’As-Is’ performance and formulating the desired state of consequential measurement, performance management target commitments, and continuous improvement for the betterment of the company’s operations.”  

Leading Organizations Have Achieved Impressive Results

The SIA report presents case examples of how some leading organizations pursued their own talent optimization programs:

• Phillips’ talent optimization program sought to assist managers “in discovering opportunities to ‘right resource,’ or optimize the sourcing, attraction and utilization of talent.” By creating data-driven, intelligence-based guidelines and decision trees, Phillips was able to save $7 million in 2019 alone. The program, which now includes direct sourcing in some markets, has been expanded to 24 countries, and savings are expected to double this year compared to the prior year.
• ServiceNow data showed that contractors most often were converted to full-time status after six to eight months on assignment. The problem was that many started looking for other opportunities after four to six months. It was also found that the company’s staffing vendor pricing model resulted in contractors being paid below the full-time rate for similar positions. To achieve better retention and redeployment, ServiceNow expanded its tenure limits, improved the contractor experience, and used real-time pay data to set rates close to full-time pay parity. As a result of these measures, contractor attrition is down, and conversions are up 5%.

Start Optimizing Your Contingent Talent and Get Results Now

In a time of significant and unpredictable change, an organization’s capability to flex and optimize its contingent workforce is not only a tactical weapon in the war for talent, but a source of organizational agility and strategic advantage. Developing talent optimization strategies requires the right data and talent intelligence, combined with enabling technology and domain expertise.

To get oriented and understand talent optimization as a key way organizations can leverage data and talent intelligence in sourcing and engaging their contingent workforce, start with the SIA research report, “Emerging Backbone of Contingent Workforce Management Success: Talent, Intelligence and Analysis as a Strategic Advantage.”

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at  info@magnitglobal.com.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.