Michael Blumberg, President of Blumberg Advisory Group discusses the emerging hiring trends of the variable workforce and freelance management systems and looks at how these can be applied to help field service organisations balance staffing levels with workloads...
If you follow the business news, you have heard about hiring trends which are moving away from the traditional full time employee model. Having full time employees means a guarantee of wages, benefits, vacation time, sick time and paying additional federal wage taxes.
With the new labour laws coming into play regarding overtime, this can mean additional expenses as well. It also means paying the employee even when there is a lull in the business. For a service company there may be peaks and valleys in workflow and the need for field service personnel. And while so much can be done on a remote basis, there remain many times when someone just has to be onsite to fix the problem. Clients are no longer localised geographically so having technicians who can get there quickly becomes an additional challenge.
There are now highly skilled, well trained, specialised Field Service Engineers who are available on an as needed or project basis
For most people in the Variable Workforce, they work this way by choice, enjoying the flexibility that being your own boss can offer. This workforce can be found worldwide and can get to those emergency on-site calls fast. That speed satisfies the customer and saves the service company money.
Given changes in the way companies staff their businesses, a new system of managing this process is a natural extension. With the increased pool of a project based, part time workers has come the growth of Freelance Management Systems (FMS). These online cloud based systems allow those companies looking for qualified workers, including Field Service Engineers, to find them quickly and easily.
The FMS platform handles the billing and payment, scheduling, provides a searchable database with skill sets and geographical locations of the personnel all at the fingertips of the companies who seek workers and the workers themselves. The workforce can market themselves to hundreds of companies at once and manage their incoming payments all at the click of a button.
FMS provides companies with the opportunity to achieve significant cost savings over time and the ability to accelerate strategic or organic expansion resulting in new clients, new service offerings, and/or new sales territories.
What is the actual experience of companies using a Variable Workforce and FMS platforms?
When faced with questions like this, what would a great management consultant do? A survey of course! So that is what we did. We created an online survey for the Field Service Industry to look at these staffing trends and how it is being manifested.
We wanted to reach a broad range of companies, reaching out to professionals who engage field service staff or make decisions about field service staffing requirements for companies with field service functions for technology equipment they sell and/or service.
We wanted to examine the benefits of Variable Workforce models, particularly FMS. In addition, we wanted to understand key objections or concerns about the Variable Workforce and FMS models. And in doing so, we could assess the key motivators for using FMS and evaluate the impact of FMS on critical Key Performance Indices.
Finally we could use this information to identify the best candidates for using FMS. This article addresses Variable Workforce and Field Management Systems in the Field Service Industry.
The survey which we conducted yielded 203 respondents. The types of companies included those participants represent include all areas of Field Service: Third Party Maintainers/Independent Service Organisations, Original Equipment Manufacturers, Value Added Resellers, Systems Integrators, and Self-Maintainers.
The companies range in size from over $500 million in annual revenue to less than $50 million. These companies also varied in size as there were those who manage less than 100 field service events per month up to more than 1000 field service events. These field service events included emergencies, installations, inspections, and preventative maintenance or calibration. And the types of technology supported included Information Technology, Network Connectivity, Printers, Point of Sale, Telecommunications, The Internet of Things, Security Equipment, ATM and Banking, and Retail Marketing Equipment. The companies also ran the range of how a Field Service Business is run – as a cost centre, as a profit centre, as a strategic line of business, or as a revenue contribution centre.
On average, the Variable Workforce users support more types of technology than companies who do not use solely a Traditional Workforce.
One of the most important data points we found was that on average, the Variable Workforce users support more types of technology than companies who do not use solely a Traditional Workforce.
That is, those companies who use Variable Workforce are able to support 4 types of technology versus only 1.8 types of technology for companies who do not utilise Variable Workforce.
This piece of information reinforces the idea that those companies using a Variable Workforce can expand their service offerings not only geographically, but also to include more types of service by utilising the highly skilled specially trained technicians they can reach utilising this model.
The top three reasons that companies made the move to a Variable Workforce were:
- The ability to be agile and scale their workforce based on customer demands.
- Over half agreed that “We didn’t have enough work in selected geographies to justify hiring a full time Field Service Engineer.”
- Almost all said that controlling labor costs was a significant motivator.
Once making the decision to utilise the Variable Workforce, companies needed to find tools to help build and manage the staffing. Nearly two-thirds of those companies use a Freelance Management System. Others used and in-house team or 3rd party provider or staffing company.
Of the Freelance Management System users, almost all have been using it for at least one year and 60% for three years or more. Approximately two thirds of these companies are Third Party Maintainers/ Independent Service Organisations or Value Added Resellers.
What type of labor do they contract labour? The number one answer is project based work - an overwhelming 81% of the respondents. Not only do companies who use a Variable Workforce support more technologies than non-users, but also FMS users tend to support more types of technology. On average the companies who use FMS support 4.3 types of technology versus only 2.8 types of technology for non-users. This is most likely due to the ability to have more types of specialised engineers available to the FMS users.
Companies considering using the Variable Workforce and FMS to support that staffing model had concerns about moving the impact it would have on their business.
These concerns included a fear of a negative impact on customers, how would this change impact the customer and their relationship?
What did they know about the reliability and technical capabilities of the workforce they were hiring and how could they really know who these people were? And would the savings they thought they would get in the long run really be enough to justify the cost of making this change?
The companies we surveyed told us that ultimately the most compelling reason to make the switch was that the FMS platform is agile, giving companies the ability to scale up quickly to meet seasonal, cyclical and short term demands. In fact, 71% of users found this to be the case.
The benefits of FMS and the Variable Workforce these companies have realised include the ability to cover a greater geographic region, increased service coverage, increased flexibility, and lower overhead.
FMS adopters have been able to gain more business and have been able to increase their field service work.
They have experienced such success that 76% of them reported an increased demand for FMS just in this past year.
The increased usage stems from the positive results of New Service Lines, New Customers, and Increased Geographic Coverage. The results show that the very reasons they considered making the move to FMS is now leading them to utilise this model to an even greater extent.
Taking all of the survey results into account, we feel confident that the need for and usage of Freelance Management Systems for the Variable Workforce in Field Service will continue to increase over the next year as well.
Companies of all sizes adopted this model have found the results to be overwhelmingly positive. A decrease in overhead combined with an increase in the ability to serve customers equals increased success. As one survey participant summed it up, “Increased revenue and additional customers [are] driving volumes!”