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April 13, 2020 | Time and Attendance | Posted by Ascentis Thought Leadership

How to Adjust Your Labor Model in the Gig Economy Shift

There is a common misconception that manufacturing is one of the last bastions of the “old school” employment model: a facility filled with full-time workers who clock in at the start of their shift, put in their eight hours, and clock out when the shift is done. As anyone who actually works in manufacturing can tell you, however, the current landscape of the industry is considerably more complex than that.

What are your key needs?

The modern manufacturing business employs a variety of workers with a wide range of skill sets and scheduling needs that go well beyond traditional shift schedules. According to a major industry survey, 67% of manufacturing employers said that recruiting and retaining a qualified workforce was their number one concern going into 2020. The same survey found that employers are taking a broad range of approaches to the ongoing shortage of skilled workers, with internal training programs, expanded hours for existing workers, continuing education, and hiring from temp services leading the field.

Clearly, the manufacturing world is in a state of change. In order to stay competitive, employers need to be more adaptable than ever before. Making a clear assessment of what changes need to be made requires an understanding of the workforce as it stands. Drawing up a labor model that compares an employer’s workforce needs with required skills and training for employees is a reliable way to visualize where your manufacturing business stands and what adaptations will be needed going forward.

The modern manufacturing workforce still includes those traditional full-time shift workers, of course. That tried-and-true model will continue to be the heart of many manufacturing businesses for the foreseeable future. Now, though, those full-time (F/T) workers are increasingly being complemented by more short-term employees, part-time (P/T) employees, contraclabor (CL) employees, and even freelance employees.  Below is a chart on responsibilities your organization would have per full-time, part-time, and contract labor employee. 

Manufacturing blog chart for q2 campaign
HR Responsibilities per Employee Type Chart

Building a labor model

You can envision the new labor model as a series of three concentric circles. At the core are your full-time staffers and shift workers. The middle ring consists of part-time workers and interim professionals, possibly provided by temporary employment agencies or staffing firms. The outer ring is made up of contractual talent and contingent labor – extra workers brought on for a particularly large project, perhaps, or specialists in types of work not typically performed by your business. By looking at this array of employees on a job-by-job basis, you can more easily determine your workforce needs for each project and plan ahead for necessary hiring.

Manufacturing blog labor model figure
New Labor Model Diagram

It’s also important to keep in mind that each of these categories of workers have different employment considerations from a payroll and human resources perspective. For instance, all workers need to provide basic demographic data, proof of eligibility for employment (generally an I-9 form), and proof of any certification, credentials or training required for their specific role. Those requirements fit into the core of the circles we mentioned before.

Moving to the second ring, part-time employees may or may not be eligible to enroll in benefits programs, depending on your company’s policies. The same goes for performance reviews and performance management – some employers require them for part-time workers, some do not. Full-time employees, of course, require both benefits enrollment and performance management.

At the outer ring of our circle, contract and contingent workers generally do not qualify for benefits or performance management. They may or may not be required to provide certain payroll-specific data related to tax filings, workers’ compensation, or unemployment insurance, depending on your business’s location and industry. Again, these are all required considerations for full-time workers.

By taking stock of what is and is not required of workers at every level of your labor model, and what obligations your business has to each, you can develop a clearer idea of what your actual workforce needs might be. Is it more cost-effective to employ a large percentage of full-time workers for an upcoming job, for instance, or will a mix of full-timers and contract employees prove to be a better investment? To see other time saving tactics, download our 16 Critical Time Tracking Statistics Every Business Should Know infographic. While the answers will vary for every employer and every job, developing a better understanding of your labor model in relation to the current manufacturing landscape will help your business make sound decisions for the future.

With more than 35 years of experience in providing Software as a Service (SaaS) solutions, Ascentis thought leaders have become a respected source for insights, tips, and innovations in the Human Capital Management (HCM) space.