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By Bayside Group Automotive

Aug 19, 2020

Performance management for your on-hired workforce: why you need it and how to do it

Performance management can be a challenging field for managers to navigate, especially when it comes to an on-hired workforce. While most organisations will have systems in place to performance manage permanent staff, doing so for contract or on-hired workers is often overlooked. This is often due to the fact that companies have limited time and resources, or don’t realise the benefit it can add to their business in terms of productivity, outcomes and enhancing talent pipelines.

With a growing number of people being employed in a casual capacity, it is becoming increasingly evident that there are large gaps in companies’ performance management systems that are seeing them lose out, simply by not maximising on the potential talent of their casual employees. Bayside Group Automotive National Manager, Joe Galea, believes that many organisations are frequently overlooking the value that can be added to their business by supporting on-hired employees with performance management. Together with his team, he developed a system for a client’s on-hired workforce that has seen a dramatic improvement in results.

It’s important to note that when performance managing on-hired employees, it is the recruitment agency, and not the company, that is the employer, so it has to be a joint effort.

Here, we look at how this system was implemented, and the benefits it had for both employers and their on-hired workforce

 

The strategy

After identifying low performance from a client’s on-hired workforce, Joe Galea decided to implement a performance management strategy within the team that measures key components of each team member. This may change depending on the nature of the company and work. It can be as simple as productivity, attendance and attitude, or more detailed to determine key skills and/or attributes. The intention is to detect exactly where low performance is occurring and, not just implement measures to prevent it, but actively work with the employee to improve it.

The Bayside Group Automotive team are able to observe the collected data and identify trends and areas for improvement for each of their on-hired employees. The results saw a dramatic improvement, elevating each on-hired worker’s performance to meet, or be well above, the benchmark set by the client.

 

Changing mindsets and increasing communication

What this allows his team to do, Joe explains, is to implement a new mindset within an organisation about how it responds to its on-hired workforce: a mindset that focused on being proactive, rather than reactive.

Often, if an employee is underperforming and not showing signs of improvement, a supervisor will simply request that we let them go. By using data to gage performance early, Bayside Group Automotive is able to openly communicate with the employee and work proactively with them to address the particular areas that require improvement.

“Unfortunately, a recruiter often doesn’t learn much about an on-hired workers performance until it becomes a problem and it’s too late,” Joe says. “But with a more proactive approach that uses the data we collected, we can track trends in performance and then start a conversation about it with the employee – before it’s too late.”

“This allows for an open, honest and constructive discussion about why this is occurring. In one instance of poor attendance, for example, we discovered that the employee had young children and was struggling to get to work on time. Once we understood these barriers, we were able to work with both the client and employee to reach a positive outcome for all.”

In this way, the client’s on-hired workforce felt a greater level of respect, understanding and communication from the organisation and this, in turn, assisted in increasing their performance across the board.

 

High performing on-hired workers can make ideal permanent staff

Research suggests that 38 percent of on-hired workers will move to permanent employment after one year - many within the same company for which they were on-hired. After 10 years, 56 percent will be in permanent employment.

Effective performance management therefore can assist on-hired employees with developing the skills to become ideal candidates for permanent roles within the same organisation. This then gives hiring managers the option to select candidates from their high-performing pool of on-hired employees, who already possess knowledge of the systems, processes and values of the company.

Research has indicated that it costs almost $10,000 to hire an entry level employee, and upwards of $17,000 for a mid-level staff member. Furthermore, it typically takes Australian companies 39.2 days to fill vacant roles. With these numbers in mind, Joe explains that effective performance management can save companies significant time and thousands of dollars when it comes to recruiting, training and onboarding.

 

Performance management also assists the on-hired workforce

Not only does effective performance management of an on-hired workforce increase the opportunity for permanent placement for those employees, for those who move on to find casual work elsewhere, they will receive better feedback from previous performance to help them obtain their next position. “This strategy not only helps organisations increase productivity, but allows employees to achieve successful outcomes in the workplace and fulfil career goals,” Joe says. “When an on-hired employee performs well on a job, we’ve been able to place them in new opportunities that help build on their career based on the fact that they were a high achiever at their previous workplace.”

 

Increases results and morale – not competition

Research suggests that criticism by a manager has a negative effect on the recipient. And although employees say they want more information about their performance, negative feedback actually does more harm than good. So do performance management strategies that make employees compete for the top position.

For this reason, Joe explains, a constructive approach is needed to address performance issues, alongside improving morale.

“Performance is often an intimidating word, so we approach it differently,” he says. “Once we were able to drill down into the data, we could show employees how they compared to their colleagues. But rather than using this as competitive leverage, we set a benchmark and encouraged the whole team to get there.”

This enabled Bayside Group Automotive to elevate everyone in the team together. It wasn’t a competition, but more like a team effort that not only helped each team member reach the target performance benchmark, but also improved morale, engagement and workplace relationships.

Another positive benefit of tracking performance results was the ability to recognise and reward staff who were able to significantly improve their performance according to the collected data. This strategy again, was able to increase morale and engagement within the on-hired team.

 

How recruitment companies can create improved on-hired performance management systems

For many organisations, their on-hired workforce is an integral part of the daily functioning of the business and its success. These employees are required to adopt the company’s procedures and values just as permanent staff do. According to Joe, though HR tend to onboard on-hired employees no differently to permanent staff, there is little consistency in performance management. And this, he says, is where a third-party recruitment company can play a vital role in strengthening an on-hired workforce.

“HR and Procurement often don’t have the time or resources to be involved in managing on-hired workers and so we, as the recruiter, become advisers to this group,” he says.

“We monitor performance levels and the competency of our workforce for our clients, providing independent feedback to assist productivity. This also aids effective forecasting and recruitment activities.”

Employing a recruiter to manage on-hired staff gives organisations and their stakeholders comfort in knowing their teams are being, not just managed effectively, but also consistently improved until the performance benchmark is reached by each individual.

 

If you are looking for a third-party recruitment company to assist in implementing an effective workforce management solution for your business, contact the Bayside Group today and see how we can help.

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