Recently, there have been many news reports regarding Johnson & Johnson/McNeil's problems with their Pennsylvania plant (and resulting product recalls). While I am sure there is more to learn about this as the matter is investigated, it is likely that a variety of factors contributed to the situation.
Even if you are not formulating drugs or working in a business that requires a high level of quality control, it's important to remember that the recession might have added to (or significantly changed) the list of risk factors related to your workforce strategy.
Here's a partial list of factors that might be affecting your current risk profile:
Reduced Workforce. Who hasn't, right? However, managers and HR have to speak up when a lack of coverage or oversight might be increasing risk at the organization. And just because you use a contractor doesn't mean they were thoroughly screened and trained.
Increased Turnover. Dissatisfaction in the workplace has led many to look for work elsewhere. Is institutional knowledge leaving your company? Do you have junior people doing senior-level jobs (or an under-qualified person at a lower rate)?
Increase in Outsourcing. While this can be a viable and cost-effective way to get things done, controls and procedures need to be put into place to make sure that risks of co-employment and misclassification don't outweigh the savings.
Reduction in Training Programs. Training programs, especially refresher training, is a popular item to slash in budgets. Even before the recession, training wasn't always extended to non-employee classes. While it might seem more costly, good workplace training can increase safety, productivity, and employee satisfaction.
Increased Work Hours. Workers, even contractors, working too many hours can make mistakes or cut corners. This is compounded by high levels of employee dissatisfaction and contractors or vendors who are not tracked or evaluated for quality and customer satisfaction.
Decreased Work Hours or Shifts. The inverse is when hours and shifts are cut, many policies and procedures are ignored or circumvented in favor of expediency. This includes making sure employees and contractors who have had their hours cut are still engaged and productive.
Reductions in Human Resources and Procurement. Last but not least, HR and procurement are usually the first (and last) lines in workforce strategies, policies, and procedures. Keeping tabs on all contractors, ensuring compliance, and dealing with vendors is a lot to ask for departments that can barely keep up with full-time employee issues.
Taken alone, any one of these might be combatable or mitigated, but a number of these together can significantly alter your risk profile and affect your potential costs and/or expected savings.
The key is to realize that each of these is related to your workforce plan. How will you continue to deal with tough economic conditions? How will you ensure that you can continue to meet safety, production, and quality standards with reduced staff? Who is responsible for selecting, managing, and evaluating non-employee workers through your organization? Your answers to each of these will have a direct impact on the risk factors above.
What can you do? For starters, get help with workforce planning and management -- especially contractors and non-employee groups. As most of the economic reports indicate, use of temporary workers is growing, and some contractors never went away during the recession (or, more likely, have grown unchecked and unmonitored). Now is the time.
Most companies are fond of saying how important their people are in speeches, on websites, and in brochures. But when it really comes down to it, they are rarely talking about the complete workforce -- all segments of workers, from full- and part-time employees, to consultants, contractors, and interns.
Keeping them all informed, motivated, and engaged is a huge, coordinated effort. For an organization of any size, this is typically more than human resources or procurement can do alone, especially with recent downsizing.
So when the conversation turns to the costs of engaging your contract workforce or including non-employees in workforce planning, remember the costs of accidents, audits, and quality issues that might arise. And remember that even a temporary employee can have a lasting impact if they are not properly managed.