4 keys for effectively optimizing the GovCon workforce
Gettyimages.com / Teekid
Adopting a technology-first mindset is only step one in the overall direction, writes Raju Karki of Karki Consulting Group.
Workforce optimization in the modern workplace is complex, to say the least.
Between managing distributed teams, different shift schedules, state labor laws for overtime and double overtime, adhering to the Service Contract Act (SCA), HR governance, and resource planning, businesses have much to consider in today’s digitally led, inclusive work environment.
Continuous training, competitive pay, rich benefits packages, careers, and growth opportunities are important factors for recruitment and retention. Oftentimes in GovCon, single contracts may require filling in hundreds of Full Time Equivalents (FTE).
Without automated processes, systems, and tools, navigating such a complex process from hire to retire in today’s business landscape will be extremely challenging. Identifying the most effective way to create and deploy efficient teams is not just an operational advantage; it’s a business imperative.
This is particularly true for government contracting firms working within tight deadlines and budgets, rising costs, and extremely high customer satisfaction benchmarks. The industry is equally inundated with competitive hiring and retention scenarios, especially with security clearance professionals.
Government contractors cannot afford teams that are too lean, bloated, under-skilled, or overkilled. Effective workforce management is also important to maintain employee retention, amicable customer feedback, and improved employee morale and well-being. Most importantly, for the GovCon sector, poor workforce management can lead to revenue losses, contract overruns or underruns, missed timelines, and budget constraints.
In this article, I outline some strategies to help workforce optimization in government contracting firms.
Capitalizing on Modern Technologies to Optimize the Modern Workforce
With three-quarters of the modern workforce embracing data analytics and AI, most government-contracting employers are likely doing the same. For those who haven't, the use of AI is imminent. AI and automation can easily automate trivial and repetitive tasks like managing attendance sheets, work shifts, time-tracking, and event-driven automatic notifications.
As is the case in most service-oriented industries, the resource needs of government contractors are often dictated by the scope of work (SOW) outlined in the Request for Proposal (RFP) and ensuing contract awards and modification. Contractors often rely on pre-formatted resume templates to align with labor categories outlined in RFPs.
Generally, companies have the HR team map the resume and bio received from different platforms to a specific company format. But now, with the advent of effective AI-driven Applicant Tracking Systems (ATS), contractors can automate resume parsing and keyword extraction and store the data in a structured format.
Enabling reporting and matching candidate profiles in response to SOW. This substantially reduces resource acquisition time from the RFP stage while matching to job description with the right skills, certifications, and experience levels.
Although many analytical techniques are available, the three most useful forms of analytics are predictive, prescriptive, and diagnostic. Where predictive analytics uses algorithms and historical data to help anticipate future workforce trends, prescriptive analytics uses historical data to analyze and also suggests the next best course of action.
Diagnostic analytics, on the other hand, is like a health checkup but for the workforce and can help identify underlying causes of workforce-related issues and suggest areas of improvement. Overall, it is critical to continually have the capability to monitor projects both at a macro and micro level, which will boost the productivity of the workforce.
Mobilizing Large Technology Service Providers for Relevant Insights
Today, leading payroll services providers, such as ADP, Paychex, and Gusto, process most U.S. corporation payrolls. Since these organizations have access to large data repositories, these data can be modeled to predict hiring trends, market pay, benefit packages, find gaps, and improve overall talent management processes.
Contractors can further leverage this data to align with market trends and insights into new hire recruitments. Additionally, workforce analytics from these platforms can recommend staffing needs, upskilling plans, and compliance loopholes to maximize the output of the human resource function.
Firms can also utilize their own data set and industry to efficiently manage contract-based roles, enabling them to better engage with temporary and project-specific hires. These analytics can substantially streamline onboarding, clarify role definitions, and ensure timely and efficient payroll management. Similarly, they can help improve employee engagement and productivity.
Since government contracting is predominantly project-based, the very nature of the work poses challenges in timekeeping, payroll processes, managing benefits and contributions, monthly and quarterly reports, and auditing. Additionally, the U.S. labor laws and regulations vary from state to state, making compliance complex and challenging.
For example, California mandates strict tracking of work hours, with the workers having to clock in and out for non-exempt employees. Meanwhile, other states may have less strict rules. Workforce optimization needs to adapt to these state laws, maintain accurate records, and minimize non-compliance risks.
Inefficient time management may sometimes evolve into a serious and larger operational threat. Non-compliance with labor laws often leads to financial penalties, damaging the firm’s reputation, employee morale, and relations.
A well-planned workforce optimization system can easily mitigate these hidden costs. Organizations can efficiently manage multiple projects, and payroll schedules within a unified framework by enabling seamless integration and interaction between all business systems and existing platforms.
Managing Revenue Loss in Time and Materials (T&M) and Cost-Based Contracts
Another direct impact of technology in workforce optimization is avoiding revenue loss in Time and Material (T&M) and Cost-Plus Fixed Fee (CPFF) contracts. For example, unfilled and open positions in T&M and CPFF lead to direct revenue loss since contractors cannot bill for unrealized costs.
By integrating real-time workforce tracking tools to help track billable, overhead, administrative hours, and labor utilization, contractors can be better equipped with real-time data for optimal resource planning.
Futureproofing the Workforce through Strategic Upskilling
The GovCon sector is currently inundated with demand for high-skill-based jobs like cybersecurity, engineering, technology, and data analytics. While new talents are entering the job market, firms need to upskill the existing workforce and get them up to speed. Employees who are trained to adapt to the rapidly changing world of regulations and technology will find it easier to adapt to a new trend.
Firms need to make upskilling programs a norm. One such approach is targeted training programs for certifications and federal compliance. Training employees for certifications like the Certified Federal Contract Manager (CFCM) or Project Management Professional (PMP) ensures they can navigate the complexities of federal regulations.
A continuous learning path might make more sense for newer and evolving technologies like AI, Machine Learning, and cloud computing. Establishing a foundation for employees to engage in and learn these new technologies not only boosts employee morale but also positively impacts employee retention.
Conclusion
In conclusion, like the rest of the world, government contracting firms must adopt a tech-first mindset. As discussed, leveraging technology in workforce optimization boosts productivity and helps with employee retention. Similarly, futureproofing the workforce has to be at the forefront and firms have to adopt it as a business strategy.
Having said that, establishing a workforce optimization strategy is not the end. Continuous monitoring and evaluation exercises should be performed to identify areas for improvement. Workforce optimization is an iterative process, and regularly measuring workforce management metrics like employee satisfaction and KPIs will give firms a general idea of how the workforce is performing over time.
The goal should be regularly monitoring and adapting to emerging tools and technology to combat evolving workforce needs and compliance with state and federal labor laws.
Raju Karki, CEO of Karki Consulting Group