When Workforce Outsourcing Goes Wrong


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Some time ago, my dad was unemployed and picking up contract work when it was made available to him. In order to procure this contract work, he had to sign up with a few security agencies. In doing so, he eventually landed a full-time gig supervising security guards and investigators for a major supermarket chain. The nature of his employment agreement with this chain was that he was technically employed by the security firm but assigned to the supermarket as a worker- so no company perks, benefits or official employer-employee relationship. This supermarket is well-known for their concepts around creating democratized workforces that enjoy their work, have a passion for what they do and are rewarded in innumerable ways for such efforts. I’ll let you ponder that one.

Despite the purported mindful leadership at the helm, my father had no direction of what was right or wrong- where it concerned his employment. What do I mean?  As a supervisor, his job was to watch the cameras for any potential for theft. He also supervised a staff of investigators and store detectives. In addition, he was required to walk the store to observe customer behavior ensuring the overall security of the premises. When the store closed at night, he was responsible for making sure all remaining customers exited in a timely fashion so he could continue his nightly closing procedure. At least weekly, there would be a customer that felt his presence was “harassing” when he would pleasantly ask the customer to proceed to the nearest register, because they decided to shop for food at 9:50 p.m. and the store was closing in ten minutes. There would be one or two customers who tried to steal goods under his watch and he would act accordingly. There were managers that would gossip about him saying he “had an attitude” because he didn’t spend time chatting with them on the floor. In light of all of this, no complaint was ever logged with the agency he was employed by  and so he continued on doing his job. Yet there were very different views and perceptions about whether he was doing his job,


One day, he is told don’t show up to his normal store. Manager X didn’t want him there any longer, so the agency pulled him- no questions asked. The agency’s response was “that’s a tough store to work in and lots of guys have had issues with that manager- we’ll just reassign you.”  He was reassigned to a new store, things were great there until some months in- he receives notice that another manager wrote to the regional head to say that: “a customer allegedly complained about him harassing them at closing- suggesting that he should not be employed by any of the supermarket’s other locations.” He was never called by the agency to find out his side of the story. He had to proactively seek out answers- which was met with the following answer “we have a lot of issues with the managers there- we’ll get you working with some other clients.”

The problem with this entire situation is the employee-whether my dad or someone else is always in limbo. The supermarket and the agency operated under separate and very different standards of operation- which was confusing to the people working for either of them. The agency signed and enforced a contract with this company that basically prevented them from defending their employees. Their unwillingness to get to the bottom of the alleged complaint against my dad (which affected his employment) told me that they were far more concerned about tarnishing the business relationship than retaining him as a contractor. They set the precedent that, anytime any alleged customer complaint was filed or if a manager disliked any contractor they sent- the worker could expect to be ousted from that location.

He who fails to plan, plans to fail…

The biggest mistake they made in this partnership was not planning for a collaboration that ensured the seamless integration of workers whether directly employed or via the agency. You cannot have a successful workforce outsourcing situation where the rules are different for how employees work and are treated because of the nature of their employment. Since this company was quite possibly the biggest account they had-therefore contributing to a large portion of their revenue; the agency was unwilling to stand up for their workers when these issues arose. In return, they also had a hard time retaining people with this account because of the treatment.

The terms of any workforce outsourcing agreement need to be true to how each entity operates, while also ensuring the fair and consistent treatment of employees. Each party has to be willing to be flexible in their terms-as the relationship continues, to allow for tweaks to the service level agreement in place. As a vendor, your primary focus cannot be the money you will make on the account. You also have to seriously consider your ability to hire and retain the talent you will need to sustain the account.

Here are some other items to consider when entering a workforce outsourcing contract:

1) Did you ask about the company culture? You need to. Understanding and deciding how your workforce will blend with the existing client workforce is an important consideration for how successful you will be.

2) Creating a conflict mediation practice. Just like the client values their employees, you do too (hopefully). If you do, it is important that anyone you hire knows how they can resolve an issue should one arise. There should also be a collective agreement between you and the client of how these issues will be resolved.

3) How do you socialize the onboarding of new staff? Will the client simply have people show up to work on Monday or will there be a formal meet and greet? Whether an employee is a contractor or directly employed by the company, it is important for management to communicate the acquisition of new talent and communicate the expectations for how everyone will work together.

4) What can you do to make “contractors” feel like they are a part of the company? Can you afford to offer contractors a discount or pro-rated benefits? Making people feel more like an employee even if the relationship is temporary, can increase productivity and improve their engagement in the business and operations.

Customers don’t care who employees work for when it comes to patronizing your business. They know that they expect to have a great experience and if something should go wrong- they will be provided with a consistent and speedy resolution. Spending time in the beginning to develop and incorporate some basic talent management practices into your workforce outsourcing agreement will help to assimilate these new people into the current workforce seamlessly.

Ready to develop or improve your talent management strategy for your business? Contact me.

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