One HR app to rule them all: FTEs, PTs, casuals, freelancers, seasonals and agency staff.

Can one HR app truly unite the multifaceted workforce of today? With the rise of gig economy, the evolution of contractual diversification has created a landscape where FTEs, part-timers, casuals, freelancers, seasonals, and agency staff coexist under the same organisational umbrella. Traditional HR software has struggled to keep pace with this shift, often leaving HR teams to juggle cumbersome workarounds. However, a new breed of HR solutions is emerging, promising to seamlessly integrate and manage this diverse array of worker types, transforming inefficiencies into streamlined success.

Can one HR app house all the diverse categories of modern workers under one roof?

HR software has, at key times in its, history struggled to meet the collective needs of the market.

The first one-size-fits-all generation of HR software was welcomed by enterprises, but was relatively inaccessible to smaller firms due to high costs. The introduction of tiered pricing made HR software more affordable, increasing uptake among smaller businesses as they migrated from paper and Excel systems.

However, globalisation changed market needs, revealing the geographical limitations of desktop-based HR software. This led to the development of the current generation of web-based HR software, capable of serving a globally distributed operating model across different platforms, devices, and more.

But the landscape of work continues to evolve.

Contractual diversification of the workforce away from mainly FT equivalents

HR software cannot afford to stand still.

Over the last decade, we have seen a massive contractual diversification of the workforce away from a mainly Full-time equivalent (FTE) structure. This has been driven by the growing gig economy. 22.1% of the UK workforce (7.5 million people), work at least once a week in the gig economy, which is up 50% on 2021, with the number expected to top 14.86m regular workers by 2026.

The workforce norm has now shifted away from the classic co-located FTE structure, to a contingent workforce model. As a result of this journey, the average firm may be composed of FTEs, Part-timers (PT), casuals, gig workers, freelancers, seasonal workers, agency staff etc.

HR software hasn’t kept up with the demands of contractual diversification of the workforce

The older and more outdated systems HR have struggled to keep up with the technical demands of contractual diversification in the workforce and cannot offer the capability to manage all these different categories of contingent workers. As a result, HR teams must create inefficient workarounds using separate Excel and Word files to compensate for the inability of the system to accommodate diversified categories of workers.

For example, freelancers and consultants are a highly transient working population with fundamentally different workflows than employees, requiring different:

• Contract types
• Payment cycles
• Expenses
• Insurance
• Tax treatment
• Performance management processes
• Termination procedures
• The list goes on…

Trying to incorporate contractors into a traditional HR system geared toward FTE employees is like placing a round peg in a square hole, hence HR cobbles together separate Excel files to manage these growing volumes of exceptions.

Although sharing the same employee status as FTEs, part-time employees are an increasingly numerous worker type, which has additional and more complicated processing requirements than FTEs. Many legacy systems only cater for FTEs and the complex pro-rata leave entitlements calculations associated with PTEs are often performed and recorded in separate excel files in a piecemeal and highly inefficient way.

FTE based HR software works on a continuous tenure billing model and the seasonal working stop start model does not fit well into this, as you can end up incurring ongoing subscription fees for intentionally dormant workers – or ones you have simply forgotten about. This again can lead to inefficient workarounds to avoid these costs.

NextGen HR software has adapted and can house a contractually diversified workforce

But are these workarounds a necessary evil? Or can one HR app rule them all, e.g. FTE, PT, casuals, freelancers etc.?

The older HR tools are struggling to adapt to this diversified workforce, but a new range of HR tools are emerging that can solve this problem. This next generation of HR software has workflows that seamlessly address the demands of a diversified workforce, enabling them to house and manage all worker types including FTEs, PTEs, Freelancers, casuals and suppliers.

Part-time (PT) staff are one of the biggest causes of HR teams having to do HR workarounds, but next gen HR software will automate calculations like pro-rata leave entitlement, and easily create special rules for irregular contracts. This will allow PT staff to be processed under one roof.

Next gen HR software has categories for the self-employed so you can house freelancers and consultants. And being highly customisable, next gen HR software allows you to create information screens for any type of data, from uniforms and company cars, liability insurance and pricing, so you can fine tune the system to suit your needs.

The latest HR software that has been developed with a contractually diversified workforce in mind will have developed specialist functionality built around contingent workers, such as agency temps, casuals and seasonals. This means you don’t have to force contingent workers into rigid FTE architecture; these more agile systems will enable you to quickly add and pause such workers and present you with more relevant fields/forms and more sympathetic workflows.

The emergence of next gen HR software marks a significant step forward, offering robust capabilities to manage various worker types seamlessly. By automating complex calculations, accommodating different contractual needs, and providing specialised functionalities, these modern HR tools promise to eliminate the inefficiencies and workarounds that have arisen from massive contractual diversification of the workforce. Embracing next gen HR software is crucial for businesses aiming to effectively manage their contractually diverse talent pools.