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AT&T Workers Form an Internal Contingent Labor Pool

December 1, 1994
Related Topics: Contingent Staffing, General Excellence, Featured Article
One of the most profound changes that AT&T implemented since deregulation in 1984 is the restructuring of the company into business units, each accountable for its own profit and loss. With this change has come a constant staffing challenge as some business units grow and others downsize.

To address this issue and establish strategies for work-force management, in 1991 the Basking Ridge, New Jersey-based telecommunications firm put together a committee of human resources personnel. One of the initiatives that the committee considered was the use of at-risk employees as contingent workers to make up a readily available labor pool for the entire organization. The committee's idea was for workers on the AT&T payroll who might otherwise be laid off due to downsizing to fill other jobs within the company that in the past would have gone to outside contractors.

Harold Burlingame, senior vice president of human resources at AT&T, asked me to take the committee's idea, determine the feasibility of such a system and create a business case for implementation. I put together a project team that investigated the concept by researching work-force issues and trends, benchmarking other companies dealing with the same issues, conducting internal focus groups with potential clients and employees, and collecting data on usage and demand for nonpayroll workers.

We determined from our work that it wasn't only feasible but urgent that the company move toward having both a core and an internal contingent work force. So, we developed Resource Link: a unit that operates as an internal temporary services firm, supplying business units with AT&T associates on an as-needed basis.

Initially designed to use only those workers whose jobs were at-risk or who were ready for reassignment, the organization began operations in December 1991 with 33 workers. Today, Resource Link has more than 600 people working for it-approximately 50% of whom joined the organization as a career move, hoping to increase their skills, business knowledge, visibility and marketability. Approximately 45% of all of the associates are in technical positions, and 55% are in general management and professional assignments.

Workers wishing to be a part of the organization must apply and go through a selection process. When choosing candidates to join Resource Link, we look for high-performing employees who have the ability and flexibility to contribute immediately in a variety of assignments. These associates are high-energy people who understand and focus on customer needs.

Once they've been accepted, associates have permanent positions with Resource Link; it's only their assignments that are temporary. (However, associates may accept traditional positions throughout the company at any time.) When employed with Resource Link, the workers remain regular AT&T employees retaining the same salary and benefits that they had when they joined. But rather than being in a traditional job and career path, Resource Link associates move from project to project.

As permanent employees, associates within the Resource Link organization receive performance appraisals. They have face-to-face meetings a minimum of twice a year with staff members who provide them with client feedback. All staff members participate in the performance-review process-appraisals can be given to peers or even to those at a higher level.

The performance appraisals are used to help determine associates' salary increases. Resource Link workers receive pay even when they're between assignments, for a maximum of 135 days. However, idle time for workers within the organization is phenomenally low-less than 2% of total available billable hours.

Associates log their billable hours by calling a specific phone number and punching in the time that they worked on a touch-tone phone. AT&T's Conversant(R) Voice Response System then downloads into Resource Link's billing system. Because the organization functions as a profit center, it bills clients for the services of its associates at an hourly rate based on the assignment. However, its charter is to break even, so its associates are competitively priced.

The benefits of Resource Link are numerous. AT&T retains and develops talented employees, while spending less on severance payments and fees paid to temporary services agencies. (As part of AT&T's commitment to its employees, business units and divisions must contact Resource Link before using agency temps and other outside contractors.)

We in AT&T's HR community believe that having a core and a variable work force is a vital and strategic component of business planning. The concept works whether the company is in a downsizing or growth mode, and provides greater work-force stability throughout the business cycle. And, Resource Link more than pays for itself. The savings to the company in severance pay alone outweigh the cost of the operation.

Personnel Journal, December 1994, Vol. 73, No. 12, p. 90.

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