The Impact of Disruptive Technologies and Solutions on Contingent Workforce and Services Procurement

CPO Innovation

The corporate world is seeing a drastic shift to the contingent workforce. More and more companies are beginning to realize the benefits of having a flexible workforce rather than a full staff of permanent employees and are jumping on board.

Lowered labour costs and better quality are just some of the benefits that innovative companies are now flocking to. However beneficial it might be to hire a contingent workforce, procuring these workers is vastly different from that of the typical workforce, and it’s changing in the coming years.

These are not just small, isolated changes. In fact, they’re likely to have network effects. They’ll occur across different dimensions and in different directions. If you take advantage of a contingent workforce, expect these changes to affect your procurement process.

Complicated, but Revolutionary Changes

Procuring a contingent workforce is going to get more complicated in the near future. The changes to the process might be disruptive but they’ll also be revolutionary. Seeing the contingent-workforce trend become more widespread and popular in the business world, procurement organizations and departments are ramping up their programs, putting new processes in place, and investing in new technologies.

They’re getting ready for the increase in contingent workers by expanding the reach and scope of their programs and establishing separate, distinct disciplines for spend, supplier, risk management, and compliance management for both statement of work labour and staffing labour.

Operations will need to be streamlined and procurement will need to shift from a narrow focus on cost control and project management to a more holistic approach.

A Shift Away from Staffing Agencies

Organizations need to get ready because work intermediation platforms are likely to have a huge impact on the way the contingent workforce is arranged and structured between the workers and the business.

Companies are likely to start moving away from using staffing intermediaries and rather start going direct to private talent pools to find their contingent workers. This drastic shift away from the use of staffing services means companies need to create strong procurement processes for contingent workers that focus on more than just the lowest cost.

Market intelligence, platform capabilities, and engagement-based services will soon be necessary, as will the adoption and management of service categories that typically fall outside of the traditional scope of the contingent workforce.

Spend Category Expansion

Additionally, temp labour has typically been seen as a single spend category, but with the increase use of SOW-based services, categories will need to expand and multiply for the betterment of the overall process. By separating these categories into separate verticals, companies will have greater visibility, understanding of spend, and reduction of costs.

However, they will also need to configure the specific categories, add multiple entry points into workflow, support more complex sourcing methods, enhance reporting, deepen their procurement skill sets and more. Business owners have a lot of work ahead of them if they expect to keep up with the changes in contingent workforce procurement. They need to get strategic and develop programs that will work now and in the future.

Only Time Will Tell

The world of procurement of the contingent workforce is in the midst of a change. Though we’re still in the early days of transformation, it’s clear that business models are changing. New models and channels are being tested and new partnerships are being formed. Business owners will take stronger control over the procurement process rather than depending on staffing firms. These changes will bring risks that companies will need to mitigate. They won’t be able to stay complacent any longer. However, these changes will also bring new opportunities that will drive more value out of relationships.

These changes are a work in progress, and business owners can expect to see maturing and refining in the future. Only time will tell how revolutionary the changes will truly be to the corporate world.

Procurement [is] in the driver’s seat for a fundamental challenge and opportunity that every company in the world will face as talent chooses to work differently, and a core organizational competency is engaging that talent at the time you need it.

3 Ways Contingent Workforce and Services Procurement  

  1. Learn from your internal business users and discover how you can make their dreams (and your dreams) come true.
  2. Examine and figure out which of your third-party contingent workforce service providers have the right stuff.
  3. Proactively “market” yourself across the organization and up the chain of command.

 

 

Author –

Subrata Basu, Director – Global Procurement
(Telecom) Sutherland Global Services