Contingent labour is often seen as a considerable spend category for many businesses and one which can be difficult to bring under control.
Complex, multi-location companies face challenges of sourcing the right skills and experience at the right time, and hiring needs and conditions will differ across the business. Externally, the recruitment market is complex too, with thousands of agencies and various sourcing models from which to select; this is why 40% of global Managed Service Provider (MSP) spend is via a neutral vendor model as it provides the ability to work with a supply chain of temporary recruitment agencies.
Defining the right purchasing strategy for contingent labour in your business is not an easy task, but if you are a procurement professional involved in reviewing the challenges your organisation faces when sourcing temporary workforce, there are key areas you can focus on before looking for suitable market options.
1. Understand the hiring conditions. There are four hiring conditions in a business: frontline positions, project positions, interim management positions and back office positions. It is important to avoid assuming that one approach to hiring will work across the whole business. In fact, the more varied and complex the hiring conditions, the more flexible your procurement solution has to be.
2. Identify the problem. It is essential to understand what drives revenue in your business and how your internal buyers use temporary labour to support revenue generation. In depth analysis of usage, types of roles, current processes, fulfilment and off-contract spend by department will be of great use.
3. Assess the needs of departments with a non-hiring interest in recruitment. This is all about those departments that influence or are affected by the processes and systems involved in recruitment. Some of the main ones are: human resources, procurement, finance, IT and legal.
4. Assess the needs of hiring managers. Nothing is more important than understanding the needs of your customers: the line managers and other internal buyers that depend on the successful sourcing of suitable people into the business. Understanding the needs of managers isn’t just about the actual recruitment of staff: it’s about the whole process, from procurement right through to payment. A wider range of suppliers can be accessed by having a managed service provider at the hub of your supply chain. And because a managed service is separate from the agencies involved, it can more easily adapt to meet the needs of people across your organisation.
If you are interested in controlling contingent labour spend better in your business, we’ll be discussing the subject further at the upcoming webinar ‘Essential tips to effectively manage your temporary workforce’.
☛ Jon Milton is business development director at Comensura