In the past few weeks, I've had the chance to catch up on the phone or in person with many of the leading providers in the VMS-platform arena (i.e., the underlying technology that serves the needs of contingent-workforce procurement) as well as a handful of MSPs (managed-services providers). Many of these discussions have suggested to me a trend that could have negative ramifications for companies that aren't prepared for what will most certainly become a rising demand for contingent talent in the coming quarters as the economy stabilizes, hopefully showing steady growth. The first observation I’ll make is that the gap between the "haves” and the “have nots” in all areas of services procurement (not just contingent labor) will become extremely apparent as the economy turns and contingent-hiring and -services spending picks up.
Simply having a technology platform in place -- not to mention an MSP partner -- will certainly provide some benefits around speed, automation, and risk mitigation as the demand for services procurement picks up as it most always does in the early stages of recovery, serving as a leading indicator for the overall market. But too many organizations I talk to have failed to roll out a VMS-platform capability that captures the greater portion of their services spend (let alone the majority of their contingent spending). In other words, far too many organizations can check the box on having licensed or rented a technology (often as part of a broader MSP deal), but they have limited its usage to only a handful of divisions or locations. Now, this is not by design. But it can take years for programs to go national and global across functions and operating units. And just because a targeted need (e.g., IT) existed in the past does not mean that this is where the biggest pain points will be during a recovery.
In a recovery, the war for contingent talent will heat up quickly. And most likely, given changing demographic patterns, the war for talent on a regional basis in certain geographies where skilled labor is constrained will accelerate rapidly. Those organizations that cannot rapidly vent and respond to resume submissions -- not to mention on- boarding and managing contingent talent in a timely manner -- will be at a significant disadvantage compared to those who can. In addition, there's likely to be a bifurcation of organizations that have access to the right set of benchmark-pricing rates (both regionally and nationally) and related insights, and those that don't -- which will further increase the performance spread between top performers and everyone else. So ask yourself: Even if you’re not ready for a rapid economic recovery across all of your supply chain activities, are you ready for the contingent-labor-procurement crunch that will soon take shape?