Tapping Your Most Underutilized Innovation Source: The Contingent Workforce

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It’s no secret that talent is tougher to find these days. From skills deficits and low application levels to intense hiring competition between companies, contingent workforce managers know the search for the right candidates is fraught with challenges.

No wonder, then, that one survey from the Society for Human Resource Management reported more than two-thirds of organizations hiring full-time staff are struggling to fill job openings, with the healthcare and manufacturing sectors reporting the highest levels of recruiting difficulty.

One result of this dearth, understandably, is that the lack of full-time talent translates into a reactionary need for contingent staff to fill the gaps. Scrambling to do this in a cost-effective and timely fashion, contingent workforce managers ultimately approach sourcing workers as a transactional activity.

And who can blame them? When resources are scarce, you’re forced to triage. Whether there’s an essential full-time post or a critical temporary vacancy to fill, few practitioners have the luxury of considering much else beyond fit for the position and staying within budget.

This has resulted in current contingent workforce procurement practices that prescribe, in many cases, mostly transactional communications between buyers and suppliers, to say nothing of internal business customers. But what would happen if new, richer channels of communication were opened and supported?

Through such channels, the capability to communicate necessary transactional information would remain, but they could also facilitate collaboration while encouraging the mutual exchange of information. This could lead to positive changes for all parties involved, instead of merely placing a person in a job. By using broader, more inclusive communications, the conversation expands to include finding reliable sources of talent that can add value to the organization and increase performance results.

This new form of communication — which must be structured to support certain mutually-desired results — can actually open doors for your company, leading to another all-too-scare resource in many businesses: innovation.

By looking beyond today’s standard practices, contingent workforce managers can encourage, measure and reward innovation in their supplier base through an expertly managed external workforce — especially when complemented by a managed services provider (MSP) and/or a vendor management system (VMS) provider that works with you to establish these new communication channels.

To understand how your organization can tap its contingent workforce as a source of innovation, look no further than an innovation leader: Proctor & Gamble.

Through its connect and develop program, P&G has put in place more than 1,000 agreements with external innovation partners, and now more than half of its new product initiatives involve significant collaboration with outside innovators. The consumer products giant has even used crowdsourcing to get new ideas for hundreds of products, leading to the development of highly successful products that have become household names such as Swiffer Dusters, the Crest SpinBrush and Olay Regenerist.

Still, creating a system to foster innovation at any company, at any level, is easier said than done. Innovation certainly doesn’t happen overnight or on its own, and the staffing industry and contingent workforce supply chain are not known as standard-bearers in this category.

A good first step, then, may be to identify what highly successful, intrinsically innovative companies have in common. Firms like Amazon and Airbnb come to mind, but what do they have in common? At their cores, these businesses are centered on technology-based intermediation platforms and ecosystems.

Many successful platforms “become ‘keystones’ and develop ecosystems of complementors,” says Andrew Karpie, research director for services and labor procurement at Spend Matters. “For example, Airbnb has developed an ecosystem of purveyors of relevant services and products. Keystone platforms and complementors form mutually-beneficial, economic relationships that augment the value of network effects, thus increasing the value received by many of the platform users.”

In a contingent workforce and services context, these ecosystems can be used to open up greater business access to workforce, talent and labor-based services that ultimately drive innovation within the enterprise.

But how should practitioners structure their approach to building an innovation ecosystem within their own organization? To learn more, stay tuned for Part 2 of this series, in which we examine the structure of such ecosystems and how practitioners can access these networks by using their MSP/VMS as the starting point.

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