Contingent Labour Review: Key Procurement Priorities – Spend Matters Top Papers

In the run up to Christmas and my passing over the Spend Matters UK/Europe reins, we’re going ot feature some of the briefing papers I’ve written over the last eight years. We’ll leave those published in 2018 – we will run thought those again in the first week of January to get you back into work mode and thinking about serious matters again.

Many of the papers are purely based on my thoughts, perhaps with some background reading. But a few involved real research – interviews, surveys and so on. Today, an example of a report that had that sort of research background. Sponsored by contingent labour services management firm Comensura in 2016, it looked at the contingent labour market and was based on interviews with some leading procurement people in that field. That made it particularly interesting and useful, we feel, and still well worth reading today. Here is what we said when we first published part 1.  (Part 2 can be downloaded here).

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We have a new research paper available for download - “Contingent Labour Review: Key Procurement Priorities -  Setting the scene for change”.

This is a paper where the word “research” really means something. It wasn’t just our own Spend Matters views or analysis (nothing wrong with that I should say), but came from combining our ideas with half a dozen detailed interviews with senior procurement folk, each of whom has a particular knowledge of and interest in the Contingent (temporary) Labour spend category.

That included senior category managers and heads of Indirect Procurement, from organisations spanning pharmaceutical, the public sector, energy, food and drink, and travel/ transportation industries. A small sample, but really quite broad ranging, and our thanks go out to them for some really great input.

We have taken their views on the procurement of contingent labour, in terms of both how they see current market and issues, and a more forward-looking perspective, and combined that with our own thoughts based on regular exposure to some of the largest firms working in that market as managed services providers and VMS (software) providers. Indeed, we ended up with so much material, Comensura, the sponsors of the paper, decided we should publish it in two parts – part 1 is out now, part 2 will follow fairly quickly.

And here is a brief extract.

Key Procurement Priorities: Setting the scene for change

Introduction

Over the past 20 years, one of the most significant trends in the world of business and employment has been the growth of the contingent labour workforce.  Whereas 50 years ago, the vast majority of the people working on behalf of a large business (or indeed public sector body) would have been directly employed by that organisation, that is no longer the case.

That development has run in parallel with the growth of outsourcing, and indeed the reasons for organisations using both approaches are similar; in particular, converting fixed costs to variable is a central objective of both outsourcing and greater use of contingent staff.

So if we take a stroll around almost any large company now, physically or virtually, we will find that the receptionists and security team are often working as individual contractors or are employed by a facilities management company. The routine maintenance work may be outsourced to a specialist firm, or there may be a small internal employed management team supported by temporary staff brought in for specific jobs or projects.

At the management levels, we will find more contingent workers covering for maternity leave or holding down a senior interim role whilst the organisation recruits. The IT function may well have a small employed team supported by both outsourced service contracts and a whole host of temporary staff carrying out specific projects - developing new software and apps, managing help desks and so on.

…. The end result is an industry that in the UK was worth some £31.5 billion in 2015, according to the Recruitment and Employment Confederation (REC). Their Trends Report also says that both the average cost and length of temporary assignments is increasing, which suggests a growing importance of contingent labour to business.

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