The Evolution of Procurement and What It Means for Contingent Labour

In our latest briefing paper written in conjunction with Comensura,  The Evolution of Procurement – and What it Means for Contingent Labour, we look at where procurement is headed in this world of “everything as a service.” We also look at how procurement is addressing complex spend categories like contingent labour to meet the changing expectations of stakeholders.

The paper is free to download here – and in our recent webinar we discuss some of the issues raised in the paper with Jon Milton of Comensura. “The Evolution of Procurement – Alignment, Flexibility and Procurement-as-a-Service” is still available to watch and listen on demand if you missed it - you can catch up with that here.

Just as we talk in the paper about how procurement needs to change and adapt to more varied and flexible requirements coming from our internal stakeholders, so key suppliers – including those who work with us in the contingent labour market – need to adapt and change too. Here is an excerpt from the paper on that theme.

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The Evolution of Procurement – and What it Means for Contingent Labour

Case Study – Contingent Labour (Part 3)

Applying the focus on value and competitive advantage to the contingent labour market takes us into some interesting areas, and is a challenge for Managed Service Providers (MSPs) as well as for category managers. It does not negate the need for any of the capabilities or priorities mentioned earlier (cost control, risk management, administrative effectiveness).

However, real competitive advantage comes from focusing on issues such as access to scarce resources and using the contingent work force as a source of innovation. Speed of action is another essential.

Whilst many contingent staffing requirements are relatively simple to recruit for, demand for some skilled workers and those impacted by legislation (which includes blue collar workers, such as drivers, as well as white collar workers like doctors or security-cleared IT specialists) has proved challenging, particularly where the organisation has become used to paying low margins.

It is simply not possible to dictate rates to agencies or individual workers when skills are in short supply and the work performed is strategically important to the final client.

The challenge for any MSP therefore becomes managing this dynamic, and ensuring that their customers are able to access the workers they need. The MSP must offer flexibility in approach, processes and systems, and have strong supplier management skills itself if the focus is to move away from cost and margin onto aspects such as speed, agility and capture of scarce resource.

So new models of working with customers are emerging, based on their required outcomes and circumstances. The model’s application can change at different stages of the contract lifetime to suit the best interests of the customer.

Some clients may want a more direct relationship with some of the most important agencies, others may be happy to let the MSP play the role of supply market expert. But the days of a “one size fits all” approach for clients and MSPs are gone.

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