Contingent Services Procurement: Do It Better or Get Left Behind

A number of economists I've read lately suggest that the past twelve months have been, to some degree, a jobless recovery. But perhaps labeling the period a "full-time" jobless recovery would be more accurate. Contingent labor hiring is thriving, in fact. And this, of course, is contributing to the rising interest in procurement's involvement in services spending in general, especially in the contingent arena. Consider this WSJ article from Friday that suggests "temporary-help payrolls have risen for 11 of the past 12 months, with the sector adding 16,900 jobs in September, according to Labor Department data released Friday."

Moreover, the article also cites a recent Duke University/CFO study suggesting "Chief financial officers say about 23% of recent hiring has been directed at contract and part-time employees, up from 17% prior to the recession." Moreover, "Companies expect temp hiring to continue growing faster than overall hiring in the next year," the same survey suggests.

The WSJ provides concrete evidence of the trend towards a contingent and part-time workforce, even in the case of unionized companies. Consider the case of Harley-Davison, that "signed a new union contract last month that creates a tier of 'casual workers' with no benefits and no minimum number of hours, allowing the company to call up workers when they're needed." Of course underlying this move to non-full-time hires is the state of the economy -- not to mention the uncertain economic environment (we're not uncertain at Spend Matters. We believe we're currently in recession, but don't let us say "we told you so" in 2011).

In our view, procurement organizations that aren't aggressively ramping up their global contingent workforce management efforts are going to be left behind as their company's actions get ahead of their ability to deliver on effective services procurement programs. But don't think for a minute of "leaving it to HR." Granted, procurement must work hand-in-hand with HR and key business leaders (e.g., IT), a department increasingly dependent on contingent workers. And they should also get to know the managed services provider (MSP) and vendor management system (VMS) landscape as well. HR should definitely be a partner and not the driver of contingent procurement efforts.

If you're curious to learn more about the services procurement landscape and the differences best-in-class providers and partners can make, I encourage you to check out our latest (free) Compass research on the subject:

Selecting Services Procurement Technology – Options, Approaches, and Philosophy

Services Spend -- Beyond Contingent Labor: Achieving And Implementing Savings Across Previously Unmanaged Categories

Making Procurement a Services Spend Ally: Tips and Tactics for Winning over Business Stakeholders and Spend Owners

The Managed Services Connection -- The Evolving Role of MSPs in Services Procurement

Jason Busch

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