Leveling the Playing Field with a Purely Vendor-Neutral Contingent Workforce Management Model

Spend Matters welcomes this guest post from Allie Ben-Shlomo, executive vice president and chief operating officer at PRO Unlimited.

The pharmaceutical and biotech industries continue to face dramatic operational transformations as competition for talent remains fierce, yet pressure to reduce costs, improve efficiencies and substantiate value continues to ramp up. As the war for talent continues to be waged, developing a cohesive contingent workforce strategy supporting total workforce management will ensure your company is leveraging proven best practices to access talent, drive savings and efficiencies and mitigate risks.

Numerous third parties agree that approximately 40% of the U.S. workforce comprises contingent workers, which include temporary workers, freelancers or independent contractors and workers supplied by larger consulting firms. This percentage of the workforce is forecasted to expand in the short term. In fact, 42% of U.S. executives expect to use more contingent workers in the next three to five years. These executives also recognize that these “non-employees” are a strategic part of the workforce, often supplying mission-critical skill sets and areas of expertise that are core to the company’s success.

More often than not, organizations will utilize traditional methods of acquiring talent through greater usage of staffing firms. However, many HR and procurement executives are recognizing a major paradigm shift that is underway. Traditionally, companies would use one staffing firm to manage the contingent workforce. Organizations would tap one firm to source and manage their contingent labor program. This “master vendor” format naturally limits the participation of niche providers who specialize in a narrow set of mission critical skills. This results in missed opportunities for the end user client to source the best talent of knowledge workers. In nearly all cases, using a staffing firm as a managed service provider (MSP) results in limited program adoption, leading to a lack of enterprise visibility, and higher costs.

A best practice has clearly emerged and continues to be the model of choice for successful companies: A purely vendor-neutral MSP enabled by a vendor management system (VMS) model. Pure vendor-neutrality exists only when the MSP has no staffing capability whatsoever and zero competition with the participating staffing agencies. This approach results in the best talent being provided at the most market-competitive rates. It requires suppliers to compete for each requisition on a level-playing field, which drives the maximum value for an organization. The benefits achieved through the purely vendor-neutral model are compelling. In addition, there is strong evidence that an integrated MSP/VMS model produces an even more successful contingent labor program. A contingent workforce program that uses a state-of-the-art VMS that is owned and maintained by the MSP provider creates an agility to deliver progressive technology solutions with a “quick-to-market” approach.

For example, a multibillion-dollar global healthcare company based in New Jersey describes their positive experience with transitioning to a purely vendor-neutral and fully integrated MSP and VMS. Prior to its current vendor-neutral model, the firm used a staffing agency model in the capacity of a MSP to source and acquire contingent workers across many of their U.S. locations. However, it was difficult to convince their managers that a staffing firm was equipped to address their complex sourcing needs. As a result, they found a significant amount of contingent labor spend circumvented the managed services program, and it was very difficult to control rogue spending.

A cross-departmental team conducted an assessment of the company’s contingent workforce management program due to these concerns. At the end of that process, they determined the best solution for them was a purely vendor-neutral model and to partner with a company that was solely focused on program management. They realized this approach was critical to secure the best talent possible and satisfy their managers’ rigorous contingent labor requirements. This strategic decision has achieved the following:

  • Secured the best talent to support the organizations’ different disciplines
  • Leveraged top suppliers to source talent
  • Assigned practitioners on site to help manage and oversee their contingent labor program
  • Met or exceeded year-over-year savings expectations since deploying a purely vendor-neutral model
  • Overcame “the fox running the henhouse” objection

This dramatic shift in the way this company thinks about and manages contingent workers has inspired commitment and belief in the current model. Through this program, they have improved operational efficiencies and mitigated risks while engaging the most highly qualified and cost-effective contingent talent.

An integrated and purely vendor-neutral model makes a tangible difference both operationally and in terms of business value. When MSP and VMS solutions are consolidated under a single vendor-neutral model, a deeper understanding of the business is always reached. Natural synergies develop, and as a result, organizations are able to optimize cost and quality.

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First Voice

  1. TB:

    With 40% contingent workers in the workforce, securely the home lenders must look at this as a viable income in order to obtain a home loan, especially families with multiple incomes. I am in the process of trying to buy a home, and am trying to obtain a letter stating this type of workforce is here to stay, and cant get it from my 3rd party employer.

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