Free Research Paper – Contingent Labour Review: Key Procurement Priorities

We have produced several research papers during the course of the past few months, some you may have missed owing to the holiday season. If that is the case, here is a quick reminder of what has recently been published that we believe will be of interest to you – all free to download on registration. The papers are written on a range of topical procurement industry challenges by our resident expert, Peter Smith, and include trends, analysis and advice. They are sponsored by firms that specialise in that particular field and often involve findings from interviews with senior procurement people in that area. Over the next few days we’ll give you a synopsis of each, an extract, and links to the full paper/s.

Let’s start today with:

Contingent Labour Review: Key Procurement Priorities

This paper is sponsored by Comensura, the supply management specialist that manages the supply of temporary and contractor labour into large organisations in the public, private and not-for-profit sectors. It is written in two parts: the first “Setting the Scene for Change,” and the second “Tomorrow’s Market and How To Manage It.”

Part One of the paper looks at how this spend category is increasing in size, changes in demand and the importance of managing it in the right way. It identifies how organisations are currently engaging with the market and their internal stakeholders, and looks at how different organisations have reached varying levels of maturity in how they react and adjust to this change. Using workplace trends over recent decades it sets the stage for how this increasingly important spend area is going to grow and offers advice in terms of using managed service providers and solutions. It is supported with quotes from senior procurement managers as they see the landscape now.

For example: “Some organisations have found it easier to gain compliance to internal processes with an MSP. In effect, the process is ‘contractualised,’ so managers understand that there is a contractual obligation to put requests through the MSP, for instance. This can carry more weight than simply saying ‘you must go through procurement’ or indeed HR! ‘Introducing an MSP some years ago helped us to get our very broad and devolved user base to follow a defined and well-controlled process.’”

In Part Two of the paper, we take our findings from discussions with senior procurement executives about the issues they face and their view of the future for the contingent labour market, and we make recommendations for procurement professionals to get the most out of the considerable expenditure many of them will continue to make.

Much of part two is given over to The Future – Trends and Predictions, asking how the contingent labour spend category is likely to develop, and what procurement leaders need to be thinking about.

It highlights considerations such as:

“Firms will continue to see ‘reducing the use of interim staff’ as a major opportunity area every time there is a cost-cutting initiative. Yet the underlying trends that have driven greater use of contingent labour in the economy as a whole seem unlikely to reverse, including the desire to reduce fixed costs. ‘Whenever FTE resources are squeezed, the business looks to the temp route.’ Specialism, shortages of critical skills, the desire of firms to avoid fixed costs, as well as greater demand for flexibility from the workforce, particularly the more skilled and educated, all add up to future demand being strong …”

“…Technology will continue to become more powerful … Procurement functions will have a fundamental choice - become more savvy and capable, or lose any grip they have on this spend category. In that case, line managers working to HR policies and using technology to manage their contingent labour needs will take over. In the smart procurement functions, there will be a focus on the true end-to-end value issues in the category. ‘Agency margin is a very small piece of the overall value equation.’”

There are more predictions in the paper, but we recommend you read both parts 1 and 2 together to get the full impact of the state of the current and future marketplace.

They are available to download here and here.

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