The Changing Landscape of the Flexible Workforce...

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San Francisco Bay Area SIG Symposium November 12, 2014

The Changing Landscape of the Flexible Workforce - And Why Procurement Should Care

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A Workforce Shift Workers move between industries, jobs, locations and companies more frequently

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CONTROLLER

CASHIER

External Workers Can Have Many Different Roles


JAVA PROGRAMMER

WEB DEVELOPER ELECTRICAL TECHNICIAN

COPYWRITER ACCOUNTANT ADMINISTRATIVE ASSISTANT

BUDGET ANALYST

PHARMACIST

DATABASE ADMINISTRATOR IT PROJECT MANAGER

CIVIL ENGINEER

REGISTERED NURSE

CASHIER

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CONTINGENT

OFFSHORE

External Workers Are Known By Many Names


CONTINGENT

INDEPENDENT CONTRACTOR

OUTSOURCED

EXTERNAL NON-FULL TIME OFFSHORE

FLEXIBLE

NON-FULL TIME

CONTINGENT

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Fast Growing External Workforce

of contingent labor is unaccounted for

spent annually on non-payroll labor

$3.3T 55%

increase in contingent workforce spend in past

five years

41% more workers hired for

temporary roles than the previous year

67%

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External Workforce as a Strategic Initiative


Global Firms in 2020: The next decade of change for organisations and workers Take on more contingent workers. The proportion of contingent to permanent workers will shift in favour of the former.

Dispelling a myth that all temps are in low-paid roles

Last year saw the number of people in permanent jobs stay roughly static and the number of people in temporary work rise month on month.

The surge in temp hiring is not a sign of a malfunctioning economy. It is the face of the future.

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Fundamental Shift in Composition of Workforce

30-50% of total workforce is comprised of non-employees


Temporary/Agency Workers

SOW Consultants

Independent Contractors

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Moving Beyond Traditional to Complex Common patterns are emerging in the market

Project-based Services -  Characterized by well-defined

projects or functional areas

Outsourced/Offshore -  Any combination of off-site, near-

shore, or off-shore services

Business Consulting -  High-value consulting; engaged

typically at corporate level

BPO -  Complete outsourcing of a

category from planning to delivery

Re-billable Services -  Engaging vendors to deliver

services to end-clients

Independents -  Engaging independent

consultants or a community of smaller suppliers

© 2014 Fieldglass, Inc. All rights reserved.

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Traditional: -  Cost savings

-  Pure labor

-  Sourcing & supplier management tools (including rate/markup management)

Complex: −  Project performance

−  Expanded supplier/service performance

−  Compliance

−  Analytics

−  Services and labor

Expanded Focus of Contingent Workforce Management


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V I S I B I L I T Y

E F F I C I E N C Y

Q U A L I T Y C O S T

C O M P L I A N C E

Prevailing Reasons for Contingent Workforce Management


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-  Supplier performance

-  Project status (deliverables & budget)

-  Resources (type & number)

-  Legal requirements

-  Alignment of known/trusted talent to future projects and initiatives

-  Benchmarking

-  Analytics

Visibility – So What?


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Opportunity analysis for a generic scenario

New opportunities -  Improve visibility into post-contract process -  Provide procurement guidance upfront

The SOW Opportunity


OPPORTUNITY FOCUS

Sourcing Contract Decision Support Engagement Delivery Invoicing &

Payment

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-  An external workforce costs “company money”

-  The growing external workforce involves a complete supply chain which needs to be managed, including: -  Competitive bids in line with market -  Benchmarking for rates and cost of services -  Consistent communication/integration with other internal systems -  Validation of workers or delivered services -  Efficient and consistent invoicing -  Supplier quality

-  Complex labor/SOW involves a blend of workforce management and spend management expertise more than ever before

Why Should You Care?



Strategic Program Capabilities Source: “The State of Contingent Workforce Management” 2014 by Ardent Partners

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Procurement: -  Supplier management, sourcing and

procurement principles

-  Visibility into projects, agreements, services and suppliers for future initiatives

-  Supply management perspective

-  SOW-based projects and services

-  Relationships with outside vendors (including services)

-  Procurement-related analytics

-  VMS interaction with existing procurement-related internal systems

HR: − Management of traditional temporary

labor

− Workforce, labor and staffing risks

−  Skill-based talent acquisition

− Workforce planning for current and future projects and initiatives

−  Total workforce view with workforce/HR-related analytics

−  VMS interaction with existing workforce-related internal systems

A Strategic Blend of Procurement & HR Expertise


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Practical Application


CHALLENGE GAIN VISIBILITY INTO YOUR EXTERNAL WORKFORCE

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What’s the Problem?


NO VISIBILITY

QUALITY ISSUES

HIGH RATES

HIGH COSTS

INEFFICIENCIES

COMPLIANCE ISSUES

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Examples of operational challenges

-  ‘PO shifting’

-  ‘Timeless’ T&M

-  Invoice-deliverable time gap

-  Weak contract-consultant link

-  Suppliers are the ‘source of truth’

Some Challenges of SOW Management


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How the Problem is Simplified and Solved


2-click request ––

Benchmarking ––

Mobile

Bidding ––

Approval ––

Reporting & analytics

On/offboarding ––

T&E capture ––

Auto-invoicing


with TARP process & the VMS platform is fully certified

as secure & compliant

in cost savings, attributable to visibility, competitive

bidding & rate card creation

$100M+ FULL COMPLIANCE

provided by integration with ecommerce transaction

system

SINGLE SOURCE OF ENTRY

of the company’s workers and a consolidated view of

the entire population for upper management

CONTROLLED MANAGEMENT

gain visibility and governance improvements

IT OFFSHORE INITIATIVES

in various markets by monitoring key metrics throughout workflows

ASSESS TURNOVER & TRENDS

CUSTOMER SUCCESSES A company in the

FINANCIAL SERVICES sector


CUSTOMER SUCCESSES

in cost savings, due to competitively bidding SOWs and identifying commoditized SOWs

$33M+ achieved by tracking SOW

revisions, enforcing approvals and limits, and

avoidance savings

SOFT SAVINGS

of VMS data to company’s business intelligence tool

for reporting

SECURE TRANSFER

Rate reporting for all managers to better manage

costs

REPORTING

A company in the NETWORK

TECHNOLOGY sector


Reduced tier one vendor distribution by

Reduced overall vendor population by

Reduction in time-to-fill by

45% 50%

20%

CUSTOMER SUCCESSES

Decrease in cycle time for requisition approvals from 2+ weeks to

1.75 days

A company in the CONSUMER

HEALTH sector


The amount of incorrect invoices decreased from

1,500 invoices to

The invoicing error rate decreased from 5% to

.05% <20

CUSTOMER SUCCESSES A company in the TELECOM/TECH

sector

including upcoming PO or contract expirations

USER ALERTS significantly improved

SUPPLIER COMMUNICATIONS


Ø Further expansion into complex services Ø Heavy use of analytics Ø Innovative talent sourcing & management Ø Spend & supplier management Ø Collaboration of stakeholders Ø “Total talent management”

What Is On the Horizon?


Total Talent Management Capabilities Source: “The State of Contingent Workforce Management” 2014 by Ardent Partners

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Thank you!

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Brian Korsmeier [email protected]

Thank You!


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