“Evolution” is a word thrown around frequently when discussing the contingent workforce or non-employee workforce industry. No matter where an executive turns, he or she is faced with the great question of “Where’s the talent?” In today’s rapidly-changing business world, a company’s talent is what often sets them apart from their peers and competitors.

Flexible, on-demand talent is the name of today’s game. As contingent workforce management (CWM) programs across the globe evolve and improve, many of its innerworkings and capabilities must revolve around the talent utilized by the greater organization. And, in most cases, that talent is services-oriented and requires a statement-of-work (SOW) for more “comfort” and control  as non-employee workers contribute to critical business projects.

The 2014-2015 edition of Ardent Partners’ annual State of Contingent Workforce Management research study found that one aspect above all else was driving more and more companies to improve or enhance their CWM programs: the driving need for talent and specialized skill sets. The “war for talent” rages on across the globe, and those organizations that heavily rely-upon non-employee workers are actively putting talent ahead of cost as they search for the skill sets required to drive true business impact.

However…there’s a missing element here. In order to run a CWM program that places talent ahead of all else, with both procurement and human capital principles and capabilities holding equal power and balance between spend and talent management, companies must not only master the more traditional aspects of CWM, like staffing suppliers and vendors. Businesses today cannot ignore the reach, impact, and value of SOW-based labor and projects; in order to make that next great leap to a talent-led CWM program, SOW management cannot be “skipped.”

The great SOW debate boils down to this: it’s perhaps the most critical component of today’s CWM programs because of its link to many attributes of the greater organization, and companies must consider several items as they improve their management of the SOW arena:

• Expand the reach of VMS into SOW. On the technological side, there is no better recommendation than to leverage the power of Vendor Management System software to drive visibility into SOW spend / projects, improve day-to-day management, enable key competencies and capabilities, and ultimately provide a centralized “hub” from which businesses can gain total SOW intelligence.
• Understand which projects are well-managed, and which are not. Often times, companies find themselves dedicating more resources and time to SOW-based projects in specific areas, such as IT or finance. If the SOW arena within these fields is well-oiled and running well, companies must learn from these projects and apply those learnings to other areas that may be ignored by the greater CWM program.
• Build a fundamental understanding of “where” the company is now in regards to SOW management…and where they want to be in 12 months. The realm of the non-employee workforce isn’t slowing down anytime soon; as such, businesses will benefit from building a long-term plan of how they want SOW management to evolve in the months ahead: better intelligence? Real-time decision-making? Higher frequency of SOW-based projects hitting milestones and delivery dates?
• Prioritize SOW management as much as talent management. It isn’t a negative thing to look ahead to the future; the non-employee workforce is an exciting industry and shows no signs of fading from business view, thus the recent focus on “talent” as a primary program direction. However, SOW management cannot be ignored under any circumstances. It’s a significant bucket of spend, it drives impact across multiple functional areas, and mismanagement can result in inflated budgets and missed milestones for critical projects. That focus on talent? Companies should apply the same level of rigor to the SOW arena.

Stay tuned to CPO Rising for some exciting news later this month regarding Ardent’s third annual State of Contingent Workforce Management research study!

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Tagged in: Ardent Partners Research, Christopher Dwyer, Complex Categories, Contingent Workforce, People, Process, Technology