In mid-May, I joined Peoplefluent for a webinar that was focused on the notion of the “contingent workforce tsunami,” a concept that reflects the veritable growth and ultimate evolution of contract talent. I’ve spoken here at CPO Rising before about contingent workforce’s growth (30% over the next three years) and its impact on the global market. The webcast’s content was aligned more towards the “talent” end of contingent workforce management than spend management, but the questions I received during the webcast spanned all avenues within the CWM world.
Today’s CPO Rising article will highlight a few of those questions, all of which are becoming more common fodder as the contingent workforce category continues to grow and evolve.
1. There’s much focus on talent nowadays in managing contingent labor, but what should enterprises be doing in regards to cost savings and cost reductions? Are they still important measures?
These procurement-led goals (“Drive cost savings!”) are absolutely still important to the contemporary CWM program. In fact, the pressure to drive cost savings was the number-one goal of enterprises that participated in the State of Contingent Workforce Management research survey in late 2013. Since contingent labor is on the rise, it makes perfect sense that contract talent budgets would swell, as well, and thus the continued focus on managing the category from a spend management perspective.
The trick to answering this question resolves around the notion of “balance.” As I stated (many times) throughout the webinar: when your enterprise is looking to better-manage a category such as contract labor that involves talent, the measurement of cost savings doesn’t become any less important…it becomes one of three crucial areas that require equal focus along with quality and visibility.
2. What role do alumni and retirees play in the contingent workforce?
This aspect is often overlooked when it comes to contingent workforce management. Only 22% of enterprises have currently implemented a formal redeployment program for retirees and alumni that is integrated into the company’s larger CWM program. When answering this question during the webcast, I was sure to advise attendees on the importance of robust processes for injecting these types of workers into the organization to ensure compliance with internal and external regulations, and also ensure that spend and effectiveness attributes are properly captured. Some enterprises, due to the strong emotional links to former workers and retirees, will fail to apply these processes when leveraging this talent.
3. What are some of the performance measurement attributes of Best-in-Class enterprises?
Part of the webinar discussion revolved around the Best-in-Class contingent workforce management program. While attendees were engaged in regards to the innerworkings of the Best-in-Class program (such as tactical and talent management capabilities), there were several questions regarding the performance measurement attributes within these organizations.
My advice was simple: find a way to measure visibility, cost savings, compliance…and quality (which I realize isn’t the easiest thing to do, hence why Ardent developed the Quality Index Score). There are some questions to ask of your team in regards to this multifaceted performance measurement approach, such as:
- Do we have financial, accounting, and planning data regarding contingent labor?
- Is there a vivid picture of compliance against federal, state, and regulatory policies?
- Do we have a realistic cost savings target for the contingent labor spend category?
- Can key stakeholders (such as procurement, human resources, finance, IT, etc.) collaborate to provide each other visibility into how temporary workers, services, freelancers, and consultants perform against pre-defined goals and objectives?
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