CPO Rising has, for quite some time, featured content that speaks to the growing role of procurement in managing the contemporary contingent workforce. Ardent Partners’ landmark State of Contingent Workforce Management research study, published late last year, spends considerable time discussing the value of procurement-led strategies in managing non-employee and non-traditional talent. As the Contingent Workforce Management Framework (Ardent’s definitive blueprint for companies as they develop or enhance their respective CWM programs) indicates, many of the required capabilities for driving efficiencies revolve around traditional procurement principles, such as supplier management, performance management, compliance, and risk mitigation, amongst others.
So, then, in an era that currently promotes “talent” as the defining focus within this industry, how can procurement make a lasting impact? After all, the “people management” skills lie across the hall in human resources, correct?
To be fair, the procurement unit has long been tasked with being the “cost savior” of the modern organization, heralded as a hero during tough times and a leader in corporate growth and development. To shift this focus would be irresponsible, as the more spend actively managed by the procurement function, the better the greater organization is at driving cost savings and improving the bottom-line. With this in mind, those currently tasked with managing non-employee labor must find a way that leverages the best of what procurement has to offer while also ensuring the proper evolution of contingent workforce management.
There are three major aspects of procurement’s true impact on contingent workforce management:
- The realm of total workforce optimization is attainable when procurement and HR work together. Ardent’s research found that nearly 80% of organizations expect total workforce optimization (also known as total talent management) be an accepted part of this industry in the near-future. How can companies effectively manage all talent-based resources under a single, centralized umbrella of capabilities and solutions, regardless of the source of talent (non-employee vs. traditional worker)? It’s not a simple process, but the first step is to ensure that procurement and HR are actively collaborating.
- “Complex contingent labor,” which includes SOW and services, relies on procurement’s supplier management expertise to manage the intricate aspects of projects that leverage this talent. There’s a reason why SOW is often a focal point for companies as they seek the next level of CWM maturity: many of today’s non-employee workers come in the form of freelancers, consultants, and professional services, all of which typically require an SOW as they work or support critical projects. The budget management, milestone-tracking, and performance-measurement components of this type of contingent labor are firmly in the wheelhouse of procurement professionals.
- There are many sources of non-employee talent in today’s market, and not all of them are captured by the CWM program. Freelancer marketplaces, online labor outlets, business networks, social media, the list goes on…. While talent sources are numerous and often help companies engage with the right talent for the right projects / initiatives, the sad reality that nearly erases today’s “talent vortex” is the fact that not all of this non-employee labor is captured by the typical CWM program. Enter procurement, who can assist with capturing talent from cost, spend, supplier, and compliance perspectives.
While the focus of today’s CWM programs is firmly on the notion of “talent,” there is plenty of opportunity for the procurement function to have a true impact on non-employee talent management through its vast expertise and multifaceted competencies when it comes to managing spend, suppliers, and compliance…and, of course, maintaining an effective level of visibility and ultimately, intelligence.
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