driving business value with flexible talent
As companies continue to struggle with growing talent scarcity, the use of contingent talent, including temps, freelancers, contractors, independents and statement of work (SOW) workers has risen considerably. Along with this growing reliance on flexible talent comes the need to identify, engage, hire, manage and compensate those individuals, all while ensuring compliance with internal and external requirements. Managing multiple classes of workers effectively, however, requires greater resources, visibility and expertise.
According to a 2017 Staffing Industry Analysts (SIA) survey of mid- and large-market buyers, 67% of managers who have contingent workforce related responsibilities spend at leasthalf of their time on these activities, up from 16% in 2004. Since then, the numbers have climbed steadily, confirming the growing complexity around this flourishing component of human capital.
Companies are faced with discovering how they can optimize contingent resources to drive business value. They must consider how to best incorporate independents, contractors and other types of workers in a holistic approach to workforce management. Talent leaders must understand the technological competencies needed to effectively source, deploy and track
workers in their organizations.
To address these complexities, many companies implement managed services programs (MSP). The benefits are numerous, and adopters who initially sought to solve one particular problem often discover that their MSP also enhances practices elsewhere in the business. In the second installment in this series, we will take a closer look at the key benefits of an externally managed approach to flexible talent. But, first, let’s define the need and build a business case.
making the decision for an MSP.
The first step in determining whether you should consider an MSP solution is to examine your current practices and desired future state. This can be done by:
- reviewing the current procurement process
- identifying areas of improvement
- determining scope of services
- conducting a business analysis
Each step requires the input of all critical stakeholders involved in the contingent talent acquisition process, including business leaders, hiring managers, procurement professionals, the compliance office and HR. At the conclusion of the exercise, internal stakeholders should be able to define their goals, recognize the resources needed and identify any obstacles that could hamper the contingent workforce strategy.
Such an exercise will enable your organization to understand its current approach, develop clearly defined goals and set performance metrics for achieving them. Without such clarity, it will be difficult to develop a roadmap or determine what success looks like, which is key to the next step: considering the options for managing the contingent workforce program.
3 ways to manage your contingent workforce.
There are three options when deciding the best way to manage your contingent workforce program: insourcing, employing a broker or a comprehensive MSP implementation.
Determining which is right for your organization depends on goals, volume of hiring, availability of resources and the extent of the in-house expertise.
Relying on in-house staffing agencies is best when the company has adequate volume and continuous demand for a limited number of job profiles. An insourced solution requires significant resources and subject matter knowledge of the supplier landscape, best practices and technology.
2. employing a broker.
Through the broker approach, hiring managers continue to use their own supplier networks, but contracting is administered by the broker. All talent contracts are placed with the broker, and they manage contract termination and invoicing, ensuring applicable laws are followed. This approach can be effective when a decentralized process is preferred, but because the broker plays a very limited role in managing the overall contingent workforce, the benefits are also limited.
3. comprehensive MSP.
Under a managed program, the service provider is responsible for the end-to-end solution, reducing the demands on internal team members and delivering innovation throughout the MSP journey. This is especially effective when the hiring process is complex and transparency and compliance are critical. Working with hundreds of suppliers and supported by an extensive legal and compliance network, a provider has the local market knowledge, tools and resources to make the entire acquisition process completely transparent and to be accountable for its results.
While each model has its benefits, it is important to consider not just current program goals, but also future needs. An insourced solution may be effective for the current volume of contingent hiring, but as demand rises and falls, you may require a level of scalability. At the same time, if your goals are to improve spend visibility or process efficiency, you will need a holistic management approach.
A broker service is unlikely to deliver such benefits. An internal program means constant investments in capabilities and tools. An end-to-end MSP program is effective for managing the entire contingent talent lifecycle, but an employer needs to be comfortable with an external approach.
making the case for end-to-end MSP.
Once the need for an MSP is clear, the next challenge is to make the case for such a solution. When advocating for an external solution, you’ll need to earn executive buy-in. This can be done by presenting the hard costs of using an insourced solution, as well as the soft opportunity costs of keeping the function in-house. It is also important to highlight the many benefits of adopting an MSP, from cost savings and faster time to fill, to benefiting from a partner with the expertise to continually improve the company’s talent strategy.
Also crucial to ensuring unwavering executive support is engagement. Plan to continually communicate and seek feedback from sponsors so everyone is informed of successes, challenges and improvement plans.
Another step that will help set your MSP up for success is maintaining executive sponsorship for the long term; keep top decision-makers involved in the selection and implementation process. Ask them for their input at critical milestones, whether that means selecting the internal project team, being involved in the selection of a provider, approving the contract, supporting change management or signing off on technology investments.
An understanding of where there are opportunities to improve your organization’s contingent talent strategy and a clear idea of where the company should be will help you determine whether an MSP is right for you. With data showing that a growing number of companies are spending more time internally managing this important segment of their workforce, it may be time to take a hard look at an external solution.
If you have questions about the benefits of MSP, the implementation process or how to get started, download our MSP Playbook for a complete practical guide.