MSP case study: meeting labor law compliance in Germany.

November 4, 2019

To accelerate its workforce, an industrial engineering leader expands its program to include new work arrangements and permanent hiring.

MSP case study: meeting labor law compliance in Germany.

optimizing the supply chain

As a leading diversified industrial group with more than 150,000 employees worldwide, this long-time adopter of managed services sought to expand its successful MSP engagement with Randstad Sourceright. Having implemented the MSP across a number of locations, the company identified additional opportunities to enhance cost efficiencies, workforce visibility and business agility.

When the program launched, the company sought to usher in greater efficiency as well as compliant ways of managing its temporary workers across more than 200 locations in Germany. With most of the sites having implemented the MSP, the remainder are still undergoing the rollout. Part of the initial program goals included greater visibility, centralized management and a more strategic supply chain.

Results were immediate as the supply chain was reduced to just 200 from 360 in Germany from hundreds more earlier. Program participation among internal stakeholders also rose as the company was able to significantly decrease rogue spend and use standardized rate cards.

ensuring compliance and workforce transparency

With a growing contingent workforce in Germany and increasing complexity, it realized a solution was needed to address considerable gaps. These included compliance with labor legislation, legal mandates, and workforce safety issues. Working closely with Randstad Sourceright, the company has now expanded the MSP across all of Germany to usher in greater compliance oversight, more robust vendor management and enhanced process efficiencies in its contingent workforce.

One of the most important benefits of expanded services is the implementation of standardized hiring processes, which ensure the company is compliant with all German labor laws and provides workforce transparency – a safeguard that the client didn’t previously have across all of its German locations.

Additionally, a particularly challenging need is complying with Germany’s equal pay law, which requires contingent talent to receive equal pay nine months after being hired. Because the company utilized many suppliers, achieving complete transparency over each individual’s pay from suppliers was a must, despite the complexity of tracking different pay rates at numerous locations. Randstad Sourceright was able to implement a platform to give the client the granular need across its contingent workforce program so it could ensure compliance and also control costs. 

broader access to talent and more precise workforce planning

With savings of approximately 3% on its annual contingent spend of more than €100 million through its MSP, the company is considering additional work arrangements under the program, including statement of work (SOW) services procurement, freelance and gig workers and even permanent hires through a recruitment process outsourcing. As an employer that prides itself on talent retention and workforce diversity, the company is eyeing a more holistic approach to talent.

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