the changing landscape of the flexible workforce...
TRANSCRIPT
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San Francisco Bay Area SIG Symposium November 12, 2014
The Changing Landscape of the Flexible Workforce - And Why Procurement Should Care
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A Workforce Shift Workers move between industries, jobs, locations and companies more frequently
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CONTROLLER
CASHIER
External Workers Can Have Many Different Roles
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JAVA PROGRAMMER
WEB DEVELOPER ELECTRICAL TECHNICIAN
COPYWRITER ACCOUNTANT ADMINISTRATIVE ASSISTANT
BUDGET ANALYST
PHARMACIST
DATABASE ADMINISTRATOR IT PROJECT MANAGER
CIVIL ENGINEER
REGISTERED NURSE
CASHIER
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CONTINGENT
OFFSHORE
External Workers Are Known By Many Names
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CONTINGENT
INDEPENDENT CONTRACTOR
OUTSOURCED
EXTERNAL NON-FULL TIME OFFSHORE
FLEXIBLE
NON-FULL TIME
CONTINGENT
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Fast Growing External Workforce
of contingent labor is unaccounted for
spent annually on non-payroll labor
$3.3T 55%
increase in contingent workforce spend in past
five years
41% more workers hired for
temporary roles than the previous year
67%
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External Workforce as a Strategic Initiative
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Global Firms in 2020: The next decade of change for organisations and workers Take on more contingent workers. The proportion of contingent to permanent workers will shift in favour of the former.
Dispelling a myth that all temps are in low-paid roles
Last year saw the number of people in permanent jobs stay roughly static and the number of people in temporary work rise month on month.
The surge in temp hiring is not a sign of a malfunctioning economy. It is the face of the future.
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Fundamental Shift in Composition of Workforce
30-50% of total workforce is comprised of non-employees
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Temporary/Agency Workers
SOW Consultants
Independent Contractors
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Moving Beyond Traditional to Complex Common patterns are emerging in the market
Project-based Services - Characterized by well-defined
projects or functional areas
Outsourced/Offshore - Any combination of off-site, near-
shore, or off-shore services
Business Consulting - High-value consulting; engaged
typically at corporate level
BPO - Complete outsourcing of a
category from planning to delivery
Re-billable Services - Engaging vendors to deliver
services to end-clients
Independents - Engaging independent
consultants or a community of smaller suppliers
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Traditional: - Cost savings
- Pure labor
- Sourcing & supplier management tools (including rate/markup management)
Complex: − Project performance
− Expanded supplier/service performance
− Compliance
− Analytics
− Services and labor
Expanded Focus of Contingent Workforce Management
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V I S I B I L I T Y
E F F I C I E N C Y
Q U A L I T Y C O S T
C O M P L I A N C E
Prevailing Reasons for Contingent Workforce Management
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- Supplier performance
- Project status (deliverables & budget)
- Resources (type & number)
- Legal requirements
- Alignment of known/trusted talent to future projects and initiatives
- Benchmarking
- Analytics
Visibility – So What?
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Opportunity analysis for a generic scenario
New opportunities - Improve visibility into post-contract process - Provide procurement guidance upfront
The SOW Opportunity
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OPPORTUNITY FOCUS
Sourcing Contract Decision Support Engagement Delivery Invoicing &
Payment
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- An external workforce costs “company money”
- The growing external workforce involves a complete supply chain which needs to be managed, including: - Competitive bids in line with market - Benchmarking for rates and cost of services - Consistent communication/integration with other internal systems - Validation of workers or delivered services - Efficient and consistent invoicing - Supplier quality
- Complex labor/SOW involves a blend of workforce management and spend management expertise more than ever before
Why Should You Care?
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Strategic Program Capabilities Source: “The State of Contingent Workforce Management” 2014 by Ardent Partners
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Procurement: - Supplier management, sourcing and
procurement principles
- Visibility into projects, agreements, services and suppliers for future initiatives
- Supply management perspective
- SOW-based projects and services
- Relationships with outside vendors (including services)
- Procurement-related analytics
- VMS interaction with existing procurement-related internal systems
HR: − Management of traditional temporary
labor
− Workforce, labor and staffing risks
− Skill-based talent acquisition
− Workforce planning for current and future projects and initiatives
− Total workforce view with workforce/HR-related analytics
− VMS interaction with existing workforce-related internal systems
A Strategic Blend of Procurement & HR Expertise
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Practical Application
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CHALLENGE GAIN VISIBILITY INTO YOUR EXTERNAL WORKFORCE
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What’s the Problem?
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NO VISIBILITY
QUALITY ISSUES
HIGH RATES
HIGH COSTS
INEFFICIENCIES
COMPLIANCE ISSUES
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Examples of operational challenges
- ‘PO shifting’
- ‘Timeless’ T&M
- Invoice-deliverable time gap
- Weak contract-consultant link
- Suppliers are the ‘source of truth’
Some Challenges of SOW Management
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How the Problem is Simplified and Solved
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2-click request ––
Benchmarking ––
Mobile
Bidding ––
Approval ––
Reporting & analytics
On/offboarding ––
T&E capture ––
Auto-invoicing
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with TARP process & the VMS platform is fully certified
as secure & compliant
in cost savings, attributable to visibility, competitive
bidding & rate card creation
$100M+ FULL COMPLIANCE
provided by integration with ecommerce transaction
system
SINGLE SOURCE OF ENTRY
of the company’s workers and a consolidated view of
the entire population for upper management
CONTROLLED MANAGEMENT
gain visibility and governance improvements
IT OFFSHORE INITIATIVES
in various markets by monitoring key metrics throughout workflows
ASSESS TURNOVER & TRENDS
CUSTOMER SUCCESSES A company in the
FINANCIAL SERVICES sector
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CUSTOMER SUCCESSES
in cost savings, due to competitively bidding SOWs and identifying commoditized SOWs
$33M+ achieved by tracking SOW
revisions, enforcing approvals and limits, and
avoidance savings
SOFT SAVINGS
of VMS data to company’s business intelligence tool
for reporting
SECURE TRANSFER
Rate reporting for all managers to better manage
costs
REPORTING
A company in the NETWORK
TECHNOLOGY sector
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Reduced tier one vendor distribution by
Reduced overall vendor population by
Reduction in time-to-fill by
45% 50%
20%
CUSTOMER SUCCESSES
Decrease in cycle time for requisition approvals from 2+ weeks to
1.75 days
A company in the CONSUMER
HEALTH sector
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The amount of incorrect invoices decreased from
1,500 invoices to
The invoicing error rate decreased from 5% to
.05% <20
CUSTOMER SUCCESSES A company in the TELECOM/TECH
sector
including upcoming PO or contract expirations
USER ALERTS significantly improved
SUPPLIER COMMUNICATIONS
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Ø Further expansion into complex services Ø Heavy use of analytics Ø Innovative talent sourcing & management Ø Spend & supplier management Ø Collaboration of stakeholders Ø “Total talent management”
What Is On the Horizon?
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Total Talent Management Capabilities Source: “The State of Contingent Workforce Management” 2014 by Ardent Partners
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Thank you!
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Brian Korsmeier [email protected]
Thank You!
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