Within a growing number of companies, procurement is being asked to work with HR to assist in creating a long-term strategy for optimizing contingent workforce management. Like many areas of indirect spend that have been traditionally controlled exclusively by other departments – such as IT, travel and meetings, or energy procurement – contingent staffing is being reexamined by procurement at the behest of management eager to bring unnecessary costs and process components to heel.
However, as the category is based on the management of people, an added level of complexity is present in the contingent staffing category that demands special attention. Procurement will need to remove silos and facilitate strong communication with HR in order to successfully streamline the category. In some cases, the level of oversight the category demands is giving rise to distinct category manager roles that can apply their full attention to controlling supplier relations and serving a consultative role with HR.
As the contingent workforce grows, ProcureCon’s event portfolio has also grown on pace with changes in the field, following suit with the addition of a dedicated conference. The latest addition, running July 11-13 in Atlanta, is a new conference: Contingent Staffing 2016. While contingent workforce management has been explored in the agendas of other ProcureCon conferences, this will be the first time a full event has been dedicated to the specific nuances of the category.
The need for the event has partly arisen thanks to large-scale changes in the global workforce and the habits and preference of employees. A desire for flexibility has led to many more remote, yet highly skilled workers, creating the need to effectively integrate them into the workforce despite their non-employee status. The conference will also cover the evolving role for procurement that has come to encompass risk reduction and strategic supplier management practices, a much more involved and high-level role than what procurement might have played as little as ten years ago. Though HR will continue to play a part in the management of contingent workers themselves, the working relationship of the department with procurement is set to become much closer in the short term.
In contingent staffing management circles, supplier consolidation is now a trending topic. While it’s important to create a diverse supplier base, in many cases without a strategic system of control, supplier numbers can quickly climb to chaotic heights, with some companies using close to 300 RPOs. Supplier diversity in a multi-national or global business can also create accountability issues, due to language barriers, local silos within procurement or HR, and the inability to share certain suppliers across disparate business units. Bringing the number of suppliers under a comfortable threshold must be balanced with the preservation of quality. Procurement in 2016 is working out how to identify and retain their top performers while purging unnecessary or underperforming relationships.
The issues created by an expanding contingent workforce tie in directly to procurement’s growing role in organizational risk management. Given procurement’s ability to create strategies for controlling spending visibility and consolidating views of supplier performance, quality control and contingent employee performance management are complementary to the work that the department is already doing. In the Internet age, it’s also ever more critical that all of the suppliers a business works with conform to their organizational standards. A single incident of a non-conforming supplier or contingent employee can have repercussions that can rapidly be amplified through social channels, creating lasting damage to a brand in a short amount of time.
Another component of risk management that procurement with a role in contingent staffing must pay attention to is compliance with local and international laws around hiring and part-time employee benefits. The variations that exist must all be accounted for, each one representing a unique component to be tracked and weighted in a performance management strategy. Ambiguity around what aspects of an employee relationship a supplier is responsible for must be ironed out in the contracting phase of a deal, yet without foreknowledge of employer responsibilities on a case-by-case basis, these types of details have the potential to be glossed over.
Once a contingent worker is hired, while HR may manage them, procurement retains a role in monitoring their performance. Consolidating a view of the performance of a group of individuals naturally poses a challenge, and in many cases procurement is still evaluating solutions and strategies to handle the task. Currently, procurement is weighing the pros and cons of developing an in-house management system, or opting to identify the right external solution providers, another one of the unique challenges of procurement for the contingent workforce that will be featured in the agenda of ProcureCon’s new event. If your organization is managing a contingent workforce, don’t miss the latest in cutting edge strategy and tech at the Contingent Staffing conference in Atlanta, July 11-13 at the W Atlanta Midtown hotel. Featuring the industry’s best and brightest, we hope to see you there.
Visit contingentstaffing.wbresearch.com for more.