Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I’ll be reviewing a whitepaper entitled “Managing A Contingent Workforce” from Corporate United.
There has been a lot of buzz in the field over the past few years about contingent workforce management falling under the umbrella of the procurement function as another “non-traditional category.” But what the heck is meant by “contingent workforce?”
The whitepaper answers that question right out of the chute by saying that a “A contingent workforce is a provisional group of workers employed by an organization on a non-permanent basis and can also be referred to as independent professionals, temporary contract workers, independent workers, freelancers or consultants.” If that is too verbose for you, let’s just say that a contingent workforce is the temps and other non-employees who work within your organization.
The crux of this whitepaper is that the contingent workforce needs to be managed well. Though management has traditionally been assigned to employees of the organization, the whitepaper makes the case for outsourcing that work to a special type of supplier that provides a “managed staffing program” or MSP.
Now, you may assume that an MSP is a temp firm – I originally did – but it is actually a company that coordinates with all temp firms that your company uses. Sounds like a middleman, right?
Well, it is. But the whitepaper does a good job of explaining why it is beneficial to have a middleman and how it may not be as costly as you think.
One of the benefits cited is the MSP provider’s unique ability to monitor rates charged by temp agencies. The whitepaper says that “MSP providers conduct on-going rate analysis using current and historical data from all of its engagements.” I agree that the MSP provider’s broader visibility of the marketplace – compared with using employees, who are likely only familiar with their own company’s rate experience – has value and can help keep costs in check because of the access to objective standards.
Because MSP providers are in a specific line of business and serve multiple customers, they are also likely to have access to the best technology for the job – an investment many companies would not have made on their own. The whitepaper goes on to contend that supplier/contractor performance management best practices could be brought to bear by working with an MSP provider.
In terms of the cost of engaging with an MSP provider, the whitepaper says that most “MSPs utilize a vendor-funded program − its fee (a percentage of spend) is borne by the [temp agencies and other vendors] − which is widely accepted in the industry…[temp agencies and other vendors] are motivated to offer their best price, especially when they consider the opportunity to supply more of the contractors and the reduced marketing and administrative costs.” So the procurement organization would not directly pay the MSP provider for its services.
There are definitely additional things to learn about implementing the MSP concept at your organization. The whitepaper does a good job of covering the basics and getting the reader familiar with how things generally work. If your procurement department is attacking more and more non-traditional categories, it would likely be worth your time to get your own copy of this whitepaper from Corporate United’s Web site (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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