Mais conteúdo relacionado The Future of Contingent Workforce Management - White Paper1. The Future of Contingent
Workforce Management
Sponsored by:
Christopher J. Dwyer
Research Director
Ardent Partners
October 2013
2. The Future of Contingent Workforce Management
REPORT SPONSORSHIP
1
The views and opinions in this report represent those of Ardent Partners at the time of publication.
Sponsoring companies have had no measurable influence on the content and research in this
report. The contents of this research report are the exclusive property of Ardent Partners. Please
direct any comments or questions regarding our research sponsorship policy to Ardent’s Chief
Research Officer, Andrew Bartolini at abartolini@ardentpartners.com and/or 617.752.1620.
Sponsor: DCR Workforce is a vendor-neutral contingent workforce management solutions to
help clients maximize the contributions of their agency contractors, freelancers and project
teams. We provide the guidance, hands on assistance and technology needed to achieve optimal
results. Smart Track, our proprietary cloud-based talent management platform, assists in providing
customizable VMS and MSP Solutions to manage, procure and analyze your talent with complete
transparency, real-time control, high performance and decision-enabling business intelligence.
DCR Workforce is a certified minority and woman-owned company that has received numerous
awards and recognitions for its commitment to support diversity businesses and minority
employment. For more information, please visit the DCR website: www.dcrworkforce.com, and
learn more about DCR on Facebook, LinkedIn, and Twitter
Contact:
Name: Debra Bergevine
Title: Vice President, Marketing
Tel: 508.380.4039
Email: debra.bergevine@dcrworkforce.com
Link: www.dcrworkforce.com
©2013 Ardent Partners Ltd.
www.ardentpartners.com
3. The Future of Contingent Workforce Management
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It’s no secret that organizations are increasingly relying-upon contract talent for a variety of critical
roles, many of which have significant corporate ramifications. In managing a contemporary
contingent-based workforce, executives across the globe must fine-tune their strategies to
anticipate a future in which contract talent is an even bigger piece of the corporate puzzle, and
look to a series of next-generation concepts and technologies to drive true value out of this
complex category, all while building an effective (and deep) framework that supports all avenues
of the contingent workforce umbrella.
Contingent Workforce Management: An Evolving Space
Contingent labor was once an understated component of the modern business, relegated to
seasonal assistance or temporary fill-ins while full-time equivalents (FTEs) were on vacation or
leave. While some organizations saw fantastic value in contract talent (mainly via independent
contractors (ICs) hired for their specific skill sets), the category was not high on the radar screen of
top-level executives. Procurement departments may have had a strategic eye on the category
from a spend management perspective, but the industry was years away from transforming into a
true enterprise force.
It wasn’t until the economic downturn of the last decade that contingent labor (also known as
contract labor) began raising true corporate attention. Forced to “do more with less” and hesitant
to make permanent investments, corporations turned to contract talent to fill critical needs across
the organization. Although it took some time after the crisis for some companies to see an uptick
in demand for their products and services, there was a global-wide requirement to prepare for the
inevitable recovery and contract talent proved to be an ideal means of supporting that notion.
Soon after the economic downturn, a new concept arose: the contingent workforce umbrella. This
“umbrella” encompassed the contemporary scope of contract talent, including:
Traditional temporary talent, sourced via staffing vendors, agencies and suppliers
Complex contract talent, which is comprised of SOW-based projects, professional services,
consultants, etc.
Independent contractors (ICs)
Evolutionary concepts not seen in the past, such as “enterprise-workforce-as-a-service”
and total talent management
What was truly interesting about the contingent workforce umbrella was the fact that each “level”
warranted its own specific capabilities, competencies and processes (as well as technologies). This
forced organizations, with both light and heavy contract talent numbers within their total
workforce, to expand their programs as a means of better managing the various complexities of
this category, including spending, suppliers, performance, quality, effectiveness and various risks.
©2013 Ardent Partners Ltd.
www.ardentpartners.com
4. The Future of Contingent Workforce Management
3
Over the past few years, the use of the contingent workforce umbrella has dominated the
contingent workforce management (CWM) industry. Companies that have “mastered” the art of
traditional temporary talent management are now focused on the next great venture: the SOW,
services and IC aspects of the umbrella. The evolving nature of the contingent workforce umbrella
will form the veritable foundation of CWM programs of the future.
Current Considerations for Contingent Workforce Management
As detailed in the previous section, the contingent workforce umbrella is a powerful mechanism
to both describe and manage the current continuum of contract talent. However, within that
continuum exists a series of issues that nearly every organization using contingent labor and all of
its contemporary forms (SOW, services, independent contractors (ICs), etc.) face. These issues
include (but are not limited to):
Make or buy: the role of outsourcing the management of contingent labor. Many
organizations face a common dilemma in regards to their growing contingent workforce:
manage the spend, suppliers, capabilities and greater program in-house, or, outsource the
management of this critical category to a third-party provider, such as a Managed Service
Provider (MSP)? For companies that choose to manage its CWM program in-house,
difficulties can crop up in the form of mismanagement of certain labor types (specifically
independent contractors and their associated risks of federal audits, misclassification and
co-employment; without robust processes, there is often a lack of visibility into
classification risks) and a lack of visibility into the more complex aspects of the contingent
workforce, such as SOW-based projects and services. Even organizations currently
outsourcing the management of contract talent to an MSP are not driving the full value of
these outsourced services, as some enterprises will focus on the MSP’s capabilities in
managing traditional temporary labor in lieu of tackling complex talent.
o Although outsourcing the management of contract talent may not be an option
for all enterprises, there are a variety of benefits to letting an MSP, Vendor
Management Systems (VMS) or hybrid solution handle the day-to-day operations
of contingent workforce management. Automated processes will be fully-linked
for maximum visibility and effectiveness, while the expertise inherent with an
outsourced services provider can help tackle even the most complex of issues
(including misclassifications or audits related to independent contractor
engagement).
o In-house programs are best-suited for those organizations that have a small
contingent workforce, including those organizations that don’t regularly utilize
SOW-based talent or professional services (including ICs). When companies blend
in the management of the varied components of the contingent workforce
umbrella, the inherent complexities can sometimes prove to be outside the
expertise of an in-house program.
©2013 Ardent Partners Ltd.
www.ardentpartners.com
5. The Future of Contingent Workforce Management
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Reach of the program. Whether or not CWM is outsourced, some enterprises struggle
with the “reach” of their program. How far should the program extend? Are all suppliers of
contract talent currently captured within the program, not just staffing agencies? Are all
inherent risks addressed by the program’s capabilities? Can the program effectively seize
control of SOW-based projects and services across the entire organization for maximum
CWM visibility? The reach of a CWM program is just as critical as its capabilities and
competencies.
Limitations of data…and intelligence. Intelligence has become a hot “buzzword” within
the contingent workforce management stratosphere, and rightfully so. With CWM
becoming increasingly complex in recent years, data and the business intelligence it can
support has risen as the most valuable component of any contract talent management
program. Data into current spending, suppliers, projects, associated expenses, contractors
and other avenues provide a perfect picture into the future of contract talent utilization.
Contingent labor is actively increasing year-over-year within the average enterprise, and
any information, or intelligence, about what this program or category could look like a
year (or more) from now is a valuable asset in greater corporate planning.
Where to automate? One of the primary pressure-points of any CWM program is the
overarching notion of automation. Which processes are ripe for technology
enhancement? How can technology (i.e. VMS) address all of the needs of the current
program? Automation will always be a center of focus, since classic processes, such as
staffing supplier management and requisition-development, are often the first areas to be
addressed by new technology. However, as the contingent workforce management
umbrella continues to evolve, automation must be a factor in meeting the needs of
complex contract talent management; aspects such as SOW project management,
independent contractor compliance, identity management, payment triggers, milestonetracking, etc.
Who owns the program? In the greater “game” of contingent workforce management,
many teams find themselves with more “coaches” than “players.” Various units, such as
procurement, human resources, operations and finance, all have a hand in managing the
typical contingent workforce management program providing their specific expertise:
procurement is adept at managing the complexities of SOW and services, HR brings an air
of talent management to the program, . But, too many leaders can take away from the
focus and effectiveness of the program. When critical decisions are to be made, who has
the final call?
Contingent Workforce Management: The Future State
There may be no other space in business today quite like the contract talent industry. Not only is
the utilization of contingent labor increasing year-to-year, this is a category that can have major
©2013 Ardent Partners Ltd.
www.ardentpartners.com
6. The Future of Contingent Workforce Management
ramifications across all functional areas, business units, and corporate divisions. Not surprisingly,
Ardent Partners believes that the future of contingent workforce will take many shapes.
5
The Next Generation of VMS Technology
The interesting thing about contemporary contingent workforce management is the
technological support that can enhance all facets of the modern CWM program by automating
key capabilities, providing data and insights, and actively managing the more nuanced
components of the contingent workforce umbrella. Within this technological realm, VMS solutions
are actively preparing for the “next generation” of the CWM industry through a variety of new and
different attributes.
VMS technology, originally designed years ago as an offshoot of e-procurement, served as a
consolidator and manager of the wide variety of staffing suppliers / vendors within the typical
organization’s CWM program. These solutions evolved over time to automate and support
requisition management and contract talent spend management. In the future of the contingent
workforce industry, VMS technology will still be a prominent means of centralizing, automating,
managing and support key functional processes within the average CWM program. However,
there are aspects to CWM that VMS solutions will revolutionize, including:
Simple reporting to deep-dive / actionable analytics. Running simple reports with
spend or supplier insights, are often an everyday part of leveraging VMS solutions in dayto-day contingent workforce management. However, having the capability to not only
drill-down and deep-dive, but to have true intelligence to anticipate future demand of
contract talent, is a differentiator that positions these platforms well in the future.
Full management of SOW-based projects and services. Industry professionals have
begun to understand the relative significance of complex contract talent, which includes
SOW-based projects, professional services and contractors. These items can cause
headaches for even the most hardline procurement executives because the reach of these
projects can extend into nearly every functional unit across the enterprise, making the
ability to track and manage them a massive undertaking. Aspects such as milestonetracking, delivery date performance, payment triggers, and qualitative capabilities are on
the horizon. And while some VMS offerings tout their ability to manage SOW and services
in this fashion, a fantastic indicator of the future is when this general capability is
commonplace in all CWM-related technology.
Integration with talent management systems and processes. As the industry is
currently learning, talent is a key component of the future of contingent workforce
management. And with talent becoming just as crucial a factor as cost or quality in this
arena, it’s important for technology platforms to support the talent management aspects
of the future CWM program. Capabilities will be developed for easily tapping into “already-
©2013 Ardent Partners Ltd.
www.ardentpartners.com
7. The Future of Contingent Workforce Management
known” talent, as well as social media platforms integrated deep within existing
technologies (and programs) to find and retain new talent.
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Talent’s Role in the Future of CWM
Corporate projects often utilize contractors and other freelancer-type temporary talent due to
their unique and varied skill sets and industry-specific expertise. It is often said that, within the
greater CWM industry, independent contractors are the “highest level of talent available.” With
this in mind, organizations must reevaluate their talent engagement and management strategies
to ensure that their programs in the future run on the fuel of top-tier talent at nearly every
contracted position. CWM will no longer be a simple game of finding, hiring and utilizing contract
labor; it will become an arena that, over the next five years, will experience a seismic shift to a
talent-led program…and this is where next-generation talent engagement and other nuanced
strategies (such as a reliance on social media) will come to the forefront:
Developing more than just a talent pool. When most organizations think of a “talent
pool,” they picture a simple list of names from which they can pull talent when specific
needs arise. However, the talent pool of the future will evolve into a multifaceted network
that not only includes “already known talent,” such as retirees, alumni and past
contractors, but also communicates regular insights and updates (i.e. dates, locations,
assignments, etc.) into upcoming and ongoing projects. This capability will help identify
projects that align with specific talent within the pool and generate a means for
communicating and engaging with this talent, which brings us to…
Social media as a strategy for engaging talent. Although the advent of social media as
an effective business is no longer the new kid on the block, the fact is that social networks
are a largely untapped channel to engage contract talent. By leveraging Twitter, LinkedIn,
Facebook, and other social media/business platforms, organizations can ensure that they
are regularly-linked to new talent that may align effectively with their corporate project
needs.
Managing the evolving concept of “enterprise-workforce-as-a-service,” also known
as eWaaS. Talent is currently engaged from a variety of outside sources, but not always
centrally-managed and tracked in a robust manner. The concept of eWaaS entails deriving
talent from online labor marketplaces and online staffing suppliers. These nascent portals
may be an ideal means to source contract workers and services for both high-leverage and
low-wage positions, but activity on this front is not often centralized. The VMS of the
future will help mitigate risks on this front, including managing rogue spending, ensuring
compliance to internal and federal policies, and properly aligning talent generated from
online sources to high-priority enterprise projects.
©2013 Ardent Partners Ltd.
www.ardentpartners.com
8. The Future of Contingent Workforce Management
Intelligence and the Next Wave of Analytics
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Enterprises across the globe consistently look for a “leading edge” in their operations, and this
driving force applies to all enterprise functions. Within the contingent workforce management
world, end-user programs typically yearn for valuable intelligence which they can use to evaluate
their processes, understand the ramifications of contract talent, and build a proper future
viewpoint that can serve as the basis of total planning, forecasting and budgeting.
The notion of intelligence truly revolves around the concept of a “next wave” of analytics and
reporting (Note that some of the following capabilities are available in select offerings but are not
yet widely available). As discussed earlier in this report, simple reporting and data extraction
serves a more traditional functional purpose rather than a truly strategic one. The CWM program
of the future requires the next wave of analytics that will include capabilities that can effectively:
Pinpoint the moment a contract talent-led project misses a milestone or is in risk of
going over budget. SOW and services are dominating the current CWM landscape; there
is no reason to think that this will change in the future. Projects linked to contract talent
often have significant corporate ramifications (technology deployments, fiscal or tax
deadlines, etc.), so untracked milestones and missed delivery dates not only throw off the
course of these projects, but can also wreak havoc on enterprise-level goals and objectives
and associated budgets. Next-generation analytics will address these issues by providing
real-time updates and alerts, while providing execs and managers with a full dashboard of
all corporate projects tied to contract talent.
Drive a 360-degree view of all aspects of the contingent workforce umbrella. Social
media networking, talent pools, staffing agencies, SOW-led projects, professional and
recurring services…the contemporary CWM umbrella is quite complex, so much so that
even the most trained eyes cannot dig deep enough to know what’s going on across the
enterprise. The next wave of analytics must provide intelligence into every component of
contingent workforce management and allow program managers the ability to track
spend, suppliers, services, projects, milestones, delivery dates, risk assessments and
compliance control aspects.
Provide a vision of the “future” through deep forecasting. The future of CWM takes a
page from the Chief Financial Officer’s playbook in utilizing the intelligence gleaned from
analytics to accurately plan and forecast for the future. Deep knowledge of current
contract talent (which, of course, revolves around the contingent workforce umbrella) can
go a long way in understanding attributes of the program weeks, months or years from
now, allowing program managers to build more accurate budgets and tackle projects that
can benefit the greater organization. For example, forecasting utilization of contract talent
12 months out can help corporate executives align the right resources (both financial and
talent-wise).
©2013 Ardent Partners Ltd.
www.ardentpartners.com
9. The Future of Contingent Workforce Management
Summary and Recommendations
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The future of the contingent workforce industry hinges on a variety of aspects, including the value
of intelligence, the benefits of outsourcing versus an in-house program, and the concept of talent
as the primary focal point of the forward-looking CWM program. The following items should be of
major consideration for any organization that wants to take their program into a new and
improved archetype:
Understand the benefits (and challenges) of an outsourced model and identify the
specific areas that require expertise and automation. The interesting thing about the
contingent workforce industry is the many complexities that play into the contemporary
CWM program, from analytics and identity management to talent management and
requisition development. The modern program can benefit from outside expertise and
automation through a holistic series of technology-supported processes and consistent
guidance on managing SOW-based projects and services.
Make “talent” the focus of the next-generation program. The CWM programs of old
were typically focused on cost reductions or cost savings, without prioritizing the notion
of talent or effectiveness of temporary labor. Now, with the contingent workforce
umbrella encompassing the full spectrum of contract labor and bleeding into critical
corporate projects, talent management becomes a crucial component of the next-gen
CWM program. Organizations must develop deeper talent pools and effective means of
networking within those pools to effectively align talent with enterprise labor and project
needs.
Develop a 360-degree view of CWM data and the ability to analyze and use it. “Data”
doesn’t become “intelligence” until it’s truly actionable and can reinforce educated
decision-making. The CWM programs of the future will be concerned about the
ramifications of contract talent across the greater organization…making intelligence a
critical component of any program. Organizations must ensure that data can be utilized or
leveraged in greater corporate budgeting, forecasting or planning to help determine
future contract talent demand and align the proper resources to upcoming projects or
initiatives.
©2013 Ardent Partners Ltd.
www.ardentpartners.com
10. The Future of Contingent Workforce Management
ABOUT ARDENT PARTNERS
9
Ardent Partners is a Boston-based research and advisory firm focused on defining and advancing,
the accounts payable, procurement, and supply management strategies, processes, and
technologies that drive business value and accelerate organizational transformation within the
enterprise. Ardent also publishes the CPO Rising and Payables Place websites. Register for access
to Ardent Partners research at ardentpartners.com/newsletter-registration/.
ABOUT THE AUTHOR
Christopher J. Dwyer, Research Director and VP of Operations, Ardent Partners
Christopher J. Dwyer is considered a premier thought leader in the world
of supply management and a renowned expert in contingent workforce
management, travel and expense management, and meetings/events
management. He is the preeminent source of thought leadership in these
areas and evangelizes the evolution of complex spend management.
Over the last eight years, Christopher has written hundreds of research
reports and interviewed, advised, and benchmarked thousands of enduser professionals and executives in regards to their complex spend management operations.
Christopher joins Ardent from the Aberdeen Group, where he spent more than seven years
tracking the progression of complex category spend management strategies and solutions while
helping to educate the global market. At Aberdeen, Christopher led Aberdeen’s Global Supply
Management practice and oversaw and contributed to the company’s coverage of procurement,
strategic sourcing, spend analysis, ePayables (accounts payable automation) and supplier
management.
Christopher leads Ardent’s coverage of complex spend management, including the evolution of
contingent workforce management, T&E expense management, and all other complex categories
of spend and provides research and advice so that end-user organizations can enhance their
capabilities and competencies and make the smart decisions that will ultimately improve their
performance. He welcomes your comments at cdwyer@ardentpartners.com, on LinkedIn
(www.linkedin.com/in/christopherjdwyer), or Twitter (@cjd_ardent).
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no liability for errors, omissions, or inadequacies in the information contained herein or for interpretations thereof. The contents
expressed herein represent Ardent Partners’ best analysis at the time and are subject to change without notice.
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