There’s more to short-term contracts than covering someone’s maternity leave: there are very good reasons to employ contingent labour – for you and the contractor alike! Sam White from Argentus unpacks the strategies behind Contingent Staffing.
Economists have done a lot of analysis on the rise of the so-called “gig economy.” More workers are using short-term contracts and other forms of employment to provide additional income to supplement or replace permanent jobs – think Uber, DoorDash, etc.
But more and more companies in a variety of industries are also bringing on high-skilled contingent labour for white collar positions in a number of impactful business functions like Technology, Procurement and Supply Chain.
These roles typically have similar compensation to permanent employment, with the exception that they’re on a fixed term (typically three, six, twelve, or eighteen months). Working more independently and “hitting the ground running” faster than perm employees, these workers work in consultative fashion to expand Supply Chain and Procurement capability for their clients, and then move on to the next contract.
For many of the top performers, contract work is no longer a stop-gap to permanent employment – it’s an opportunity to work in a variety of industries and projects, and broaden their experience.
So what situations are these companies using contingent staff for?
There are a variety of business cases that corporate leaders are making for contingent staffing, recognising it as a strategic and cost-effective tool in their hiring arsenal.
We put together this infographic to show some of these use cases. It places a special focus on our recruitment specialities of Procurement and Supply Chain, where our clients have increasing needs.
We start from the less strategic, more common reasons for hiring contingent staff, and move into the strategies that the most innovative business leaders around are adopting today.
This article has been republished here with kind permission from Sam White at Argentus. What’s been your experience with contracting and the gig economy, as a worker or in hiring staff? Let us know in the comments below.
As the workforce bounces back, the gig economy is expected to boom. So how will this mode of employment suit Procurement? We asked Prometheia Procurement CEO Jody Rowe.
COVID-19 has raised many challenging questions about the way in which we work. It’s causing individuals and companies the world over to review their operating models. The procurement profession is not isolated from this and will need to think about the security of supply chains, how we work, who to work with, what an effective operating model is, what systems to use, the questions are endless…
This changing environment is driving the need for procurement solutions to be flexible and virtual, and toprovide simple access. We need processes and tools which empower all users and ensures continuity of knowledge, especially for the gig economy which requires access at any place, at any time.
We are also under a lot of pressure to make smarter decisions that mitigate risk, leveraging the best consulting knowledge in the business, while still ensuring retention of key personnel.
It’s becoming obvious that we now need to embrace open systems thatprovide instantaneous connection that enables group collaboration and creates a valued global network and access to knowledge.
The drivers of these changes are simple – it’s down to cost and managing risk. The question is how to get things done whilst keeping overheads down and providing real value? The opportunities of enjoying full-time work at one company for the entirety of your career has greatly reduced. Some industries, such as Oil and Gas, are already acutely aware of the steady shift towards the gig economy, which has been driven by both companies’ and individuals’ needs as people seek improved work-life balance.
Do companies need to maintain a large physical footprint or would they be better reducing their liabilities by gaining access to a diverse, flexible and talented workforce when required? As a result of the COVID-19 pandemic, companies have downsized and placed recruitment freezes, yet have still managed to operate effectively. To me, this demonstrates an underutilisation of resource pre-pandemic.
When the rebound from COVID-19 comes, companies will move even more towards the gig economy to meet their needs for short-term contracts and freelance work. With commodity price fluctuations and layoffs continuing, it is likely we will see this kind of marketplace continuing to grow for the foreseeable future.
In a gig economy, employers have access to a flexible workforce with the appropriate talent available at short notice. There’s no upskilling required as contractors are typically experienced specialists in their field, which can result in projects being completed more efficiently. Contractors often enjoy much greater flexibility in terms of work location, schedule and leave, as well as the excitement and experience obtained moving from one project to another; all of which ultimately adds to their valuable skillset.
Digitisation is paramount for a gig economy to be effective; reliable global access to systems exists and is well-tested. Access to global resources can be sought easily and work can be undertaken anywhere in the world. There are multiple workforce gig economy websites that successfully provide ad-hoc services: you can send a scope, obtain a price and get the work completed.
So why not access procurement in this way?
When you reflect on the way in which we are working in multiple countries – UK consultants working with an Australian client, Australian consultant working with an Indonesian client – you can conclude this new smarter way of working is upon us. Adapting to this change would be pivotal in continuing to deliver value within the Contracts and Procurement function. There’s no denying the function is critical to any business in managing risk, providing strong governance and soundly managing spend.
The answer was to develop a digital platform which provides access to talent across the globe via a flexible and virtual model which provides a cost-effective opportunity to fast track performance, access to procurement professionals that can save time and money, and assistance in managing risk and spend by offering easy-to-use services that can be accessed from anywhere.
And so was born Promitheia Procurement: A comprehensive online procurement tool that provides business with the opportunity to purchase procurement templates and work with online professionals to design any business procurement function to meet their unique requirements.
The ‘gig economy’ is just a hipster way of describing people who contract their labour rather than being full time employees. But is it changing the workplace?
We are constantly told that the ‘gig economy’ is about to destroy the workplace as we know it. We apparently have entered a brave new future where workers are no longer tethered to a business and lack the protections of employment laws written in a bygone and largely irrelevant era. But the evidence tells a very different story.
The ‘gig economy’ is just a hipster way of describing people
who contract their labour rather than being full time employees. In that sense, gig workers have always been
part of our economy. Most tradespeople,
for example, run their own businesses and contract their labour to multiple
employers, often simultaneously.
Recently however, contracting or ‘gig working’ has bled more
and more into jobs previously occupied by full-time employees. Taxi drivers are the most obvious modern
example. Formerly a driver worked for a
company who owned and serviced the car.
The driver worked for a wage or for a percentage of the fares collected. With the advent of Uber, the car is owned and
serviced by the gig worker and they get to keep a much bigger (in theory)
proportion of the fares earned. And it doesn’t stop there. Gig workers are doing a similar thing when
they turn their home into a hotel and themselves into hoteliers using AirBnB.
But for all the headline-grabbing hoo-ha about Uber, AirBnB and Lyft etc., gig workers using electronic platforms still only account for about 1 percent of the workforce. If we include contractors, temps and on-call workers of any description in the definition, about 10 per cent of the US workforce is part of the ‘gig economy’. And that percentage has not moved at all since 2005. The overwhelming majority (90 per cent) of workers had full-time jobs in 2005 and they still do.
The introduction of electronic platforms like Uber, Lyft and
AirBnB may not have changed the overall numbers but it has changed one very
important aspect of contracted labour, the age of the person doing the
work. Between 2005 and 2017 the
percentage of ‘gig workers’ aged 35-44 dropped from a quarter to a fifth. Meanwhile the percentage aged 55-64 increased
by 25% and the numbers aged over 65 almost doubled. Today’s ‘gig workers’ are increasingly older
workers who in earlier times might have been receiving a government pension or
living out their golden years on their savings. The reality couldn’t be further
from the youth culture branding of the digital platforms.
Gig platforms may be growing but they are largely not
replacing more standard work patterns. The JP Morgan Chase Institute (JPMCI)
to the bank accounts of workers in the ‘gig economy’ (via the platforms that
arrange the work). Their data shows
that, for most of those workers, gigs are sporadic and are usually a second job
done in a household where another member has a fulltime job.
And far from suffering lesser conditions, data from the US
Labour survey shows that the group of gig workers growing fastest (those over
50) had the highest weekly earnings and greatest level of health insurance and
retirement coverage of any age group. All
of those measure increased significantly between 2005 and 2017.
The same survey did however identify a different and more
concerning trend for younger workers when compared to its 1995 results. There is an undeniable decline in work
conditions for workers in general. There
is less job security, fewer opportunities for promotion and the increasing
probability that their job will be outsourced to a company paying lower wages
and offering less benefits. This is
increasingly being driven by the deliberate creation of ‘contracting’ roles
which in reality are being performed by people who on any reasonable measure
are full-time employees. The contractor
status gives the employer much more flexibility but destroys job security for
There is a lot of spin associated with the story of the gig
economy and it is probably driven by tech companies which have a lot to gain by
us believing they are much more important than they are. The reality is that gig work is not
increasing. All that is changing is the
method of arranging it and the age of the people doing it.
But all the noise about the gig economy hides a more important story. Full-time job security is declining and with it, people’s overall earning capacity and sense of worth and well-being. We need to care less about the marketing spin emanating from the ‘gig economy’ and more about the very real declines in job security.
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Contingent Labour represents an ever-increasing proportion of our workforce, and it’s not hard to understand why. What is challenging for procurement teams, however, is effective management of their organisation’s contingent workforce…
“Depending on whose data you believe, the contingent workforce now makes up from 20 per cent  to 40 per cent  of the global workforce, with some analysts estimating that it will reach 50 per cent by the year 2020,” says Doug Leeby, CEO – Beeline.
Procurious caught up with Doug ahead of his keynote presentation at Big Ideas Summit Chicago to learn more about the state of contingent labour in the workplace today and to pick his brains on how procurement teams can best manage, and leverage, their ever-evolving workforce.
The rise of the contingent workforce
“It’s easy to understand why contingent labour is growing,” explains Doug. “Most companies are under intense pressure to improve their bottom line and usage of contingent staff, contractors, freelancers, and consultants is an excellent economic model that can be deployed to both accomplish discrete projects and assist an organisation during surge periods of work.”
“There is an enormous economic benefit in being able to ramp up key areas of the workforce during heavy times and down in lighter times. Additionally, the enterprise can complete important project work by hiring external experts rather than having to bring highly specialised skills into the organisation. The short-term costs may appear high but the total cost to production can, in fact, be much lower.”
“Traditionally, companies have looked to the contingent labor population for work that is less strategic, saving that for FTEs. However, more and more, we are seeing a hybrid approach. Successful companies in which HR and Procurement are working together have figured this out. Most of us can’t afford a team of data scientists but we can contract a team for a specific goal. That’s a very strategic example whereas the contingent workforce can produce extraordinary value.”
The challenges of contingent labour
Employing a large proportion of contingent labour to your organisations presents a whole new set of challenges for both procurement teams and HR. But, as Doug advises, it is specifically in-effective management of contingent talent that will lead to enormous problems and risks for your organisation.
“Companies may be operating out of compliance, exposing themselves to severe penalties. Additionally, improperly managing this talent can lead to overpayment or under-delivery of results. Metrics and KPIs are critical to ensure that the program is properly managed. Everyone has heard about the now-infamous ‘war on talent.’ It isn’t subsiding. Not having a smooth-running program to manage contingent labor invariably leads to losing great talent to those who do have solid programs.”
Part of the difficulty with managing contingent labour is procurement’s failure to work constructively and efficiently alongside HR departments.
“Asking the two departments to take time to think about optimising their workforce is a tough ask,” explains Doug.
“This is not a small undertaking nor is it something that can be accomplished in one meeting, or even a series of meetings. It is transformational, which means it requires a significant investment of time and resources, but I believe it will happen as the focus on talent comes into greater view at the C-suite. HR has an outstanding opportunity to look at talent holistically and work with Procurement to ensure that it is sourced and managed properly. This will deliver tremendous value to the organisation.”
Using tech to manage contingent labour
“Technology today is an enabler,” Doug explains. “However, with the progress being made in AI and machine learning, it will soon become far more than just an enabler – it will become an advisor.
“Technology shouldn’t just be about workflow and reporting. Rather, it should act more as a subject matter expert or concierge helping procurement and HR to analyse their workforce and make strategic decisions.
“The challenge with this transformation is that it depends on organisations getting all their data into the technology and most still have a way to go. At a minimum, they need get all of the contingent labor into the system – complex, statement-of-work (SOW) based, milestone-based services as well as contingent staff.
“VMS technology can manage not only who the contingent workers are, where they are, what they are doing, and what facilities and data they have access to, but also how well they perform their assignments.”
The future of the workforce
“The workplace and workforce model that has been in place since the Industrial Revolution, designed for stable markets and long-term business planning, is giving way to a new model based on constant change and adaptability,” Doug believes. We asked Doug to outline what he believes will be the key features of the workforce of the future…
1. Talent first
Over time, I believe organisations will adopt a “Talent First” approach that will be led by HR. Procurement will remain a solid partner, but HR will need to lead the initiative within the organisation. They will work, proactively, with department heads and finance to figure out the best way to achieve desired outcomes.
2. The human touch
Some outcomes will be handled via artificial intelligence and robotic process automation, but much will still depend on people. Competitive organisations will focus on optimising their workforce. They will then focus on how to source this talent holistically.
3. Talent pools
Talent sourcing won’t be done in silos anymore. Organizations will establish private talent pools and work to attract talent, both FTE and non-FTE, to their pools. Then, they will be able to hire/engage known talent which leads to a higher propensity for success.
Companies will make use of functionality like our Self-Sourcing. In other words, they will go directly to the contingent talent rather than through intermediaries. This is already being done with freelancers, but we will see more of this with contractors and consultants.
Ah, the joys of parenting! If you’ve got children, you’ll know that it’s pretty damn difficult, and costly, to return to the workplace post-parental leave – as if you needed that extra stress! What should your organisation be doing to ease your transition?
You’re coming to the end of nine months (give or take) parental leave and my guess is that you’ve never felt less “in the zone”. You’re sleeping an average of four hours a night, haven’t had a shower in three days, can’t remember the last time you had a conversation about something other than nappies, Peppa Pig or puréed carrots and you’ve got 2157 emails, and counting, in your inbox.
Returning to work after having children is tough for numerous reasons; leaving your child(ren) in someone else’s care (and paying a hefty fee for the privilege), negotiating flexible working conditions, re-adapting to work and taking a sizeable pay cut to name but a few.
The true cost of maternity leave
It won’t come as a surprise that women are the most economically punished in this scenario.
A recentUK study by PwC, entitled “The £1 billion career break penalty for professional women” revealed that women returning to the workplace post-parental leave are losing out on an average of £4000 anually.
Numerous reports have considered the hours worked (around 100 p/w) by stay-at-home mums and calculated their deserved salaries (in excess of £100,000) but we aren’t living in a dream world. Most women, in some capacity, have to return to the real world and they sure as heck aren’t earning what they deserve or filling the roles that reflect their experience and skillset. Indeed, PwC’s report suggest that two-thirds of women are working below their potential when they return to work and one in five are moving into lower-paid roles.
The stigma associated with CV gaps and a lack of workplace flexibility in many organisations are both contributing factors to these concerning statistics, but there is some hope! By fully utilising the female-returner workforce, the UK could add £1.7 billion to its economy. And a number of organisations are recognising this and taking promising steps to implement programmes that make the transition back to work seamless and accommodating for working parents.
Here are a few examples:
1. Offer mid-career returnships
Think you might be too old for an internship? What about a returnship? Returnships, open to men and women, are a growing trend in UK businesses, aimed at helping those who have taken extended career breaks by updating skills and easing people’s fear about big CV gaps and a lacking or out of date skillset.
Women Returners explain that “Returnships are higher-level internships which act as a bridge back to senior roles for experienced professionals who have taken an extended career break. They are professionally-paid short-term employment contracts, typically of 3-6 months, with a strong possibility of an ongoing role at the end of the programme.”
And the benefits are two-fold with the employer benefitting as much as the employee. They gain access to a high calibre diverse talent pool and are given a low risk opportunity to assess a potential employee’s suitability for a permanent role.
Companies in the UK who currently offer returnship programmes include PwC, Deloitte, 02, Mastercard and Virgin Money. You can take a look at the full list of companies offering returnships and what these programmes entail here.
2. Let the dads parent too!
The easiest way to prevent parental leave destroying careers for women is to level the playing field for all genders.
The concept of paternity leave is still a fairly new one. Sweden became the first country in the world to introduce paid parental leave just forty years ago and, whilst more than half of EU countries have followed suit since then, the uptake is still low. Men are reluctant to take their full entitlement of paid leave because of the cultural stigma attached. Most companies and countries offer far less leave for men than women and it sends a message: “Men don’t really need parental leave.” Fear of judgement, lost career opportunities and lack of role models all contribute to the lack of uptake.
When men and women are offered, and start claiming, paid parental leave in equal measure, it becomes everyone’s problem to find better ways of accommodating this leave within businesses- and that’s when change happens!
Some of the trailblazing companies include Netfix, whose parental leave policy allows parents up to a year of flexible paid leave, Amazon, who launched “Leave Share,” allowing Amazon employees to share their paid leave with their partners and Spotify, who offer six month full pay to all parents.
3. Build a creche
Flexible working is crucial for parents upon their return from a career break. Employees who are offered flexible work options such as being able to work from home, and at hours that suit them could be the difference between a parent returning to a senior role and having to take a more junior position, for which they are overqualified. What does it matter if one of your top employees leaves at 3pm each day to collect their children if they’re willing to work late into the evening to get the job done?
We talk a lot on Procurious about better assimilating family life with the workplace and whether it’s becoming more acceptable to bring your children to work. A number of companies are better providing for their employee parents with on-site childcare facilities. Goldman Sachs, for example, opened London’s first on-site creche in 2003. It currently offers staff four weeks free care to ease the transition back to work from parental leave.
In the U.S. a third of Fortune’s top 100 companies to work for provide on-site child care.
Going on vacation this summer? Print this out and take it someplace without any Wi-Fi….
Our webinar, Out of Office: Your Career Break (Through), takes place at 1pm on 10th August 2017. Register your attendence for FREE here.
You packed your favorite journal and a couple of pens. You planned some time on the beach, or left an afternoon empty to find a table at an outdoor cafe where you can grab an ice-cold drink and just think. This vacation, you’ve told yourself, you’re finally going to be able to take a break and get some clarity.
But clarity about what, exactly?
It’s true that vacationing can hold some unexpected career benefits, in addition to letting you recharge your batteries and do some self-reflection about your working life, your personal life, and your overall goals. But musing on these big-ticket themes isn’t something many of us have a lot of practice doing. When you finally get a chance to do it, you might find your thoughts a little unfocused. That’s fine—mind-wandering is sort of the point here. But in case you need a little more structure, these are four questions to let your mind wander over.
1. Stresses and worries aside, am I happy at work?
One question worth asking is whether you’re happy with your job on a day-to-day or week-by-week basis. You may find some workdays pretty stressful, and that’s normal, but do you generally find your job fulfilling to do?
Vacation is a great time to really step back and consider that, because it’s one of those rare occasions when you can step back to monitor your own reaction to being away from work. A change of pace is always nice, but at the end of your vacation, are you excited to get back to the projects you’ve been working on? If you totally dread the end of vacation, it might be time to start looking for something else.
When you’re away from the office, you can also think about which aspects of your job are most rewarding. By identifying the tasks that excite you, you can lay the groundwork to pursue opportunities that let you do them more often.
2. Where am I headed?
One of the most aggravating questions hiring managers like to ask on job interviews is, “Where do you see yourself in five years?” Lots of people find that hard to answer, in part because a lot of the time they don’t honestly know.
That’s understandable. It can also be difficult to do long-range planning when you’re buried in the daily grind, when your goals are changing, when your industry is evolving at a breakneck pace, or all of the above. Taking some time off lets you think about whether your career is headed in a direction you’re generally happy with. To get a handle on a big-ticket question like this, try to think specifically about the skills you feel you still need to acquire to succeed.
In other words, you may not be able to see the future, but you can still think like a futurist when it comes to your own career planning. Are there people who might be good mentors (including of the unofficial kind) to help you fill in those skill gaps? Maybe it’s time for some more education. Going back to school for another degree may be daunting, but you can always start by taking a couple of professional development courses. Or maybe you just need to do a little more networking to brush up on the latest goings-on in your field.
Many companies have some form of educational benefits that lots of employees don’t know much about, let alone actually use. Maybe this vacation is the time to figure out which opportunities you can ask your HR team about once you’re back in the office. In fact, even companies that don’t offer a standing set of training resources may be willing to cover some of the cost of professional development you pursue on your own.
This is one of those items that way too few employees actually negotiate for, beyond compensation. Use a few spare hours this vacation to come up with some training options you’d like your company to help you go after.
3. Who don’t I know
You have more colleagues than just the ones who work for the same company as you. There’s a whole community out there of professionals who do much the same kind of work, but most of us don’t spend enough time getting to know them. After all, networking is a tedious chore and often completely fruitless.
And sure, sometimes that’s true. But there are a few things you can do to expand your connections in ways that don’t feel like networking. One of them is pretty old-school: Join a professional society. They’re often a great source for the latest developments in your field, sparing you the need to scroll LinkedIn for industry news. And they often have local meetings where you can meet people dealing with the same issues you are, rather than blindly scouring a random mixer for them.
There are also “networking” opportunities that might be lurking in your average workday—chances to connect with valuable people you haven’t had a chance (or a non-awkward pretext) for to strike up a conversation with yet.
You’re on vacation, though, so all this will have to wait, right? Technically, yes. But one of the reasons so many people procrastinate on (or just downright avoid) networking is because they haven’t given much thought to who’s missing from their contact lists, let alone what the best strategy might be for filling those gaps. Your vacation is a great chance to consider that. Based on where you are in your career and where you’d like to be before long (see above), think about the ideal connections you’ll need to make. Here’s a handy guide for figuring out who’s most important to you at the moment and where can you find them.
4. What’s Missing?
Work is great, but there’s more to life than the things you do to make your company money. In high school and college, you might’ve spent a lot more time doing things you were passionate about—or things that helped you discover what you’re passionate about. After hitting the workforce, most of us start to shed extracurriculars. If you look back, you may see a graveyard of discarded instruments, sports, clubs, and volunteer work stretching out in your wake.
It’s great to draw a sense of purpose and fulfillment from your full-time job, but those outside activities can also be powerful sources of energy. What’s more, they can be the steam valves that give you much-needed emotional release when the pressure at work builds up. Vacation is a good time to re-engage with old hobbies and pursuits you’ve left behind. Pull that old French horn out of the closet. Brush off your tennis racquet. Find a local dog shelter that needs another pair of hands. (Puppies are always a great cure for whatever ails you.)
Don’t feel guilty about carving out a little more time away from your work to pick up these side gigs and activities. Not only will they give you a chance to develop your other interests, they’ll also give you people to hang out with who aren’t all focused on the same set of work issues that you are.
And hey, you never know; over winter vacation about 16 years ago, I started taking saxophone lessons. Not only has it been great fun, I’m now in a band!
This article, written by Art Markman was originally published on Fast Company.
Art Markman, PhD is a professor of Psychology and Marketing at the University of Texas at Austin and Founding Director of the Program in the Human Dimensions of Organisations. Art is the author of Smart Thinking and Habits of Leadership, Smart Change, and most recently, Brain Briefs, co-authored with his “Two Guys on Your Head”co-host Bob Duke, which focuses on how you can use the science of motivation to change your behavior at work and at home.
By 2020 43 per cent of workers are expected to be freelancers, embracing the gig economy – How can you be sure to make it work for you?
There is a lot of upside to being your own boss, and more and more people are finding this out by taking the plunge. Today 34 per cent of workers in the U.S. are freelancers, and this figure is projected to reach 43 per cent by 2020.
What’s making this lifestyle so attractive? When you are your own boss you can choose which projects to work on and reject any projects you don’t want to do. You can choose what hours to work, where to work, and how to work. You can even take your work with you to the beach and enjoy a vacation without getting too far behind.
But there are some drawbacks- you are responsible for getting clients, paying taxes, and health insurance and retirement. In order to keep ahead:
Market yourself like a company
Keep your portfolio up to date
Maintain your website and social media presence
Network with previous clients so you can get repeat business and referrals.
Brian Wallace,Infogrpahic Expert, is the founder of NowSourcing, the U.S.’s premier infographic design agency. This infographic was originally published on JobVine and LinkedIn
Demand for workers is accelerating so fast that it’s outstripping supply. How can organisations find the employees they need without racking up a whole load of extra cost? Jon Milton explains the elephant in the recruitment room.
A cursory look at REC jobs market figures show that turnover in the recruitment industry for 2014/2015 was £31.5bn, the highest since records began in 2001/2002.
Permanent recruitment revenues have increased by 58.4 per cent from the recessionary lows of 2010/2011. Temporary or contract revenues are up by 60.1 per cent over the same period. Unemployment is exceptionally low.
What this means is;
Demand for workers is accelerating
Organisations are turning to recruitment agencies to help them meet it
The pool from which to draw workers from is receding
Any situation where demand outstrips supply should result in higher costs. These costs may be reflected in margin, pay rate, expenses or even resource commitment as your organisation searches to find the right worker fit. We have, however, gotten used to paying workers at a certain level and it’s possible to secure low margins from agencies.
How do you deal with this challenge without racking up a whole load of extra cost? Not as you perhaps think – and it’s probably worth addressing that particular elephant in the room first.
The Urban Myth: Exchanging volume with a single agency supplier will solve all my problems.
There are c24000 recruitment agencies operating in the UK, employing about 102,000 recruitment consultants. It’s a massively fragmented supply market that has never responded well when customers with diverse needs have attempted to exchange volume with a single supplier.
In the managed service world, some providers have responded to the challenge of keeping margins low with brute force, transferring workers supplied by incumbent agencies to their own books at implementation, and attempting to fill every requirement that comes along. In the long term this approach inevitably drives off contract buying and significantly reduces quality. This will obviously impact organisational output and competitiveness.
Keeping rates sustainable – making it worthwhile for the agency
The rate paid to an agency is sustainable if it covers their cost of sale and generates a reasonable profit. Cost of sale is important here; agencies typically pay their temporary workers at the end of the previous week worked and get paid by the customer in arrears. As such, prompt and efficient payment is crucial; agencies only get paid once they have filled a role successfully. Providing a decent level of opportunity on a level playing field is extremely important; and they are a vital component in delivering the temporary workforce so it is important to allow them to be heard (and not just through email) and responded to.
In terms of return, it’s important to pitch rates at the right level. Instinctively you may distrust agencies if you have stung by high spot fees in the past, but there are boundaries beyond which margins simply don’t work and render the fee payable non-profitable. Clearly it’s important to push these boundaries where the market dictates, but you will need to develop a strong understanding of the market to do so.
In our own managed service model suppler relationship management is a key component of our service and one that has helped us to address these issues. If you’re considering the managed service route, do talk to your agencies and ask them to give their views on different managed service providers – it will be an interesting conversation and one that should form part of your market approach.
Keeping rates sustainable – making it worthwhile for the worker
Whilst demand for skilled workers is currently outstripping supply it’s easy to think that the amount that you pay for those workers will have to go up, but this is not necessarily the case. Whilst pay rate is of course important, a workers decision on where to work is also led by a number of other factors. The includes the work itself, length of assignment, departmental profile and culture, amenities and work-life balance.
Keeping rates sustainable – managing expectations
Over the last 24 months we have been regularly canvassing the views of our agency suppliers to understand market dynamics, and one consistent theme has been of expectations. In an uncertain economic market where there is an abundant supply of skilled workers, the chances of recruiting someone who meets all your criteria are relatively high, so conversely with the market going full circle, expecting the same now can lead to disappointment.
The best way to address this is to allow agencies to manage the expectations of your line managers for you. This will help your managers to focus on their required outcomes rather than their perception of what they need. It will enable them to benefit from the recruiters’ knowledge of the market and what skills are available.
Whether you allow a managed service provider to manage this on your behalf or not, what is of paramount importance is that these relationships are strictly governed.
Futurist Anders Sorman-Nilsson warns that unless we act now, there’s a good chance we’ll find ourselves unemployed by 2030.
Sorman-Nilsson spoke with Philip Ideson as part of Procurious’ Even Bigger Ideas, a 5-part podcast series sponsored by State of Flux. You can access the series exclusively on Procurious.
Futurist Anders Sorman-Nilsson wants procurement professionals to ask themselves two crucial questions.
Firstly, think about your future career, your employability, or your entrepreneurial plans for the future. Given the kind of work you’re doing today, can a computer, an algorithm or artificial intelligence do it faster, cheaper, and more efficiently in the future?
Imagine jumping into a time machine and travelling to 2030. You step out of the machine, expecting to find yourself further up the career ladder, successful and wealthy. Instead, you discover yourself lying on the couch, watching daytime television, and no longer employable. What happened?
Roll up your sleeves and conduct a pre-mortem
Business are familiar with conducting post-mortems, particularly after a project or initiative has failed. Sorman-Nilsson advocates for “pre-mortems” instead: “Imagine that in 2030, your personal employment brand is now defunct. You’re no longer employable. What were the trends that you missed? What were the signals you chose to ignore? And what were the education investment decisions that you chose to delay that led to your personal brand’s demise?”
“Finally, ask yourself what change will you make today to prevent that outcome from happening?”
Job-stealing robots are already here
The AI disruption is happening already. Self-driving cars are a reality, machines have automated a lot of blue-collar work and AI is already impacting white-collar work. “In Japan recently, 34 humans in complex insurance claims processing were made redundant in favour of an insurance firms’ investment in IBM Watson to do those claims instead. We’re really just scratching the surface of what’s possible with artificial intelligence and computing power.”
Four actions to take today to save your career in the future
Examine your skill set and focus on where you, as a human being, might still have some kind of competitive advantage over a robot. Where can your emotional intelligence (EI) compete with, or complement, artificial intelligence (AI)? In a world where everything that can be digitised eventually will become digitised, what are the fundamental human skills that you add to a profession that’s largely about numbers?
Learn to speak digital: “You don’t need to speak Java or know the intimate details of cloud computing and data science, but you need to be comfortable in speaking digital. Digital really is the global language of business for the future.”
Embrace the gig economy: As corporates start opting for robots instead of humans, it’s time to take matters into your own hands and offer your personal brand through increasing entrepreneurship.
Invest in your education: “While we’re already experiencing fundamental shifts, we do have some time to prepare ourselves, but this means we need to really invest in our own learning, and our own agility in the way we position our skills. Aim to invest in at least one new skill every year.”
Anders Sorman-Nilsson is the founder of Thinque – a strategy think tank that helps executives and leaders convert these disruptive questions into proactive, future strategies. His latest book is titled Digilogue: How to win the digital minds and analogue hearts of tomorrow’s customer.
Kishwar Rahman shares her thoughts on the upcoming shift to a gig economy, the need for digital transformation, and the importance of networks for women in procurement.
Thriving in the gig economy
Rahman, a digital transformation lawyer, has recently completed a project as policy lead for the digital marketplace in the Australian Federal Government’s Digital Transformation Agency. She has now progressed to a lead role working for the National Disability Insurance Agency (NDIA) to assist in setting up an e-Marketplace for the organisation.
“I’m a classic example of the gig-economy professional”, says Rahman. “I’ve moved from project to project, offering my professional skills. Businesses are increasingly looking to hire the right people at the right time for project-based employment.”
According to Rahman, the whole notion of the permanent role is becoming less appropriate as businesses transition towards a consultancy model where experts move between businesses or different projects within a large organisation. “It’s very different to the concept of the ‘job for life’ that existed in our parents’ generation, and still an expectation of employment in the public service.”
So, what can organisations and individuals do to prepare for the gig economy? From the organisational side, it pays to be prepared for an upcoming transformation. A gig-economy office, for example, will look very different to workplaces of the past. They will be structured around a fluid and ever-changing group of professionals coming into the business, working with others on specific projects, then departing for different roles when they have completed their projects. One obvious symptom of this is the disappearing concept of the employees work station which is now being replaced by lockers for personal belongings and individual desks in quiet areas and larger tables for collaborative work.
Businesses also need to future-proof their customer-facing policies that currently favour clients with permanent roles. “Take banks, for example” says Rahman. “If you’ve ever applied for a home loan, you’ll know that they prefer to lend money to people with permanent roles. Unless they reassess their lending criteria, they’ll soon find that they won’t have enough clients as permanent roles become a thing of the past.”
Individuals, on the other hand, can prepare themselves for the gig economy by examining which of their skills could be put to use across multiple businesses, honing their expertise in those areas and becoming a member of a multi-disciplinary and multi-forming teams that move from one project to the next once they have achieved their outcomes and completed their deliverables.
Digital transformation – getting stakeholders on board
Rahman’s experience in driving digital transformation has led her to pick up essential change-management and implementation skills. “Getting people on board with a technological or process transformation is always one of the biggest challenges”, she says. “The most effective means of persuasion is to show them the efficiency in terms of speed and cost benefits. We live in a culture that expects extreme responsiveness and near-instant results, so simply highlighting speed gains will always be more effective than going into detail about improved workflows and processes.” Similarly, organisation want to find cost savings by digitising manual processes.
Another effective way to win stakeholders over to your transformation improvement is to find some common language on the benefits of the change. “Look for a benefit that everyone can relate to. A digital transformation, for example, will almost always lead to the automation of administrative tasks, which will free people up to do more creative and meaningful work. Reskilling and retraining will also be critical to this gig-economy. Education and training will also have to change in form and shape of delivery with consumers demanding the option to shape a course and its mode of delivery and study at their own time and pace to fit it around paid work and personal commitments”.
Networking with women in procurement
One of the reasons Rahman is attending Women in Procurement 2017 is out of curiosity. “Before last year I didn’t know there was a separate forum for women in the profession. I’m interested in seeing who’s going to be there, who’s participating, and who are the female leaders in the field. Additionally, the procurement profession, just when it has started to be recognised as a profession, is also being reshaped by the gig-economy. What will procurement look like in the future and what are the skill set that young women will need to participate in this profession in the future”.
The networking opportunity is also crucial. “Historically, women have had a lack of access to networks. Events like this can connect you with a pool of expertise – peers who you can ring up and share ideas with and problem solve.”