Businesses spent $4.4 trillion on contingent labor globally in 2020, roughly 61% of which was on independent contractor services and 9% on workers through staffing firms.
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The gross margin of majority of the 16 publicly traded staffing firms tracked by SIA appears relatively strong in the third quarter. Gross margin can be a barometer of a firm’s financial health and help predict future bill rates.
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Recruitment process outsourcing providers employ a variety of pricing models for their services, according to the “RPO Global Landscape Summary 2021” report from SIA. The most common was a combination of cost per hire and fixed monthly fee.
A median 20% of buyers’ contingent workforce spend will be going through direct-sourcing channels in 10 years, according to SIA research, up from a median 1% today.
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The use of freelance platforms by staffing firms’ temps dropped in 2020, with the majority of survey respondents not knowing about or not using business-related platforms.
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Despite being a focus area for vendor management system providers as well as CW programs, SOW represents just 16% of reported 2019 VMS spend under management, suggesting that it remains a largely unpenetrated market for VMS.
Recruitment process outsourcing is used most heavily for professional roles; however, providers meet needs ranging from apprenticeships to executive search.
VMS pricing modelsWhile contingent workforce programs’ appetite is increasing for alternative VMS pricing models, fee as a percentage of spend remains dominant.