From the “Wild West” days of staffing in the ’90s to the well-oiled MSP machines of today, contingent workforce program management has undergone a remarkable evolution. Today, programs continue to expand their depth and reach in how contingent workers are procured and managed. And enterprise organizations have benefited immensely from the control and centralization CW programs provide — from cost savings and increased efficiencies to reduced risk.
The ability to capture these benefits can be credited to mandatory program requirements such as supplier discounts and rebates, no-manager contact policies and vendor neutrality. As the potential return on investment of the contingent workforce remains attractive for many organizational stakeholders, pressure increases on program leaders to continue to reduce costs, save time and meet workforce goals. In doing so, it can be tempting to double down on the policies that have historically delivered those benefits. However, the approaches that served your program well previously can be detrimental to your program’s long-term goals and strategy.
The following CW requirements are two of many that programs have embraced as “industry standard” — but here’s why they might not serve your program as well now.
Multiple supplier rebates and discounts. Supplier rebates and discounts are the funding model for many CW programs; some even generate revenue. It’s tempting to respond to increasing cost-saving targets by applying additional traditional rebates or discounts to suppliers, squeezing from multiple sides.
While easy to mandate with some short-term gain, this will ultimately leave you with a program of sub-par suppliers. Suppliers focus their A teams on CW programs that are truly vested in the mutual benefit of both parties. They are going to save their top talent, time and innovative ideas for their preferred suppliers. Over time, this can have a real impact on your program’s competitiveness in the market space. A different approach may be to look at core cost-saving levers and apply only two to four that will drive the most value. Then, shift your focus on how to creatively partner with an optimized supplier base to generate mutual beneficial cost-saving initiatives surrounding redeployment, attrition, reduced rates for exclusivity, supplier talent pools and so on.
No-supplier/manager contact ROE. Vendor-neutral and “no-contact” policies have positioned CW programs as the gatekeepers between managers, suppliers and talent. When CW programs first formed, these types of policies were foundational to bringing structure, control and boundaries to a rogue industry.
As the industry and your program mature, these once-critical policies may now be a barrier to your ability to deliver a best-in-class experience and results. It also puts a heavy weight on CW programs to deliver and decipher feedback that, for many programs, is an inconsistent and complicated telephone game. If you are open to exploring beyond the strict and industry-touted benefits of no-contact policies, you may find there is even great value in opening the lines of communication. I am not suggesting we go back to the old days where suppliers roamed the halls and made placements over dinner. However, I do believe that for programs with trusted and optimized supplier partners, managed contact with clear guidelines and boundaries can provide immense value to a CW program and its stakeholders.
These requirements undoubtedly stemmed out of necessity. But for mature programs looking to differentiate themselves in the industry and create a new standard, there’s a unique opportunity to revisit such cookie-cutter requirements. Indeed, certain policies are critical to programs in their infancy, but they may no longer be beneficial once the program has surpassed a certain maturity level. In fact, they may prevent programs from being able to achieve the next phase of growth. Revisiting your policies as your program grows can be exciting, and, if crafted correctly, new policies can help your program set the next industry standard of CW program quality and experience.