Gone are the days when the contingent workforce program office needed only to be concerned with vendor lists. The VMS brought a way to distribute job requisitions to staffing firms while at the same time being the system of record to track staffing firms and ultimately pay them with a single invoice. Fast-forward to 2022. Today, the sourcing process is much more complicated than a list of preferred vendors. There are decisions to be made on what kind of worker should fulfill the engagement and whether the worker needs to be on-site or can work remotely.
Now, there are platforms that source remote workers, fractional workers, independent contractors and workers from staffing agencies as well as your own talent pools of curated talent available to meet your needs. Most of what is driving mergers and acquisitions — consolidation — in the market today is in the spirit of simplifying the talent acquisition process for the program office and the end user of the services.
Let’s examine what led to this continuing wave of M&As in our ecosystem and what it means for the contingent workforce professional.
Triggered by the Pandemic
2020 will always be associated with the pandemic and how much the world changed and adapted. In the workforce solutions industry, the changes also fueled what happened in 2021: a chain of acquisitions and consolidations at a rate that does not seem to be slowing in 2022. As the trend continues, we take a look at the kind of impact we might expect on the industry and the businesses.
Different From the Dot-com Era
For those that remember when the dot-com era burst onto the scene and such companies were popping up like weeds, consolidations quickly followed in 2008 and 2009, and unfortunately many businesses closed their doors. Today feels similar, with more companies entering the playing field than you have time to examine. But instead of teetering on what was a fragile business economy with heavy investments and not enough revenue to support them, the businesses popping up today in the workforce solutions ecosystem bring great efficiencies to the way companies will acquire and retain talent.
In the last year, a large percentage of the acquisitions happened in the healthcare and IT staffing sectors as firms sought geographic reach, expertise in additional skill sets, and recruiting power. This all makes sense when you consider how the pandemic’s fallout brought tremendous demand for healthcare staff and IT security and infrastructure.
Getting Close to the Talent
The acquisitions gaining popularity in the technology areas that support talent acquisition and the candidate experience seem to be the result of additional fallout from the pandemic. Different ways of working shined a bright light on how people want to work and the projects they want to work on. Candidate engagement has become more important than ever during these times of talent scarcity. As a result, the MSPs have needed to find ways to get closer to the talent in their part of the process, and we are seeing many of them buying tech companies that enable processes and create efficiencies. Meanwhile, VMS providers have been doing the same and acquiring tech companies to enhance their software-as-a-service offerings and bring, for example, artificial intelligence and machine learning technologies into the program offices of their clients.
All of these developments are in the spirit of acquiring and retaining talent to get the work done. Due to the pandemic, the world of work has undergone a dramatic change. And much of getting work done today focuses on how workers feel while doing the job. Remote work has allowed people to work where they want. Companies who want to secure the right talent for the job are working with candidate preferences and doing what it takes to keep them engaged wherever they are.
Sourcing Has Evolved — Take Advantage
As the enterprise buyer of contingent labor and services, you must either buy all of the tools and technology to manage this very complicated process to acquire talent or have your software and service providers do it for you. Just like when the VMS came in and you no longer had to manage a list of preferred vendors and their multiple contracts, the VMS and the MSP companies are acquiring the technology and service providers — either through acquisitions or partnerships — to evolve the sourcing process as the industry develops. Managing relationships with multiple providers is time consuming and inefficient. Let your expert service providers stay on top of the latest tech to keep you ahead of the talent-sourcing game so you can focus on keeping your business partners happy and filling their requirements.