This week, at our Asia Pacific Summit in Singapore, I interviewed a representative from Vodafone about its alternative sourcing strategy to fulfill a 90-day migration project. Where previously they may have hired time-and-material contingent workers, they considered alternatives via utilizing the decision tree concept and eventually engaged with a boutique provider that delivered against every milestone. As a result, the company minimized its risk and realized cost savings of 20% when compared with traditional contingent workers and 30% when compared with original equipment manufacturer costs.
The decision tree concept. Ask your organization a simple question: “If one of our hiring managers puts in a request to hire a contingent worker on a 90-day contract to fulfill a key business need, what process of approval do we follow?”
I would hazard a guess that, in most cases, the process would be something along the lines of this exchange:
Approver: “Can you not complete the work with your existing resources?”
Requestor: Thinks to themselves “what a stupid question, of course not … why would I have asked you if I could do that!” … but then responds “No, we are at maximum utilization and this is an essential need for the project.”
Approver: “Do we have the budget for this?”
Requestor: “Yes, I’ve checked that and we do.”
Approver: “OK … go get them.”
While we would all like to think it’s not quite that simple, the end result of many hiring decisions might be more drawn out, but the level of consideration and decision making is not that much better than the above example.
People tend to treat spending company money differently from their own, as I discussed in a September 2015. Not many of us would make a key purchasing decision such as what house, car, clothes or the next gadget to buy on price alone. Personal key purchases are generally made based on a subconscious belief that we get what we pay for. This isn’t always the case when spending company money.
In the same way, would you spend your own money on a six-month contingent worker without a much more robust decision process? Probably not.
So where does that all-important decision tree take place in your business, at what time and how thorough is the decision tree process? Is there even a process at all? If the answer to that question is yes, then is it a good decision tree and is it part of your culture to take it seriously?
A decision tree can be built into your VMS (if you have one) or you can simply create a method that drives the process of consideration before the request for final approval is made.
Here are some of the most common questions to consider building into your decision tree:
- Can the work be performed by an existing employee, either in the short or longer-term?
- Can the work be delayed until an identified employee or existing contingent worker becomes available?
- Could the work be outsourced and overseen by an external company?
- Can the work be transferred/reassigned to a worker from elsewhere in the business on a short-term basis?
- Can the work be packaged into a statement-of-work deliverable so that bids can be invited?
- Does the work actually need to be done? Sometimes it is more important to decide what not to do with your available resources rather than what to do.
Staffing Industry Analysts, when referring to total talent acquisition, sights 10 resource channels, excluding internal reassignments, so the potential to approve an alternative fulfillment channel that delivers improved value is ever increasing. But are you aware of them? If not, then you need to be.
A decision tree needs to have structure, it needs to have a holistic visibility of the entire workforce within your organization and it needs to have the mandate to execute the most optimum resource channel to satisfy demand and to deliver against your operational and strategic objectives.
Like the basics of the golf swing, a decision tree needs to be revisited on a regular basis to ensure that, once you begin the search, select, engage and retain process, then at least you are starting with the best chances of success.
If your decision tree process was an indicator of your golf handicap, would your organization be down to single digits?