If expansion into a new country is on your program’s to-do list for next year, you are in good company.
Staffing Industry Analysts’ 2019 Workforce Solutions Buyer Survey for the Americas found 32% of respondents have global contingent workforce programs in place and 49% said they are likely to seriously explore such programs within two years. Only 21% are not planning to expand to a new country.
But expanding a contingent workforce program beyond its initial footprint is not a simple undertaking, as many program managers can attest. SIA’s “Best Practices in Global Sourcing,” report, released last month, stressed the need for effective communication with all key stakeholders as well as planning and change management activities with both colleagues and suppliers.
“It is a brave program leader who takes a ‘big-bang’ approach to a global expansion,” wrote Jo Matkin, SIA’s global workforce solutions research director and author of the report. “Establishing a phased, country-by-country approach may take a little longer, but it will help to identify and address unforeseen challenges on a smaller scale, and fine-tune the plan for subsequent phases.” Matkin also advises documenting changes to the plan as the program evolves to establish a “mature and proven methodology that can be revisited in the future as an organization’s global change management toolkit.”
It is important to have the right infrastructure and research in place for before beginning to engage vendor management systems, managed service providers or staffing suppliers to support the expansion.
Expanding an established program globally isn’t necessarily an objective in itself, but serves to increase an organization’s global net value from its CW program.
Considering the amount of change and support required to establish a consistent global CW program, it is critical that the organization and stakeholders understand the added value or return on investment of global expansion. “Only when this is firmly understood and agreed is a move to operational performance and accountability possible,” the report stated.
Cost savings as a result of reduced supplier prices is the most obvious benefit, but others may include visibility into contingent workers and suppliers; quality measurement of candidates and suppliers; efficiency in the process of sourcing and engaging contingent workers; and risk mitigation.
Planning practices for implementing a global oversight model should also include exploring the cross-country consistency of a global CW program and the organization’s readiness for global expansion. SIA’s report also advises that firms assemble a multinational governance board to establish global standards and identify unique requirements, as well as identify in-country subject matter experts to identify unique requirements and restrictions.
Do Your Research
It is important to be well-prepared prior to engaging prospective partners and suppliers. The SIA report suggests the following:
Accurate spend estimates. Sharing accurate spend estimates with suppliers allows them to provide competitive pricing that’s fair to both parties based on expected spend levels.
SLAs and KPIs. If the goal is to manage the organization’s supply base globally, using a standardized process, terms & conditions, and information system, it also makes sense to standardize agreements and performance metrics.
Taxes, benefits and bill rates. Knowing how payroll taxes and benefits vary by country is critical when trying to establish the local negotiation leverage on mark-ups or bill rates, as the variations from country to country can be significant.
Labor-market trends. Understanding current trends and predicting future developments is critical to understanding the extent of potential leverage with staffing suppliers.
RFPs. Issue a request for proposal to evaluate suppliers using a consistent set of criteria, and to establish a complete picture of global availability of supply. When suppliers provide information about exactly which locations they can support and how, a clear picture will emerge of the total supply available to meet the organization’s needs.
Supplier health. Conduct comprehensive financial analysis of suppliers. Staffing is a capital-intensive business, so it is important to conduct a detailed analysis of a staffing company’s financials, as well as a supplier dependency analysis.
Taking a contingent workforce program global can yield benefits, but it is not without challenges. The use of a contingent workforce in many global organizations still tends to operate in country-specific fragments, with little to no centralized oversight to ensure common practices are globally adopted and information is shared and leveraged, according to the “Best Practices in Global Sourcing” report. “Therefore, establishing an integrated global CW program requires planning, research, and extensive communication,” it stated.
The full report is available online to CWS Council members.