When building the business case to implement a contingent workforce program it is critical that the organization and stakeholders understand the return on investment or value they will receive for such a massive undertaking. For organizations that have not had a formal process for tracking non-employee labor, articulating the value is not usually difficult.
The areas that we usually will see a business case focus on are:
Visibility. Who is engaged, where are they working — and sometimes more important — are they still there?
Risk. What systems and buildings do they have access to, and has this access been terminated when the assignment ends?
Cost. What we are paying hourly for each worker as well as overall spend. It’s easy for an individual manager to understand what they are paying for their contingent workers, but when an organization sees what its total non-employee spend is, it can allow for a very different conversation.
As you can see, based on just these three areas, it is usually easy to show the ROI/value that the organization and stakeholders will gain. However, once the initial program is launched and has reached steady state — resources are tracked, risk is mitigated and costs are visible — how does the program continue to deliver value?
The other costs. So often, there is a direct correlation of value to dollars and at some point – cost savings is difficult to show. But many program managers agree that value cannot be aligned just to dollars or cost. Squeezing margins, applying discounts, and pushing down hourly rates can only be done so much before they begin to have a negative impact on the organization. Indeed, constantly applying these measures can have the opposite effect and end up costing the company more in the long term. Staffing partners will look to those programs that allow more opportunity for gross profit — as will recruiters when determining to which opportunity to submit their prime candidates.
If not cost, then what? To know what your stakeholders value, you must ask them — as value is going to be different for everyone. For some, it could be removing obstacles or processes to enable them to onboard a resource more quickly. For others, it might be taking some of the tasks off their plate so they can focus on their work. And some stakeholders will continue to correlate value to cost, which can be frustrating, but do not get discouraged.
The strategic route. Do you know where your next value proposition will come from? Here are some areas to explore as you move your CW program from tactical to strategic:
Quality. Do you currently gather feedback on the quality of the program, the suppliers and the candidates? If you do, are you doing anything with it? Utilizing metrics that focus on quality can bring great value to the stakeholders and the organization. Knowing your partners and your candidates view your organization and program as a quality program means you have committed partners and skilled candidates that want to work there.
Efficiency. Are there areas your program can bring additional value with efficiency? It’s not necessarily the number of clicks required to create a request or onboard a candidate but what about efficiency with the type of resource needed? Providing education to the stakeholders about the different types of engagements available (staff aug., SOW, IC) is valuable and can provide additional risk avoidance.
Cost. Although we mention this cannot be the only focus, it’s possible there still may be opportunity for cost savings. Do you have additional rogue spend or business units that are not currently part of the program? Could the processes and procedures you have in place bring value to those groups with time savings or best practices?
As you can see, there are ways your CW program can continue to deliver value to the organization, the stakeholders and your external partners. Take the time to understand what each of these critical components of your program views as value and then get creative on ways to deliver it.