The Sourcing Industry Group (SIG) published its 2017 report outlining the benefits of utilizing a third party contingent workforce management provider. With the population of contingent workers growing leaps and bounds each year, companies are spending millions, even billions of dollars in this category.
As noted by the author, Jay Lash, provides the following introduction to the report:
“When contingent labor is managed centrally, procurement has the chance to leverage their company’s spend for better pricing and standardized contracting with the staffing suppliers. This ultimately leads to better visibility into what is being paid for resources and, in addition to saving money, offers a more consistent vetting process. An often-overlooked benefit when this spend category is handled by one department or role, is compliance. With the changing laws and the different regulations that relate to these workers, it is easy for engagement managers to make some costly mistakes. Treating contingent workers like employees can lead to co-employment risks, for example, errors in overtime or holiday pay can lead to U.S. Department of Labor – Wage and Hour Division claims. Centralization does not eliminate those risks, but if all activity in engaging these workers is handled in one place, at least control over the process of sourcing, selection, on- and off-boarding and payment can be monitored, and with the right level of expertise, many of these risks can be mitigated.
Once the category begins to reach spend levels in the multi-millions of dollars and hundreds of assignments/workers, it tends to reach a level of critical mass. This is where it requires more time and expertise than most commoditized categories. It is also a point where technology needs to be aligned to this category so payment and reporting can be automated. As a classic example of “procure to pay” solutions, a Vendor Management System (VMS) can drastically reduce the errors and the time required to accurately manage this category. If there is a need to centralize the management of the process and a need to automate those processes, then outsourcing to a Managed Service Provider begins to make sense and offer high value, so it should be a serious consideration. Once a company has reached this stage, a business case can be made for outsourcing versus trying to continue to manage the contingent workforce in-house. There are a number of reasons and benefits that make up the business case to outsource. For those organizations that find themselves in this position, a few questions should be asked to help provide the rationale and gather support from various organizational stakeholders.”
For a more in-depth analysis of the benefits of a third-party contingent workforce management provider, download the full report.
If you or a member of your team would benefit from a further discussion on how PRO is helping companies implement winning contingent workforce management programs globally, please contact a PRO representative at 800.291.1099 or email at firstname.lastname@example.org.
Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of PRO Unlimited and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.