Business leader’s confidence in hiring and investment decisions has plummeted by 21 percentage points in the UK to net minus 5 between February and March, according to the latest JobsOutlook data from the Recruitment & Employment Confederation. A similar situation is developing in America as Gallup’s Economic Confidence Index fell by 19 percentage points from 41 in February to 22 in March.

Meanwhile, contract-based recruitment activity declined by around 20 per cent at the end of March, with the outlook expected to worsen before it improves, according to industry experts. 

This is particularly challenging for human resources and procurement leaders in businesses such as supermarkets and food delivery firms and their suppliers, which are currently thriving and having to draw heavily on contingent workforces. There are also many businesses facing looming project deadlines that still need to be met, despite the current economic climate. 

HR and procurement functions find themselves stuck between a rock and a hard place

It's unsurprising then, that HR and procurement functions find themselves stuck between a rock and a hard place. For many, it can be a challenge trying to juggle the myriad demands of internal stakeholders, many of which may be business critical yet feel contradictory in times of uncertainty - such as maintaining headcount and ensuring access to requisite skills while simultaneously preventing costs from spiraling.

Procurement functions must therefore work out how best to step up to the challenge of managing their workforce in the current climate, in alignment with the values and commercial needs of the business and in a cost-efficient manner.  

Hiring needs

They can start by ensuring they fully understand their current hiring needs, which should always be the starting point for all talent management decision-making. 

“Businesses should plan and design a procurement talent structure so they know exactly what they are looking for,” explains Dr Washika Haak-Saheem, associate professor in human resource management at Henley Business School. 

“To attract new talent, businesses need to know where talent is located and how to track the needed talent, or to manage and develop skills which are needed in an organisation, and not just today, but probably in the next five years.”

Procurement leaders also need to learn how to work in collaboration with other business functions. “Procurement is used to working in silos, but I believe that a well-established connection to the entire organisation is essential,” says Haak-Saheem. 

Collaboration could also mean drafting in a managed service provider (MSP) to support the recruitment of contingent workers. Such a partnership can play a key role in overcoming skills gaps that arise in projects and can help the business to optimise talent management efficiencies while also controlling costs.

To visualize the impact this can have on a business, it's worth reviewing MSP in action. Take the needs of one major UK retailer, who after sustained period of growth needed support in sourcing the necessary talent to fill its increasingly large and complex IT contractor needs, while effectively managing costs.

Working with Guidant Global, the retailer was able to streamline its contingent resourcing processes, improving both visibility of its skills gaps and its ability to consistently fill them - while also cutting costs. Building on initial success, the MSP initiative was expanded across the business and helped to spur further transformation of contingent recruitment practices, generating in excess of £3.6m in annual savings by 2019. Clearly the business case speaks for itself. Yet despite such concrete results, it is still critical that businesses can identify their own specific pinchpoints in order to justify the use of an MSP. In doing so they will avoid outsourcing for the sake of outsourcing and instead demonstrate a real return on investment.

If the success of any organisation is dependent upon its staff, it increasingly pays dividends to optimise a contingent workforce strategy by outsourcing the procurement of people to third parties. There are, though, tiered benefits and those who carefully delegate responsibly in this crucial area stand to gain the most.

Tier 1: Visibility and resource management

“We are starting to see emerging procurement-as-a-service at scale,” says Emma Rees, co-founder and chief executive of Deployed, a platform helping companies to scope work better. “Right now, many companies are taking a piecemeal approach to outsourcing services procurement and, from this year until 2024, I predict we will see further consolidation.

“The ‘job for life’ is dead. And with its demise we’ll see the end of the primacy of the employment contract as the primary way of engaging with resources.” In particular, services procurement (SP) and statement of work (SOW) management are increasingly critical to future-proofing organisations, Rees argues. “Mini SOWs will even be used for permanent staffing, for those staff seeking increased internal mobility and who want better milestones of success within long-term employment,” she says. 

Further, the use of an outsourcing partner - such as a managed service provider - not only helps to reduce operational costs, but also enables the business to realise savings from third-party spend - with one global agricultural firm identifying cost savings of $5m in just six months after partnering with an MSP on a total talent management programme.

Tier 2: Flexibility and cost control

The introduction of IR35 in the UK, AB5 in California and other tightened employment regulations around the world, is pushing organisations towards better SOW management. Still, for those that take the leap, there are manifold benefits. A mindset change is required, however. 

Brian Beck, Accenture’s Pittsburgh-based procurement category manager and contingent labour tower lead, says: “All too often companies separate their non-full-time and direct employee labour force into individualised internal commodities, with a narrow, focused view of each silo separate of one another. In doing so, they lose the ability to leverage areas of greater efficiency and savings by bringing all contingent labour spend, inclusive of SP and SOW, into one centralised, outsourced programme managed by a group of contingent labour professionals. Ideally, that group would have managed several other comparable programmes yielding exponential gains across their clients’ enterprises.”

Beck notes that when companies mature to this state, they not only increase their visibility into their external workforce, but also benefit from greater accessibility of this area. This access ensures everything from their corporate culture and the talent experience to the quality and success of the engagement are optimally aligned.

Too often companies separate their non-full-time and direct employee labour force into individualised internal commodities

This opinion chimes with Arun Srinivasan, general manager of SAP Fieldglass, a software company that provides a cloud-based system for SP and external workforce management. “The obvious and most far-reaching benefit to enlisting external workers is the added flexibility and cost control of operations,” he says. “It allows businesses to add highly demanded, specialised skillsets, often tied to a specific project; one typical example being data scientists. 

“Other benefits include driving compliance and, in turn, reducing risk from an operations perspective. Furthermore, the use of third parties to help procure that external talent provides even more flexibility, given the access to the well-vetted talent pools, whether based on skillset, industry or geography.”

Tier 3: Delivering greater strategic value and alignment

Clearly, the first tier of outsourcing the procurement of people generates improved contingent workforce visibility and resource management. The next level of commitment leads to superior business planning, insight and spending management. And by elevating to the third and final tier, total talent management can be achieved through third parties. 

This full-service outsourcing frees up internal procurement resource to deliver greater strategic value and alignment.

“Through the visibility gleaned in terms of gaps in talent and demands for specific job functions, recruiters and human resources managers can benefit from the strategic alignment of their total talent recruitment initiatives, including using the same resources to find and manage both traditional employees and external workers,” says Srinivasan.

Ultimately, in this digital age, and more so as companies deal with the fallout from the coronavirus, being nimble yet united is crucial to triumph in the long term. Accenture’s Beck says: “Procurement, HR, finance and other key business stakeholders can forge an approach that can expedite labour authorisation and contractor compliance, as well as enhance resource quality, while still driving a mentality of cost-conscious purchasing. 

It increasingly pays dividends to optimise a contingent workforce strategy by outsourcing the procurement of people to third parties

“Outsourced providers are typically measured via service-level agreements and key performance indicators that are tied to all these items and many more. Outsourcing this role does not release any measure of control; it creates an environment where the client can more expressly manage and hold accountable the outsourced provider to drive betterment.”

Evidently, the procurement of people has changed significantly and businesses with ambitions of keeping ahead of market rivals ought to study the advantages of outsourcing, before it’s too late.

How you choose to approach contingent labour can vary dramatically depending on where you are in the world. Factors that can shape this approach include diverse regional regulations, compliance laws, culture, talent availability and market maturity. 

It’s unsurprising then that many multinational enterprises have adopted nuanced strategies, including utilising regional or local managed service providers (MSPs), to unlock regional value and overcome the talent supply challenges they face.

Yet these regional approaches are not devoid of challenges. Major issues can arise between cross-functional stakeholders in different regions.  

Whether it’s human resources, procurement or finance stakeholders, each brings a slightly different set of experiences, objectives and expectations to the table that may or may not align with the strengths and weaknesses of a particular supplier. 

The result is a stand-off where different functions and different stakeholders clash over lead roles, the objectives that need to be met and the supplier considerations required to fulfil these objectives.

Further, with markets that have a concentrated mix of supply, the idea of potentially contracting with competitors in that market could be challenging to say the least.

However, there is a growing demand from multinational organisations for a more global MSP solution. This is driven in part by growing sophistication within the space, particularly in the evolution of contingent labour and MSP technology. Subsequently, organisations are increasingly looking to take advantage of this across their portfolio.

Shifting workforce ecosystems are also driving the need for global MSP solutions. The long-term and pronounced trend towards a rebalancing of the workforce mix, from full-time employment to flexible labour, shows no signs of slowing down. Contingent workers now make up a significant portion of the pie and are an increasingly important part of the overall workforce strategy. 

Talent acquisition in a crisis

It would be naive of any global business to neglect the versatility, flexibility and scalability offered by this burgeoning pool of contingent workers. Take the current situation with the COVID-19 pandemic; as organisations require an unprecedented number of employees to work remotely, the business case for access to a flexible, scalable workforce of non-permanent workers speaks for itself.

It would be naive of any global business to neglect the versatility, flexibility and scalability offered by this burgeoning pool of contingent workers

Compounding this is a growing awareness and readiness for total talent engagements in many maturing markets. In turn, there is a greater appetite than ever before to address this in major regions across the globe.

Each of these factors are driving organisations to look at talent more strategically and many are adopting an enterprise-wide view to understand and leverage these assets within their workforce plan. 

However, some organisations mistakenly think they can do a simple copy-and-paste replication of the same model and place it everywhere they do business. This just doesn’t work.

So how can you ensure regional success with a global model? Well, it comes down to gathering detailed requirements at a very local level, which can then flow through all of the business areas that consume contingent labour, including IT, legal, finance, HR and procurement.  

It’s about looking at each region uniquely and understanding how local governance can impact the way the solution is developed. It’s also about understanding the different ways of working, including accounting and finance requirements, how invoices are received and paid, how shifts are managed, how labour is requested, delegation of approval and so on. 

Technology

Of course, we can’t talk about an international solution to contingent labour without considering the technology that ties all the necessary workforce data, information and billing together into a cohesive whole. This is a major part of ensuring local success in a global programme.

First, it’s essential to implement an enterprise-wide procured pay system for contingent labour. This establishes a single system of record, common reporting, delegations of authority and financial controls, which all mirror corporate standards and best practice.

At Guidant Global, we recommend a standard Vendor Management System (VMS) that is globally deployed, at least in essential markets. In doing so, many of the benefits of a global MSP solution can be accomplished, even with regional selection.

The technology can be enabled with parent-child tenants, so that you can utilise multiple talent providers. This lets you retain the enterprise-wide reporting that aligns to similar standards, parameters and definitions, without sacrificing considerations around regional supplier strengths, objectives and capabilities, as well as regional or market-based needs and solution requirements.

Integration is also key, enabling the enterprise solution to dial into local requirements. This ensures a holistic process, elimination of manual duplication, a tight audit trail, firm compliance and alignment with local standards. All are critical considerations regardless of whether you are operating in a familiar market or expanding into somewhere new.

Finally, with a VMS configured to support local requirements, your systems of record become an enabler promoting efficiency that, from a compliance perspective, is an area where we see tremendous value. 

Ultimately, our approach equips you with a solution that promotes global alignment, while enabling every arm of your business to unlock the regional value required for growth.

Rapid globalisation and proliferation of digital technology have enabled a vast expansion in the scope of once localised talent supply chains. 

Now canny organisations reap the rewards of a larger-scale talent pipeline. However, it’s not straightforward to manage, especially given the unstoppable march of technology. 

With the requisite capabilities continually evolving, how can businesses better prepare for workforce skills shortages that potentially lurk in the near distance?

1. Ensure business functions work closer together

Break down the silos between functions, such as procurement and human resources, to engender a joined-up approach; that’s the overwhelming advice and imperative. 

“A cohesive plan across the business is critical,” says Dr Steve Foster, manager of business consultancy at payroll and human resources software and service provider Zellis. 

“It should be based on an assessment of overall business objectives, what skills will be needed to match those objectives and the current skills of the workforce to meet the demand. This approach will identify gaps in skilling and determine whether those gaps can be met by training and redeploying existing staff or by hiring.”

Robin Hoyle, head of learning and development at training providers Huthwaite International, agrees. “Business functions can be slow to recruit because they are thinking about immediate requirements rather than longer-term needs,” he says.

“Departments need to be constantly scanning the business environment and anticipating future needs while linking them with strategy. Recruitment is often only part of the answer, though, and workforce planning needs to focus on upskilling existing staff to meet the challenges of the future.”

2. Embrace lean and agile approaches to talent management

As Niamh Mulholland, director of communications and external affairs at Chartered Management Institute, points out: “Every business is a people business and effective talent management is an essential prerequisite to success.”

Evolution of both talent attraction and retention is increasingly asking organisations to dial up their level of personalised management of workers. To achieve this, many are turning to a leaner, more agile approach to talent management that is wrapped into the wider business strategy.

This can require teams to embrace more fluid, innovative ways of working, such as the rapid scaling up and down of teams as projects demand, as well as a commitment to relentless improvements throughout the talent management process. Enterprise work management tools can also help to drive cross-functional collaboration by enabling functions to become more digital and able to cross-pollinate talent demands and needs

3. Use technology to predict skills gaps

Predicting skills gaps is more of a science than an art and it pays to invest in tech. Analytics tools and technologies driven by artificial intelligence, allied with the explosion of data, has led to solutions that can both manage current talent on a personal level while also identifying potential shortcomings on the horizon and beyond.

The recruitment of new talent can only solve so many problems. It’s critical then that effective workforce planning strategies need to consider existing skills gaps and identify how best to upskill existing employees to meet tomorrow’s challenges. 

Caroline Andrews, DHL Express vice president of HR in the UK and Ireland, agrees that technology plays a central role in addressing the skills gap and improving both acquisition and retention. She is clear that, in a digital age, organisations must embrace tech to survive. 

Harnessing the digital potential of our future leaders can only bring positives

“We are a business that differentiates from others on the quality of its people and leadership,” she says. “There is a need to get to grips fully with the new concept of ‘e-leadership’. While this may seem distant to us at the moment, harnessing the digital potential of our future leaders can only bring positives as we welcome a new generation into the workforce.”

Perhaps e-leadership is not so far away after all, with the world in the grips of the coronavirus pandemic and millions working online from home.

4. Outsource recruitment to expert third parties

David Clarke, global managing director of workforce advisory at LHH, a leading integrated talent development provider, extols the virtues of third-party recruitment.

“Technology and insourcing talent acquisition carry many benefits, but for certain role types in certain markets, the cost-value equation swings heavily in favour of getting an expert to help,” he says. “Companies, therefore, need to be careful to avoid thinking that the digitalisation of HR can add value to all problems equally.”

Andrews, from DHL Express, says: “We implement a blended model as best practice, with in-house specialists that understand the business culture and requirements in depth, and strategic external partners that provide the latest insights into candidate behaviour and trends in the marketplace. Collaborating with partners provides the best candidates and experience.”

By exploring and investing in these four areas, organisational workforce planning can and should improve. But it’s clear that if they fail to embrace technology and new ways of working, both procurement and HR functions will be left behind.

Businesses are reluctant to invest in staff recruitment amid the COVID-19 pandemic, with more than a third (35 per cent) of global organisations implementing a hiring freeze and almost half (46 per cent) delaying employee on-boarding, according to a recent survey by Mercer.

Nevertheless, one way business leaders can prepare for the end of the pandemic, whenever that may be, is by re-evaluating their global resourcing and talent acquisition models to ensure they are appropriate and able to help their organisation return to some sort of normality with minimum delay. 

Almost three quarters (72 per cent) of UK businesses struggled to attract the right talent in the last quarter of 2019, according to the latest Quarterly Recruitment Outlook by the British Chambers of Commerce and Totaljobs, so it is clear resourcing models for many businesses are not working. But what is required and where should employers start? 

A good place to begin for business leaders attempting to create a people-first business is with an assessment of perhaps the key component that should underpin their resourcing models: employee experience. This should extend to every employee touchpoint, which means capturing employees’ experience during their job application process and point of exit, rather than simply while they’re with the organisation.  

Employee experience was cited as the top trend in LinkedIn’s Global Talent Trends 2020, with 96 per cent of human resources and hiring professionals believing that employee experience is becoming more important, and 94 per cent of recruitment professionals considering it very important to the future of recruiting and HR. 

This is why it is no longer enough for businesses to concentrate all their efforts on an external corporate brand, which is essentially their value proposition to customers, if they are serious about becoming an employer of choice. 

“Organisations focus very strongly on the market side and making sure consumers understand the branding of the company. But there is less focus and less attention paid to the internal audience, or even to the labour market, so a lot of work needs to be done here,” says Dr Washika Haak-Saheem, associate professor in human resource management at Henley Business School. 

Employee value proposition

Employee experience should be used to inform, develop and refine an organisation’s employee value proposition (EVP), which should set out exactly what employees can expect on joining an organisation and the experience they are likely to encounter in their day-to-day job. 

According to Ed Houghton, head of research and thought leadership at the Chartered Institute of Personnel and Development, an effective EVP is based on three concepts: attractiveness, to help build greater employee commitment and retention; effective and appropriate compensation; and cost-savings over the long term. 

“So the EVP should not just be seen as a mechanism to draw in talent to an organisation, it should also be seen as a way of refining, developing and enabling employees who are already in the organisation,” he says. 

HR must take responsibility for ensuring the interconnectivity between, and alignment of, an organisation’s EVP, corporate culture, which should help to shape and drive desired employee behaviours, and corporate brand, or risk the authenticity and therefore effectiveness of each proposition being undermined. Only then are they fit for purpose as the foundation of an organisation’s resourcing model. 

But HR leaders cannot do it alone; they need to work in collaboration with other functions of the business, including procurement, marketing and public relations. “It has to be a joint effort between HR and marketing people, who you need to establish a brand,” says Haak-Saheem. 

“Organisations also need PR and procurement, so it’s a joint effort. It’s quite a complex and challenging task, so therefore it’s not done overnight; it’s something that evolves over time,” she adds. 

Paul Gilliam, HR director for L'Oréal UK and Ireland, agrees, particularly in the context of an organisation’s EVP. “One of the main challenges involved in any EVP development is ensuring the right stakeholders are involved and informed through the whole process,” he says. 

“This is a critical component in our business, as we have continually worked to ensure alignment between our HR teams, our talent acquisition experts, the corporate communications team and our global direction from the group.” 

Informed stakeholders understand fully the importance of collaboration with the wider business and the continual development and refinement of their organisation’s EVP, in line with its corporate brand, to help deliver on this. They understand the effectiveness of their resourcing and talent acquisition model relies upon these factors and not their legacy brands, because the strength of a brand will only extend so far.