Whether you were an attendee or an exhibitor at the CWS Summit 2016 in Las Vegas at the Red Rock Resort, Casino and Spa, everyone can attest that this year was a raging success. Compared to previous summits, it was bigger, better and more buzzworthy!
We’ve all been witnessing a tremendous change in the contingent workforce marketplace. By now, we’re all gearing up for the prediction that by 2020 nearly half of all workers will be comprised of some form of contingent labor. As those numbers are creeping steadily toward the halfway mark, DCR Workforce is seeing more and more companies get ready to handle that explosion – particularly when it comes to Statement of Work projects and the relevant global capabilities that it entails to manage it properly.
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As I walked the floors talking to numerous people – from buyers to competitors to summit hosts – five forces shaping the marketplace of the future became crystal clear to me:
- The enterprise is taking ownership of Vendor Management Systems (VMS) technology.
- Companies with internally managed programs are on the rise.
- Centrally managed Statement of Work (SOW) programs have increased only incrementally.
- Enterprise initiatives for contingent labor programs are tapping into the sharing economy.
- There’s a push for global analytics across multiple continents and currencies.
Five Fundamental Forces
Let’s dig into each of these five forces.
Electing Enterprise Ownership. When selecting a VMS, many companies previously preferred MSPs to take ownership and licensing of the technology aspect of their service delivery. Now we’re seeing a shift toward the enterprise wanting a say in VMS technology. In some cases, the client selects the VMS separately and requires the MSP to utilize that technology within their program. In other cases, they jointly review the technology with the MSP to pick the platform that suits both parties. In both cases, the rationale we hear is that VMS has historically been one of the few enterprise software rollouts where the enterprise didn’t actively participate in the selection process. This is clearly changing.
Uptick in Internally Managed Programs. While MSPs bring great value and best practices to many enterprises, more firms have launched internally managed programs in the past year, with even more starting to evaluate the option. I moderated a roundtable discussion on this topic, so I was privy to their desire for more control over the process and less distance between the enterprise and the supply base. Most felt that they had a handle on joint employment and Affordable Care Act (ACA) issues through use of industry experts. While many organizations will continue to leverage quality MSP offerings, we’ll likely see more internally managed programs as we edge toward 2020.
Masterfully Managing SOW Programs. Statement of Work projects have been growing, yet those that are centrally managed have only increased incrementally. For the most part, SOW programs currently are in place to manage onboarding requirements for workers on projects or within outsourced arrangements. It seems until there is an appetite to manage the full services procurement lifecycle (RFQ, negotiation, etc.) most companies are not touching this aspect of contingent labor. The good news is that there are now full lifecycle SOW success stories, so we expect the velocity of these program to increase in the coming years.
Enterprise Initiatives and Shared Solutions. Enterprise initiatives launched to have contingent workforce programs are safely and effectively tapping into the sharing economy, including freelance management services (FMS) and talent marketplaces. Vendors like us heard loud and clear that the enterprise wants to be able to access talent directly and safely when appropriate, across various skill communities without requiring implementation of a multitude of new technologies.
Diving into Data with Global Analytics. One of the greatest challenges facing businesses today, unlike in the past, is not lack of data, but how to use the data they collect. As VMS users become more advanced, they require greater analytics and more robust system requirements, especially as it relates to SOW capabilities and managing across multiple continents and currencies. The demand of predictive (what comes next) and prescriptive (how we can make it happen) analytics with business intelligence and advanced functionality, tailored to their business is a necessity. Accessing data in an instant with at-a-glance reporting capabilities through canned reports as well as business intelligence and custom reports is separating the players in VMS solutions.
As you plan your long-term contingent workforce strategy for 2017, be prepared to include these five fundamental forces to masterfully manage the future of your contingent workforce.
Here’s a taste of the CWS Summit 2016 in case you missed it.
