what’s the right model for your contingent workforce?

What’s the Right Model for

your Contingent Workforce?

Tara Knobel

Confidential

Introduction

Tara Knobel

Regional Director – Contingent

Workforce Solutions

13 years experience in the talent acquisition sector

Background in resourcing and procurement

Designed, implemented and managed complex contingent workforce

programmes for significant AMS customers

Confidential

Introducing AMS

Alexander Mann Solutions (AMS)

Founded as a pure-play RPO & MSP

organisation in 1996

Over 2,300 RPO & MSP specialist staff

Deliver into 61 countries

Recognised as the Global Market Leader

Contingent Workforce Solutions

24 programmes live

Over AUD$1.1 billion of client spend under

management

Manage over 8,500 unique contingent

workers on any given day

Process 336,000 timesheets a year

Technology independent, offering our clients

choice and flexibility

What Contingent Workforce

Models Exist Today?

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Contingent Workforce Alphabet Soup

Are you ready to enter the world of contingent workforce jargon and acronyms?

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Primary Vendor Models

Managed Service Provider (MSP) Preferred Supplier Model Contractor Management

Outsourcing (CMO)

A company that takes on primary

responsibility for managing an

organisation’s contingent

workforce programme

Typically independent of a

staffing supplier

Typical responsibilities of an MSP

include overall programme

management, reporting and tracking,

supplier selection and management,

order distribution, and consolidated

billing across programme suppliers

Staffing suppliers provide a client

with temporary and contract

staffing services

Typically managed via procurement

with input from HR and business on

supplier selection

Hiring managers having decentralised

access to suppliers to fill vacancies

A vendor who manages the compliant

contractual engagement of a contingent

worker, payrolls them and provides

ongoing management of the contingent

worker through their assignment

Independent of staffing suppliers, they

do not recruit contingent workers

Typical responsibilities of a Contractor

Management / Payroll Vendor include

legal and compliant engagement,

timesheeting & contingent worker

payments, payment of statutory

charges & insurances, and contractor

care & management

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Integrated RPO

Inhouse + Preferred Suppliers

Alternative Models

RPO + CMO

Inhouse + CMO

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Sourcing Models

Vendor Neutral Master Supplier Hybrid

Sourcing model where the MSP

handles its tasks (e.g., order

distribution or candidate selection)

based on client-defined policies that

mandate that staffing suppliers be

Given an equal opportunity to

fill each order, and/or

Selected for each order based

on the same criteria.

Under a vendor-neutral model, the

MSP cannot, push orders to itself or

any other staffing vendor.

A MSP supplier that takes

responsibility for providing a client with

temporary and contract staffing

services

In a Master Vendor Programme, all

orders will usually go first to the master

vendor to either be filled by the master

vendor or distributed to the secondary

tier of suppliers

Sourcing Model where a blend of

different sourcing model attributes are

used to manage a contingent workforce

programme

Typically includes elements of vendor

neutral and master supplier

programmes

For example, a single provider may act

as the master supplier for light

industrial while IT positions are sourced

on a vendor neutral basis

Direct to market sourcing may be used

in conjunction with other agreed

sourcing channels

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Technology Solutions

There is no single

technology solution

that can manage

your entire model

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What is the market doing?

Staffing Industry Analysts: 2013 VMS and MSP Supplier Landscape

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And in the Australian market …

Integrated

RPO / MSP

+ CMO

MSP + CMO Inhouse +

CMO

MSP

(Master

Supplier)

MSP

(Vendor

Neutral)

Inhouse +

Agencies

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Best-in-class organisations rely on third party solutions

to improve efficiencies, performance and value for their

management of contract talent. These top performing

organisations are 55% more likely than all other companies

to leverage MSP and VMS solutions to enhance their

programs and outsource key components and processes

“ “

Aberdeen Group, April 2012

What’s the Right Model for

your Organisation?

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There is no “right model” .

The model that is right for your organisation may be very different to the model that is

right for the organisation sitting next to you

Will depend on a number of factors including:

Business Drivers

Procurement Strategy

Size of Contingent Workforce

Attitude to Outsourcing

Existing resources

and infrastructure

Risk profile

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A “Model” is just a solution … so first you need to define the issue

Before thinking about what model you want and what vendors you should talk to – get

clear on what you want to achieve from a contingent workforce solution

What problems are you trying to address?

What functions and activities do you need

to perform?

What outcomes are you trying to achieve? Cost, Quality, Time?

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Then ask the question “Who should do what”

Do It Yourself

Outsource Hybrid

Technology

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Functional Model

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Contingent Workforce Activities

Programme Management Contractor Sourcing Contractor Engagement Technology

Vacancy Request &

Authorisation

Approvals

Facilitate SOW Requests

Rate Card Management

Programme Reporting

Demand forecasting

Helpdesk

Sourcing

Screening and Selection

Pre-employment Screening

Offers and Rejections

Contract Generation

Visa sponsorship

On-boarding

Induction

Legal and Taxation

Compliance

Provision of technology

to manage workers

Technology helpdesk

VMS Implementation

VMS Administration

VMS Management

Supplier Management Compliance Contractor Management Payroll and Invoicing

Vendor Selection

Contract Management

Supplier Performance

Management

Policy Management

Business education on

process / policy

Risk Management

OH&S Management

Risk Management

Contractor Management

and Care

Extension / Termination

Management

Offboarding / Exit

Management

Timesheeting

Worker Payrolling /

Invoicing

Consolidated Billing

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Example of Scoping your Model

Offers and Rejections

MSP /

Inhouse

Team

Line

Manager HR

Sourcing

Supplier VMS

Payroll

Partner /

CMO

Manage offer process

Approve offer

Raise Purchase Order

Approve Purchase Order

Generate Work Order /

Assignment Schedule

Reject unsuccessful

candidates

Generate contract with

Contingent Worker

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Benefits and Disadvantages

Managed Service Provider (MSP) Preferred Supplier Model Contractor Management

Outsourcing (CMO)

Benefits

• Overall programme management

• Single source of truth

• Reduced vendor management burden

• Flexible and scalable

Benefits

• Access to niche / specialist recruitment

capability

• Flexible and scalable

• Competitive vendor neutral

Benefits

• Compliant payrolling and engagement

• Risk management / transfer of liabilities

Disadvantages

• Funding required

• Some vendors resent it

• Perceived loss of control

Disadvantages

• Multiple vendors to manage

• Multiple invoices to process & pay

• Inconsistent compliance

Disadvantages

• No sourcing capability

• Low VMS deployment capability

• No overall program management

Inhouse Model RPO / CMO Model Integrated RPO / MSP

Benefits

• Complete Control

Benefits

• Direct to market sourcing capability

• Best in class vendors

Benefits

• Total workforce management

• Single point of contact for business

• Direct to market sourcing

Disadvantages

• May not flex and scale with volume

• Internal headcount / cost

• Low external thinking

• Low technology (VMS) capability

Disadvantages

• Need vendors to work in partnership

• Processing may not be straight through

Disadvantages

• Potential risk of ‘eggs all in one basket’

• Need to find vendor who has complete

capability

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The Steps to Success

Step 1 Identify business drivers

Step 2 Be clear about what you want to achieve

Step 3 Design a relevant model, fit for needs

Step 4 Ensure model partners operate as an integrated team

Step 5 Measure, review and optimise

Thank You

Confidential

For further details please contact:

www.alexandermannsolutions.com

Tara Knobel

+61 (0)438 479 469

[email protected]

what’s the right model for your contingent workforce?

Recruiting & HR