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 use of a contingent workforce is growing
Percentage of executives who say they are increasingly using contingent, seasonal, intermittent, or consultant workers
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.
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.
MSP spend is increasingly focussed on global programs
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.
Roadmap to success
Guidant Global first contracted with a publicly traded, global mobility company in 2007. At that time, it was a US-based solution only. Fast forward to today and Europe is now their largest market, Asia is becoming an increasingly bigger portion of their global market share and North America is actually shrinking as a percentage of their overall business.
We have now successfully targeted other markets based on utilisation, demand and readiness. This includes Germany, the UK, Sweden, Portugal, Poland, France, Luxembourg, India and China.
At each stage, we were able to come with definitive proof points from the countries that went before them, and bring forward those examples of how we were able to take cost out, improve efficiency, increase compliance, visibility and reporting, ensure talent quality was enhanced and availability improved.
We think the results speak for themselves. We now have upwards of 80 per cent of their global contingent labour in the programme, with a continuing roadmap to pick up the other key markets. Time-to-fill and fill-rates are in the 99 to 100 per cent range, our fill-rate is more than double their internal processes, and fill time is less than a third of what they spend on direct hires. The company also hired more than 90 contract workers directly from the programme, without any fees being charged. In 2019, spend under management was $83.8 million, with $7.9 million in direct savings and $8.3 million in indirect savings.