Contingent Services Procurement: Do It Better or Get Left Behind
Moreover, the article also cites a recent Duke University/CFO study suggesting "Chief financial officers say about 23% of recent hiring has been directed at contract and part-time employees, up from 17% prior to the recession." Moreover, "Companies expect temp hiring to continue growing faster than overall hiring in the next year," the same survey suggests.
The WSJ provides concrete evidence of the trend towards a contingent and part-time workforce, even in the case of unionized companies. Consider the case of Harley-Davison, that "signed a new union contract last month that creates a tier of 'casual workers' with no benefits and no minimum number of hours, allowing the company to call up workers when they're needed." Of course underlying this move to non-full-time hires is the state of the economy -- not to mention the uncertain economic environment (we're not uncertain at Spend Matters. We believe we're currently in recession, but don't let us say "we told you so" in 2011).
In our view, procurement organizations that aren't aggressively ramping up their global contingent workforce management efforts are going to be left behind as their company's actions get ahead of their ability to deliver on effective services procurement programs. But don't think for a minute of "leaving it to HR." Granted, procurement must work hand-in-hand with HR and key business leaders (e.g., IT), a department increasingly dependent on contingent workers. And they should also get to know the managed services provider (MSP) and vendor management system (VMS) landscape as well. HR should definitely be a partner and not the driver of contingent procurement efforts.
If you're curious to learn more about the services procurement landscape and the differences best-in-class providers and partners can make, I encourage you to check out our latest (free) Compass research on the subject:
Selecting Services Procurement Technology – Options, Approaches, and Philosophy
The Managed Services Connection -- The Evolving Role of MSPs in Services Procurement
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Contingent labor market has always been the "canary in the coal mine" as an economic indicator. Back to the recessions of 1982, 1991, 2002 and current (see the HCM white paper, Ahead of the Curve on our website) staffing
G industry was the first to know going in and first to know coming out.
The recent uptick in contingent labor usage is a clear indicator that we are in a recovery. However, it will continue to progress slowly.
I disagree with you this time around (re: the recovery).
I think we could be seeing a lasting shift to greater part-time and contingent hiring given the long-term uncertainty in the economy as well as the rising costs of employing for full-time hires (e.g., uncertain new healthcare costs).
Moreover, I believe the lingering potential of cap and trade and the cost of building new facilities here vs. overseas (when the "cap and tax" components are factored in) is also delaying full-time hires.
Still, I hope secretly that you're right and I'm wrong. Recovery benefits everyone -- I just don't see us sustaining the rate of GDP growth, let alone staying out of negative territory in Q3 and Q4. Consumer spending indicators are ugly. Check out the Consumer Metrics Institute if you want to zero in on why I'm so negative at the moment.
I agree that the ranks and reliance on the part time labor will grow to greater daily worker rates than have been seen before. I believe, as Charles Handy predicted in his book "Age of Unreason" in 1989..., Among the ideas he has advanced are the "portfolio worker" and the "Shamrock Organization" (in which professional core workers, freelance workers and part-time/temporary routine workers each form one leaf of the "Shamrock").
I believe this is the future has he predicted. Another potential accelerate to the contingent workforce will the the adoption of "ObamaCare". If workers have access to real healthcare alternatives, they will leave the big corporation and pursue more freedom in their work life/balance goals.
I encourage you and your readers again to read our white paper title Ahead of the Curve. It details this an other factors we have referenced in our chat here.
Great dialogue, thanks Jason.