The importance of managing and centralising external labour was a central theme of the recent summit of the Consultancy Procurement Council. Mikael Lindmark, a services procurement expert, offered up interesting advice for organisations to manage their external workforce.
These comments were based on a recent survey carried out by SAP Fieldglass in conjunction with Oxford Economics entitled ‘External Workforce Insights 2018’. This report analysed the external workforce management of 900 companies, 450 of which had an annual turnover of more than £5bn. The results showed that 44% of the total workforce spend of these organisations was used for external labour.
Lindmark observed that organisations who can manage their external workforce effectively will be able to enjoy a competitive edge.
An organisation cannot rely solely on an independent professional or provider to meet their requirements. Because of this, companies often hire external workers to manage different aspects of their work. This is more prevalent in certain categories, where skilled workers are needed and it is difficult to recruit permanent staff.
Today, many organisations employ external staff in central roles and critical areas. As a result, it is imperative that the external workforce is properly managed to guarantee the smooth running of a business.
Lindmark pointed out that cost is not the deciding factor and that recruitment staff now look at value-for-money to stay competitive. A skilled external workforce allows organisations to deliver more and improve products, so the cost of hiring the workforce is the most important factor in the long term.
According to Lindmark, it is crucial that all stakeholders work on the same platform, including the procurement professionals, the buyer, the supplying firm and the worker. This means that, to handle external workforce correctly, organisations need to invest in the right systems and tools. Procurement needs to convince C-level administrators that a decentralised approach will be ineffective, resulting in inefficient processes and potentially high expenses.
All this holds many exciting possibilities for the procurement industry and, as Lindmark concluded, “things are changing”. There is still a long way to go for optimal efficiency, but even now there are notable developments, the most obvious being that HR departments are increasingly involved in external workforce recruitments, alongside procurement staff.
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