Data from Staffing Industry Analysts, the publisher of this newsletter, reveals that customers are looking for more than just contingent labor -- they want help with their whole contingent program. It's not about price. They want a more strategic and consultative relationship. Fortune 100 companies, especially, are no longer satisfied with the traditional supplier-vendor relationship. The state of the economy has heightened this shift in expectations.
"They want a business partner that can help them with their needs. Many of our clients today not only have very large demands in the area of contingent labor but also permanent labor, and they don't want to manage 100 suppliers; they want to leverage a smaller group of suppliers that have proven to be the most productive and responsive in their area of expertise across skill sets," says Hinckley.
It has not always worked that way. In the past, large organizations have had a significant number of suppliers servicing them. This can be traced back to the sales model of the staffing industry where a supplier developed a relationship with lower-level managers within the organization. The staffing organization would identify an entry point and tried to penetrate throughout the client company from there. What normally resulted was having hundreds of people in the organization -- hiring managers -- making independent labor decisions.
With the evolution of contingent labor management and technology, the C-suite now has visibility into the company's spend in this area. They don't want their people manipulating the system to bring in additional resources. Given the economy, globalization, and the changing workforce, there is focus on compliance and a streamlined contingent labor strategy, cost containment and enhancing shareholder value.
"So if you look at it from a supply chain perspective, many organizations were optimizing their supply chain processes. But they didn't optimize the talent in the supply chain. Now you have the two coming together. Corporations want to optimize the people within the process and that optimization means not only fixed and variable costs but it also means this -- how do I optimize my variable labor and fixed labor ." says Hinckley.
Hinckley's advice to corporations is to view temporary labor as a long-term strategy, not just as something that fulfils a temporary need in a moment's notice. In fact, the labor issue needs to be looked at holistically, not as contingent or permanent separately. Companies need to examine and change their internal cultures to work with a blend of people -- traditional employees and contingent labor. The goal is to have a team comprising both, but who act as one.