CWS 3.0: January 16, 2013

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CW Management: The Tipping Point

Over the last dozen years the rise of the managed services program and vendor management software technologies have not only changed the way companies manage their contingent labor but how they get things done at the granular level. The visibility into the myriad workforce options gives companies the flexibility to incorporate many potential work arrangements to get the job done. Given the numerous options and the growing maturity of contingent workforce management, we are at a tipping point in how companies manage this labor pool. Here are some trends I expect to see in 2013 and beyond.

  • The contingent workforce will undoubtedly continue to grow — U.S. healthcare reform alone assures that as companies will look to reassess their workforce ratios to avoid the added expenses associated with the new law.
  • The battle between human resources and procurement will end. I have said in the past that the role of CW management has been an HR endeavor with elements of procurement and I think the market will begin to tip toward HR. At the same time the role of external workforce management is becoming a discipline into itself with more and more companies looking to create entirely new categories dedicated to managing this critical resource. These positions are not exclusive to HR or procurement but a combination of both.
  • VMS technologies will evolve but will be challenged by the “consumption gap.”. In the book Consumption Economics, authors J.B. Wood, Todd Hewlin and Thomas Lah describe how in many circumstances the features of technology often outpace the clients’ needs, and many software firms spend tremendous amounts of money on development to build feature sets that may not have widespread adoption. Some VMS providers have identified that as much as 80 percent of the functionality of their application lies unused. Buyers will need to get educated on the real-life applications of the VMS and it will take effort on the part of the providers to do so.
  • Managed service providers will become more strategic or go the way of the dodo bird as buyers become more sophisticated. The need for tactical solutions has passed and buyers are making their suppliers more accountable for driving programs forward or they face an ugly renewal process. There will be a separation in the space as MSPs that are innovative and solution-oriented gain market share over commodity suppliers who win on price. The other side of that coin are those companies that choose to run their programs without an MSP.

What do you think will happen this year? Comment below. You can also join SIA experts in the conversation during a Jan. 22nd webinar.

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