In our annual Contingent Buyers survey, we ask contingent workforce buyers about the current and expected future state of their programs. When it comes to expanding their programs globally, 31 percent of buyers in 2012 said they had already done so, and 47 percent said they were very likely to do so within the next two years.
Proceed With Caution
However, based on feedback and discussions at the CWS Summit in Berlin last week, many who have already taken their programs global would urge caution. Indeed, many contingent workforce managers based in other countries who attended the Summit said U.S.-based CW managers do not know enough individually to drive the global programs.
We all know how frustrating it is when management makes decisions that affect us or our program without our input, yet it was surprising how many CW managers do not include their global counterparts when creating the processes and procedures of the program. Many at the summit said they felt as if they were just handed a program and told to implement it, causing frustration as well as a feeling of being set up for failure.
There are steps U.S.-based program managers can take to avoid this outcome, whether they have already implemented a global program or are planning to do so.
If you are considering going global:
- Find a local resource in the region you are considering and partner with them.
- Listen to them — they will know the environment better than you.
- Ask not only for their input but also their concerns.
- If there is “push back,” do not assume they don’t want to do it; most believe in the program, just not the methodology, which is usually based on their knowledge and regional insight.
- Provide insight and updates, let them be a part of the process and always keep them informed.
- Once you go forward with the rollout, be sure to hold scheduled calls as frequently as necessary to keep communication flowing.
- Most important: remember the program’s success is a reflection of the entire company not the individual country.
If you have already implemented globally:
- Conduct a call with your counterpart(s) weekly.
- If you are deployed in several regions, try to coordinate a monthly call with everyone. Although it may be difficult based on the different time zones, many conference attendees said they would rather be inconvenienced with a proactive call than face a problem that could have been avoided.
- Discuss not only concerns (if there are any) but also recognize their successes.
- Ask if there is anything that should be on your radar.
- Ask if there are any new legislative changes being considered or enforced in their region.
- Survey your users in all regions and provide feedback to their responses. Nobody likes to provide input and then never hear any follow-up to issues that were raised.
- Again: The program’s success is a reflection of the entire company, not the individual country.
Setting Appropriate Cost-Savings Expectations
Another factor to consider is what you expect to get out of your program in other countries. In the U.S., a critical business value in establishing a contingent workforce program is cost savings. The average savings from a new CW program in the U.S. can vary greatly, from 7 percent to as much as 35 percent, most often from wage corrections and margin capture. However, this lever is not necessarily available for many parts of the globe, where wage parity, a simple statutory expense structure and margins that are historically low often make wage- and margin-based savings nearly impossible at the outset.
This creates a challenge for contingent workforce managers to build a business case for global expansion. Indeed, the landscape is littered with CW managers, MSP and VMS providers who built their global program based on the expectation of immediate cost savings only to go home crushed when they fail to materialize.
So what value propositions do you successfully build your global program on? Experienced global managers know that increased worker quality, successful risk mitigation and global talent visibility are just a few of the core benefits of the global program. With rare exceptions, cost savings will eventually come, but often times not as soon as expressed in many an overly optimistic business case.