CWS 3.0: December 15, 2010 - Vol 2.24

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Column Corner: Peek Under the Hood - Should Auld Acquaintance Be Forgot

By Jim Lanzalotto

I get sentimental this time of year and start thinking about how quickly the past 12 months have gone by and how much things have changed -- or how some things just remain the same.

That mindset (and a deadline from my editor) got me thinking about how the industry has changed in the 10-plus years I've been working in and around the contingent workforce space. There have been tectonic shifts in some business models, mindsets and customer relationships. Then again, there hasn't been enough impactful change to continue moving the market forward.

So, with a glint in the eye, a Sergio Leone western in mind and an adult beverage in hand, let's see how things have changed in not only the past year, but the past decade or so in the contingent workforce world.

The Good

  • Waste elimination. Many of the inefficiencies that existed for decades are now gone forever. And for the better. I don't think anyone misses things like clip boards, faxes and back-room side deals. VMS technologies have truly changed the marketplace and taken significant cost out of the process.
  • Going global. Many multinationals are there already, and the data indicate that several are about to follow. MSPs have responded, expanding and acquiring to help service customers and add new ones. So both sides are better off.
  • SOW inclusion. We all know it's about more than contractors and talent management. Now that buyers are including SOWs and independent consultants in their RFP requests, both sides get to have a better view of the total spend in play. And both buyers and MSPs benefit from the expansion.

The Bad

  • Supply chain mis-management. While contingent workforce suppliers don't necessarily deliver widgets, the ability of many to manage supply chains like, well, supply chains is readily apparent. The rampant market wastefulness that accompanies poor supply chain practices shackles everyone in the market.
  • Workforce integration. The holy grail of workforce management is the complete combination of RPO and managed staffing. But both buyers and suppliers have stubbed their toes here. The real savings and improved hiring practices both sides forecast will never materialize unless each gets its house in order and stops pointing fingers.
  • Metrics. There's still too much inconsistency and way too much measurement variability. If the sport of baseball applied the same practices to batting averages, everyone would bat over .500.

The Ugly

  • Co-employment. Too many buyers still don't fully understand co-employment and its true business impact. There's too much weight on feckless policies like term limits and too little emphasis on holistic program changes that truly mitigate risk.
  • Data. I still subscribe to the "In God we trust; all others must bring data" approach to management. But, in too many relationships, there's too much trust and not enough data. Both sides need to challenge each other and call a spade a shovel when need be.
  • IC classification. There will be more than 6,000 federal audits in the next few years. And there will be blood. Few companies are ready for the audits and even fewer are complying with the law.

Let me know if you've got more to add to the lists or if you think I've put some things in the wrong buckets.  As always, I am happy to hear from you. Suggestions that can help you and other CW managers do their job better are always welcome.

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Jim Lanzalotto runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. He can be reached at jim@scanlonlouis.com or 610.212.5411.You can also follow him at twitter.com/jimlanzalotto.

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