CWS 3.0: June 5, 2013

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How Are Contingent Managers Evaluated?

How do you evaluate a CW manager? You measure the success of the program.

Research indicates that when it comes to either measuring the success of the contingent workforce program or when evaluating the CW manager, the development of the program and cost savings achieved through it are generally weighted equally. According to Staffing Industry Analysts’ Contingent Buyer Survey, roughly equal proportions (38 percent) said savings and program development were most important for such an evaluation. An additional 24 percent identified internal customer satisfaction as a consideration. Almost half of buyers reported not having a hard savings target, which is typically defined as a percent of a budget or past spend. Among the remainder, the median hard savings target was 8 percent.

There are varying opinions on this topic and the answer is really defined by the internal company culture and what is most important to the company.

“At the end of the day, the No. 1 thing for me is the internal stakeholder satisfaction,” said Greg Muccio, manager of Southwest Airlines’ people department. “What we are trying to see is that the program is bringing overall value to the organization. It’s important to meet with the stakeholders, find out what’s important for them and to meet and/or exceed those expectations.”

Muccio says he prefers to look at the more than just bringing the prices down. “Is the program more efficient? Is it easy to onboard and offboard contingent workforce? Have you reduced risk and improved the supplier relationship?”

According to Elmer Westra, contingent workforce and talent acquisition manager at Cricket Communications, the criteria is dependent on the maturity level of the contingent workforce program. “In a new program that is just getting built, you are not necessarily going to be looking at cost savings right off the bat. You will be looking at efficiencies, the adoption of the program and the procedure. If it is a more mature program, then those CW managers will be evaluated more on cost savings metrics.”

The criteria may also change based on where the CW program is housed — procurement or the human resources department, says Bryan Peña, vice president, contingent workforce strategies and research at Staffing Industry Analysts.

“Savings for most procurement professionals is at the most 35 percent of their evaluation. Other factors could be managing people, personal growth, certain other milestones that they may have,” Peña explains. “For HR, it’s more difficult to evaluate because many times the contingent workforce is part of a larger suite of services. But surprisingly, sometimes cost savings applies to them as well, but not as great a number. They probably have criteria that more align to an service-level agreement or contract.” It really boils down to the goals and objectives of a particular department and how they flow down to impact individual goals.

In general, factors affecting the evaluation of individual performance of CW managers vary significantly by industry, too. Managers in the pharma/biotech/medical equipment, business services and energy/chemical industries, as well as those purchasing engineering/design skills, were most likely to identify savings as most important in measuring individual performance.

Large buyers also tend to be more focused on savings generated. On the other hand, managers at companies with fewer than 15,000 employees, as well as those in the manufacturing, restaurant/hospitality/retail and finance/insurance industries, were more likely to say that internal customer satisfaction was most important when measuring individual performance.

Buyers in the packaging/transport and restaurant/ hospitality/retail industries were more likely to say that program development was most important.

Hard savings targets are most common among large buyers, those in the energy/chemical, business services and pharma/biotech/medical equipment industries and those in purchasing engineering/design and industrial/logistics/transportation skills.

In addition, respondents who are in management positions are more likely to have hard savings targets. Respondents in procurement are more likely to have a hard savings target than buyers in general management or HR. Those whose programs use a VMS have a 16 percent greater likelihood of using a hard savings target.

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Brian McGuire 06/06/2013 10:35 am

The premise stated here, "Research indicates that when it comes to either measuring the success of the contingent workforce program or when evaluating the CW manager, the development of the program and cost savings achieved through it are generally weighted equally." What exactly is meant by "the development of the program"? This seems vague and obfuscating. Also, what research is indicating this?


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