66
Projected age of retirement
for current workers.


"facticious"
Data that is false or fabricated.

gold
The best data scientists turn
distilled information into pure gold.

butter
Too much churn and
companies lose the cream.

guatemala
Guatemala has the largest CW
compared to population in Americas.

1 in 3
# of working Americans in
the contingent workforce.


"jobsolete"
As some jobs become out of date,
others emerge.

rope
In a conformity string, we call attributes
that impact cost and availability of
qualified job candidates "pieces of work".

2%
Projected growth office/clerical
staffing 2013.

44%
Companies implementing proper
measures during offboarding.

singapore
Singapore was world's top CW
productivity market 2014.

male
Data Scientist: the most wanted
job by employers on LinkedIn
in 2014.

belgium
Belgium has the highest tax burden in EU.

247:10k
Ratio of robots to employees in Korea,
highest level in the world.

36%
Employers who find paying
freelancers cumbersome.

stars
The big star in our universe is Data Centauri.

40
% of American workforce projected
to be freelance by 2020.

crystalball
Predictive analysis is only as
insightful as the analysts.

sugar2
Data should never be sugar coded.

bow
A good strategy stretches without
changing its basic shape.

19.6wks
Average length of unemployment
of managerial candidates.

17m
# of workers with tenuous
ties to employers.

37
% of senior HR officers identifying
talent management as top HR issue.

questions


To find answers, we formulate questions.
Then question the questions.

< 20
% of private sector workers receiving
employer sponsored health insurance
by 2025.

16%
CW population at average
large company.

france
France has the highest
tax burden in EMEA.

70
% of Fortune 100 who’ve
implemented a VMS.

-1.5m
Shortage of US managers able to
analyze big data and make decisions
based on findings.

£2.6b
Amount NHS spends on
temp staffing.

shamrock
Independent contractors can
be reclassified by Irish courts.

CWS 3.0: October 1, 2014

By Sarah Koshiol

Based on recent studies, the top priority going forward for 80 percent of companies currently with an established VMS/MSP contingent workforce program, is to expand their program to include services spend.

A separate survey from Staffing Industry Analysts – the publisher of this newsletter — indicated 75 percent of those US participants include or are planning to include services spend in their programs. The results outside the US were a bit lower, at 48 percent.

What is even more clear is the most common expansion strategy within the services spend vertical is by spend category. Like the evolution of temporary or staff augmentation-based work, services spend too has evolved into more defined categories. Key categories including: process outsourcing to include application services, infrastructure management and BPO; consulting to include IT and management; professional services to include tax, audit and legal, as well as various specialized services projects. Within a contingent labor solution, the process outsourcing categories, followed by consulting is the most common of all SOW-based services spend under management, and also has the highest levels of supplier and buyer adoption.

As shown in the following graphic, process outsourcing to include application services and infrastructure management is typically the initial category of SOW-based work that is implemented within a contingent workforce solution, followed by consulting-based SOW services. (Note, this expansion strategy is under the assumption that staff augmentation spend under management is in a mature state.)

Click image to enlarge.

SOWSpendImg1

SOW Contract and Service Spend

Service spend, is typically governed by a statement-of-work (SOW) contract and is based on specific project deliverables to be supplied under the contract, or outsourcing services, as part of a project timeline. In the case of outsourced facilities support management, the timeline can be indefinite. SOW agreements are usually billed based on a fixed price deliverable or specific milestones. Like typical staff augmentation arrangements, they may also be billed based on time, including arrangements where there is time-based billing that is capped at some “not to exceed” level.

While differences in contractual form exist, the similarities between staff augmentation and services spend categories are far more significant. Companies are realizing the benefit of these similarities by including services spend in their contingent workforce programs.

An equally important driver of service spend adoption is the market evolution in funding models. Initially, services spend was included in programs almost entirely using a buyer-funded model (i.e. no cost to the supplier). More recently, suppliers have accepted the premise that they must pay to play, and some 60 percent of programs with services spend are now supplier-funded.

This growth and evolution of services spend categories brings the increased desire for organizations to focus on effective ways to categorize, classify and manage all contingent workforce spend. This allows for strategies to effectively manage the demands of the business, but also the value of managing all contingent workers in a consistent manner.

Why Manage Services Spend?
There are a number of reasons to manage services spend in an end-to-end contingent labor workforce solution. First and foremost, creating and leveraging visibility into an expanded scope of spend, which allows for additional analysis and leads to effective strategies and actions, all creating increased value output. Additional reasons include:

  • Better risk mitigation 
  • Ability to make effective demand management decisions 
  • Additional strategies across all contingent labor spend (cost savings, reporting, supplier management)
  • Additional controls, both fiscally at the budget level and operationally
  • Ability to comply with organizational policies and marketplace regulations
  • Ability to manage to supplier performance and leveraging top performing suppliers within specific categories
  • Ability to optimize entire supplier chain by category
  • Ability to increase quality work, from suppliers, resources and deliverables
  • Realize additional savings
  • Improved cycle times (on time within budget)
  • Enhanced reporting and analytics

Due to the nature of work being performed and the level of engagement of every project, the strategy and support model and the value add for both suppliers and buyers will vary by category. 

Approach to Capturing Services Spend Under Management
The recommended discovery, design and delivery steps to categorizing, classifying and capturing SOW services spend includes:

Click image to enlarge.

SOWSpendImg2

There are critical success factors that are key to successfully defining and categorizing SOW services spend. Key factors including:

  • Level of visibility into current spend
  • An effective and agreed upon project plan
  • Executive-level and steering committee support 
  • Applicable stakeholder/buyer engagement
  • Effective communication and change management plan
  • Data conversion plan

View on the Staffing Industry Analysts website