The time of year is at hand when we look ahead to do some prognostication over what may be in store for all things workforce related. Today we’ll take a closer look at the current state of the managed staffing landscape and offer up what 2014 will hold for the efficient and strategic management of the contingent workforce.
2013 was marked with greater consistency in demand from consumers of managed staffing programs (MSP) and vendor management systems (VMS). The acquisition of both VMS technology and the consolidation of staffing firms remain steady. The most recent VMS transaction came just last week with AMN Healthcare Inc.’s move to acquire Shiftwise (sidebar: Healthcare focused Managed Staffing Programs increased in 2013, this may be a continuing trend into ’14). While things continue to remain the same across the use and management of the contingent workforce, a new normal seems to have finally settled. What was once merely another spend category to be managed for cost efficiency has come of age in 2013 to be recognized as much more than a simple cost center that has to be continuously evaluated for efficient performance. With some exceptions the contingent workforce segment has evolved into an embedded strategic approach for many large organizations, and even mid-size companies.
This is not to suggest that the cost efficiency of managed staffing programs no longer matters, quite the contrary, cost savings are table stakes and always will be. What is different, however, is the tone or nuance of how these programs are managed, evaluated and integrated with the overall workforce plan of the organization. The increased scrutiny and visibility over the impact to the performance of the company has driven a maturation over how programs are evaluated, implemented, and directed. This maturation will continue in 2014 and are likely to drive the following trends.
Maturation of Mid Market Managed Programs: Smaller MSP programs (‘smaller mid market programs’ defined as a total contingent workforce investment from $5 million to $50 million annually) are probably ahead of the curve on overall maturation of how these managed staffing programs are being evaluated. The shift is subtle and nuance, but pronounced. The approach smaller organizations are taking is one that looks not merely at the overall cost efficiency but evaluates the impact that the program will have on their ability to source talent aggressively, improve the quality of contingent hires, minimize disruption to their operating model, and establishes an acceptable short and long term expectation for program scope. 2014 will see more adoption of this approach from the smaller consumers in the marketplace by the larger consumers.
Increased C-Level Involvement: While the trend above in small to mid-size businesses indicates a more strategic look at the contingent workforce, the decision for these companies may surprisingly not result in the management centralization of how this segment is managed. This will drive significantly more c-level and human resource leadership into the decision making process to be the catalyst to appropriately evaluate and make a decision to standardize how the company’s contingent workforce is tactically handled.
Increased Service Level Expectations: Once again cost efficiency is mere table stakes when a company like Yoh competes for MSP business. With this established, companies are insisting on much higher levels of service. From well defined qualification and on-boarding interaction to proactive reporting that uncovers trends, gaps, or opportunities, the expectation in 2014 will be that the MSP providers will raise the level of service and partnership that they are delivering. This will continue in 2014 and it is likely that new takes on the typical delivery will evolve resulting in new bundled service level packaging, such as including managed staffing services together with recruitment process outsourcing.
SOW Management Finally Gains Traction: Since the middle part of last decade there has been so much discussion around leveraging the managed staffing infrastructure to improve the control over simple statement of work processes. For the remainder of the last decade into the beginning of this one, desire for consolidated SOW management risked becoming the ‘white whale’ of contingent workforce management. The difference in 2014 is likely to be the fact that those companies that seek to manage SOW with a managed approach have learned that simplicity and narrow scope is what drives the successful adoption of a managed approach to instill a level of control over categorical SOW. Also here look for advancement in supporting technologies.
Less Emphasis on Delivery Model and Greater Emphasis on Fit: To be clear delivery models will not radically change in 2014, but the evaluation of the model will be less a conversation of hard and fast absolutes and more of an evaluation over how the talent marketplace is managed and how the overall cost to quality is delivered. Companies using a managed staffing program (whether managed on their own or with a 3rd party) will seek a method to create the appropriate talent marketplace and will demand that the MSP delivery model provides them the right level of access to the right talent community.
Online Staffing Complications: Online staffing continues to be on the rise. The promise is tempting; source talent for a fraction of what it would be sourced through a ‘brick and mortar’ staffing partner. There are plenty of pitfalls here, however. Dependency on online staffing carries with it the risk of decentralizing control over contingent workforce utilization, compliance and tax reporting challenges, and in a worst case scenario can potentially evolve to a point where it is yet another spend category to manage on another platform. The growth will not slow, but look for some pain points when organizations try to leverage online staffing providers for more than spot outsourcing or short projects.
In-sourced vs. Outsourced: The continued use of the ‘self-managed’ program is unlikely to ebb in 2014, and this is likely to translate into overall evaluation of managed staffing programs into a more simple in-source vs. out-sourced approach. Again, it should be noted that this doesn’t change overall delivery models that will be considered, but rather that the decision point is ultimately going to be focused upon matters such as ‘do we have the process capabilities to execute a program’ or ‘should we invest in the talent to do this ourselves or the partner to work closely with us to get us to where we need to be?’ (For more insight on this decision making process see: our post: Should we self manage our own staffing program? ) It is likely that larger companies may see this as a core factor to their operations and will move to in-source more frequently. Smaller first generation MSP evaluations, however, are unlikely to come to the conclusion that they should build an internal infrastructure to manage the contingent workforce program.
As is true every year it is difficult to limit this post to a finite set of trends. We would love to hear your feedback and commentary on where you think managed staffing is headed in 2014.