Five ways procurement can slash contingent talent costs
In procurement, we’re all about the “four Cs” — Cost savings, Consolidation opportunities, Compliance with procedures, and Control over tech creep and rogue spend. However, we may overlook one of the most significant expenses where the four Cs can be optimised: people.
Efficiently managing a global contingent workforce is a critical piece of the operational puzzle. Unfortunately, it's also where rogue spend can go unnoticed. Some studies estimate that up to 60% of contract labour costs go unaccounted for. How can procurement drive operational efficiencies in this area?
Here we’ll explore five strategies that procurement professionals can deploy to slash talent costs, reduce administrative burden, and streamline contingent workforce programs companywide.
Automate onboarding
Streamlining the talent onboarding process is crucial for reducing costs and saving valuable time. By automating onboarding procedures, like background checks and document collection, procurement teams can expedite the hiring process by reducing time-to-hire, alleviating administrative burdens, and avoiding compliance risks.
Take, for example, Ferguson, the largest distributor of plumbing supplies and fabrication products in the US. Ferguson leverages onboarding workflows to run automatic background checks on every single contractor that enters someone's home — thousands of contractors in all 50 states. By automating this critical step, Ferguson ensures compliance while saving time and resources.
Whether sourcing a bench of potential talent for future needs or enhancing contractor compliance, teams can automate this process and eliminate thousands of manual emails.
Reduce rogue talent spend
Maverick spend, where hiring managers engage talent outside the agreed-upon budget or company procedures, can significantly impact an organisation's bottom line.
To combat rogue spend, procurement teams should provide cross-team visibility into freelancer spend and how projects are tracking toward the budget. FloSports for instance, implemented a robust, integrated platform to manage and pay over 20,000 freelancers. This centralised approach not only enhances transparency but also eliminates unnecessary costs.
“Over the last five years, we’ve probably worked with anywhere between 20,000 to 30,000 contractors,” noted Cyon Williams, FloSports’ Senior Director of Operations. “We had probably two thousand W9s in emails that we had to shuffle to accounting. Now it’s all in one place, with independent work contracts.”
Centralise everything in one place
Technical debt, the accumulation of multiple software tools, can hinder efficiency and blow out costs. Procurement teams can avoid this by centralizing all talent operations in one platform.
T&T Creative Group, for example, streamlined their workforce operations with a dynamic, centralised contractor management database. This eliminated the need for manual upkeep of messy spreadsheets and reduced switching costs (and actual costs) associated with multiple tools.
With a centralised end-to-end FMS (freelancer management system) for example, you’ll combine a searchable talent rolodex with task and project management, contracts lifecycle management (CLM), streamlined jobs/requisitions/bids, improved compliance, efficient invoicing and payments — in one single place.
Standardise pay cycles
Standardising pay cycles ensures consistency, reduces errors, and improves relationships with vendors and global contractors. Many companies find themselves spending several days each month simply paying their vendors. With a global payments processing platform, teams can reduce that administrative work to under an hour.
Just imagine… thousands of contractors all on different pay schedules and terms. Some are 1099, others W-2. Your company engages in a mix of longer-term ongoing engagements and one-off freelance specialists. Juggling it all turns into a mess, without standardized pay cycles.
Vested, an integrated communications agency in the financial space leverages a centralized freelancer payroll platform to gain deeper insight into their talent spend and ensures fast, reliable global payments.
By spearheading this practice, procurement teams can effectively minimise payment delays, strengthen partnerships, and improve overall efficiency in their organisations.
Streamline compliance classification
International hiring compliance can be a nightmare. Procurement, Finance and Legal teams must navigate complex regulations and labour laws to avoid fines.
Any business hiring in the UK, for example, should understand the important legal distinction between who classifies as an independent contractor and who can be hired as an employee under IR35 law, which puts the classification responsibility on the hiring company. Penalties may be issued to businesses that misclassify employees as contractors.
By partnering with an AOR or EOR service and implementing a worker classification workflow, organizations can ensure compliance at scale — minimising the risk of misclassifying workers and avoiding costly legal repercussions.
Let the automated system work on your behalf, and classify your talent correctly each time, regardless of what country they’re based in.
Start slashing costs
By implementing these five strategies, procurement teams can effectively slash contingent talent costs and reduce administrative burdens across the organisation. Automating onboarding, facilitating cross-team spend visibility, centralising tools, standardising pay cycles, and streamlining compliance classification empower teams to drive efficiencies in new ways.
Ready to streamline your contingent workforce? Explore Worksuite’s all-in-one platform today.
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Disclosure: This article is an advertorial and monetary payment was received from Worksuite. It has gone through editorial control and passed the assessment for being informative.
