There are Consequences to Choosing the Wrong Workforce Sourcing Channels
New ways of getting work done seem to arrive every year. Organizations have increasingly flexible and convenient ways of finding the workforce talent they need to achieve business goals. Understanding which talent channels to use for a specific task or project can give even the most sophisticated workforce buyer pause. And the consequences for choosing the wrong one can range from inflated costs to serious compliance issues. Top organizations alleviate uncertainty in this often-confusing area by defining rules and processes for engaging workers through popular talent channels.
Reveal a Work Engagement’s Proper Classification
Sourcing channel optimization initiatives uncover each engagement’s details and precisely identify their true nature: time-and-material, project-based, freelance, outsourced service, etc. Hiring managers may favor using statement of work channels to source contingent workers out of speed or convenience. They may not know the risks associated with bypassing staff augmentation processes. Suppliers for these workers frequently operate under statements of work that lack formal performance requirements or project deliverables. And the supplier’s workers likely don’t comply with important contingent workforce policies.
One organization realized it faced such a situation with more than 600 workforce-related statements of work in North America. It embarked on sourcing channel optimization initiative led by TAPFIN, its managed service provider (MSP). Contract analysts identified 950 contingent workers mistakenly on assignment as statement of work resources. These engagements did not operate under rate cards, which often led to the client paying more for workers than if they sourced them through the MSP program. By transferring them to that program, the client stood to save 10% to 13% on its annual workforce spend. The client also gained a better understanding of how legacy policies influenced manager behavior, rate structures, and buying patterns.
Hands-on change management minimizes inconvenience to hiring managers, suppliers, and their workers, who may be reluctant to cooperate with the initiative out of concern for their team’s productivity. Those leading the initiative should foster trust and participation among all parties, helping them realize its benefits at every stage. Doing so helps everyone understand and navigate the nuances of each engagement classification.
Take the Guesswork Out of Talent Sourcing
Transferring misclassified workers to the correct sourcing channels serves as a good starting point for organizations looking to create a more valuable workforce. Deploying a front-end sourcing decision mechanism helps organizations choose the appropriate sourcing strategy and contracting mechanism for new engagements.
Using the proper channel for each work engagement increases contractual and regulatory compliance, workforce visibility, performance accountability, and cost efficiency. It also plays a central role in a strategic workforce planning framework for ongoing risk mitigation, policy adjustment, and process improvement. Consider this strategic mindset and you’ll prepare your organization to navigate the ongoing complexities of the modern workforce, avoiding common pitfalls with confidence, effectiveness, and efficiency.