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What’s the Right Model for your Contingent Workforce?
Tara Knobel

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Introduction
Tara Knobel Regional Director – Contingent Workforce Solutions
13 years experience in the talent acquisition sector
Background in resourcing and procurement
Designed, implemented and managed complex contingent workforce programmes for significant AMS customers

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Introducing AMS
Alexander Mann Solutions (AMS)
Founded as a pure-play RPO & MSP organisation in 1996
Over 2,300 RPO & MSP specialist staff
Deliver into 61 countries
Recognised as the Global Market Leader
Contingent Workforce Solutions
24 programmes live
Over AUD$1.1 billion of client spend under management
Manage over 8,500 unique contingent workers on any given day
Process 336,000 timesheets a year
Technology independent, offering our clients choice and flexibility

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What Contingent Workforce Models Exist Today?

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Contingent Workforce Alphabet Soup
Are you ready to enter the world of contingent workforce jargon and acronyms?

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Primary Vendor Models
Managed Service Provider (MSP)
Preferred Supplier Model
Contractor Management Outsourcing (CMO)
A company that takes on primary responsibility for managing an organisation’s contingent workforce programme
Typically independent of a staffing supplier
Typical responsibilities of an MSP include overall programme management, reporting and tracking, supplier selection and management, order distribution, and consolidated billing across programme suppliers
Staffing suppliers provide a client with temporary and contract staffing services
Typically managed via procurement with input from HR and business on supplier selection
Hiring managers having decentralised access to suppliers to fill vacancies
A vendor who manages the compliant contractual engagement of a contingent worker, payrolls them and provides ongoing management of the contingent worker through their assignment
Independent of staffing suppliers, they do not recruit contingent workers
Typical responsibilities of a Contractor Management / Payroll Vendor include legal and compliant engagement, timesheeting & contingent worker payments, payment of statutory charges & insurances, and contractor care & management

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Integrated RPO
Inhouse + Preferred Suppliers
Alternative Models
RPO + CMO
Inhouse + CMO

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Sourcing Models
Vendor Neutral
Master Supplier
Hybrid
Sourcing model where the MSP handles its tasks (e.g., order distribution or candidate selection) based on client-defined policies that mandate that staffing suppliers be
Given an equal opportunity to fill each order, and/or
Selected for each order based on the same criteria.
Under a vendor-neutral model, the MSP cannot, push orders to itself or any other staffing vendor.
A MSP supplier that takes responsibility for providing a client with temporary and contract staffing services
In a Master Vendor Programme, all orders will usually go first to the master vendor to either be filled by the master vendor or distributed to the secondary tier of suppliers
Sourcing Model where a blend of different sourcing model attributes are used to manage a contingent workforce programme
Typically includes elements of vendor neutral and master supplier programmes
For example, a single provider may act as the master supplier for light industrial while IT positions are sourced on a vendor neutral basis
Direct to market sourcing may be used in conjunction with other agreed sourcing channels

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Technology Solutions
There is no single technology solution that can manage your entire model

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What is the market doing?
Staffing Industry Analysts: 2013 VMS and MSP Supplier Landscape

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And in the Australian market …
Integrated RPO / MSP + CMO
MSP + CMO
Inhouse + CMO
MSP (Master Supplier)
MSP (Vendor Neutral)
Inhouse + Agencies

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Best-in-class organisations rely on third party solutions to improve efficiencies, performance and value for their management of contract talent. These top performing organisations are 55% more likely than all other companies to leverage MSP and VMS solutions to enhance their programs and outsource key components and processes
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Aberdeen Group, April 2012

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What’s the Right Model for your Organisation?

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There is no “right model” .
The model that is right for your organisation may be very different to the model that is right for the organisation sitting next to you
Will depend on a number of factors including:
Business Drivers
Procurement Strategy
Size of Contingent Workforce
Attitude to Outsourcing
Existing resources and infrastructure
Risk profile

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A “Model” is just a solution … so first you need to define the issue
Before thinking about what model you want and what vendors you should talk to – get clear on what you want to achieve from a contingent workforce solution
What problems are you trying to address?
What functions and activities do you need to perform?
What outcomes are you trying to achieve? Cost, Quality, Time?

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Then ask the question “Who should do what”
Do It Yourself
Outsource
Hybrid
Technology

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Functional Model

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Contingent Workforce Activities
Programme Management
Contractor Sourcing
Contractor Engagement
Technology
Vacancy Request & Authorisation
Approvals
Facilitate SOW Requests
Rate Card Management
Programme Reporting
Demand forecasting
Helpdesk
Sourcing
Screening and Selection
Pre-employment Screening
Offers and Rejections
Contract Generation
Visa sponsorship
On-boarding
Induction
Legal and Taxation Compliance
Provision of technology to manage workers
Technology helpdesk
VMS Implementation
VMS Administration
VMS Management
Supplier Management
Compliance
Contractor Management
Payroll and Invoicing
Vendor Selection
Contract Management
Supplier Performance Management
Policy Management
Business education on process / policy
Risk Management
OH&S Management
Risk Management
Contractor Management and Care
Extension / Termination Management
Offboarding / Exit Management
Timesheeting
Worker Payrolling / Invoicing
Consolidated Billing

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Example of Scoping your Model
Offers and Rejections
MSP / Inhouse Team
Line Manager
HR
Sourcing Supplier
VMS
Payroll Partner / CMO
Manage offer process
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Approve offer
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Raise Purchase Order
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Approve Purchase Order
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Generate Work Order / Assignment Schedule
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Reject unsuccessful candidates
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Generate contract with Contingent Worker
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Benefits and Disadvantages
Managed Service Provider (MSP)
Preferred Supplier Model
Contractor Management Outsourcing (CMO)
Benefits
•Overall programme management
•Single source of truth
•Reduced vendor management burden
•Flexible and scalable
Benefits
•Access to niche / specialist recruitment capability
•Flexible and scalable
•Competitive vendor neutral
Benefits
•Compliant payrolling and engagement
•Risk management / transfer of liabilities
Disadvantages
•Funding required
•Some vendors resent it
•Perceived loss of control
Disadvantages
•Multiple vendors to manage
•Multiple invoices to process & pay
•Inconsistent compliance
Disadvantages
•No sourcing capability
•Low VMS deployment capability
•No overall program management
Inhouse Model
RPO / CMO Model
Integrated RPO / MSP
Benefits
•Complete Control
Benefits
•Direct to market sourcing capability
•Best in class vendors
Benefits
•Total workforce management
•Single point of contact for business
•Direct to market sourcing
Disadvantages
•May not flex and scale with volume
•Internal headcount / cost
•Low external thinking
•Low technology (VMS) capability
Disadvantages
•Need vendors to work in partnership
•Processing may not be straight through
Disadvantages
•Potential risk of ‘eggs all in one basket’
•Need to find vendor who has complete capability

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The Steps to Success
Step 1
Identify business drivers
Step 2
Be clear about what you want to achieve
Step 3
Design a relevant model, fit for needs
Step 4
Ensure model partners operate as an integrated team
Step 5
Measure, review and optimise

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Thank You
Confidential
For further details please contact:
www.alexandermannsolutions.com
Tara Knobel
+61 (0)438 479 469
Tara.Knobel@alexmann.com