We’re living in the age of Big Data. For several years, strategic analytics and data have been a recurring theme in HR and Talent Acquisition conferences. Why? Because today’s business decisions require a basis in quantitative data, not qualitative or subjective feelings. The Bureau of Labor Statistics estimates that employers across the nation will increase their use of contingent labor by 20% by the year 2020. This segment of the workforce will include approximately 40.4% of the total workforce. That includes contingent workers, freelancers, 1099 consultants and statement of work (SOW) workers. How will you engage and manage contingent labor without quantitative data?
Using Strategic Analytics to Improve Contingent Labor Programs
Employers using contingent labor are faced with a myriad of complexities. This often presents itself in a lack of transparency across the organization, which makes budgeting and engagement difficult. Contingent labor programs with low transparency often realize their contingent labor programs are inefficient and reactive in nature. Using strategic analytics, employers will be able to create more efficient and proactive programs. Consider the following ways in which strategic analytics can improve your contingent labor program:
- Cost reduction. Strategic analytics can be very useful to reducing program spend. Tools such as VMS technology offer increased transparency into actual contingent labor spend- how many workers are being engaged and at what cost. Within the VMS technology, suppliers are all offered the ability to submit candidates in a competitive environment. This reduces the likelihood that any one supplier will offer a candidate at an exorbitant rate. When this is combined with market rate intelligence from a managed services program, employers can further determine which candidates are at the higher end of the market rate for qualified candidates. The application of strategic analytics becomes a driver for budget reduction and proactive program planning. When SOW programs are also included in the VMS technology or in a managed services program, cost reduction is further enhanced.
- Provide performance feedback. When engaging contingent labor, it’s important to have quantitative data on which staffing suppliers are performing well versus those that aren’t. If positions are sitting open for too long, it may be time to bring in new suppliers. To make this business decision, it’s important to have the strategic analytics regarding performance data. Suppliers performing the best may be restructured into a higher tier of the program, relied upon for additional SOW programs, or included in more specialty hiring. Those suppliers that aren’t performing well can also be identified for exclusion from the program. Absent strategic analytics, hiring managers may believe that a supplier is performing better or providing higher quality of candidates than the data suggests.
- Increase efficiency. In many contingent labor programs, processes and systems are simply inefficient. Management of these programs is often delegated to hiring managers, sometimes requiring additional staff to oversee invoicing and payment. Using strategic analytics, employers may find this increased cost or lack of productivity in their hiring managers is far too high. The increased transparency into processes and systems can increase efficiency, contributing to cost reduction and alignment with strategic vision and goals.
- Predict seasonal staffing requirements. Many employers, such as healthcare and retail organizations rely upon seasonal staffing to meet increased demand. In many cases, such as flu season in healthcare, it can be difficult to anticipate how many additional contingent workers will be necessary to meet increased demand. Using strategic analytics, employers are able to track historical engagement and better predict how many contingent workers they’ll need to meet demand. This allows employers to be proactive, asking for additional contingent workers in advance, avoiding paying crisis rates. This can contribute significantly to overall cost reduction goals and project completion.
- Improve business decisions. According to the Harvard Business Review, employers using strategic analytics are 5% more productive and 6% more profitable because of their use in business decisions. With quantifiable data, decisions are more informed and therefore in better alignment with an employers’ strategic vision and goals.
It’s clear that strategic analytics are incredibly useful to employers using contingent labor. The use of Big Data can drive cost reduction, efficiency, and enhance business decisions overall.Business & Finance Articles on Business 2 Community