Creating a Winning Talent Strategy The Importance of Managing Your Contingent Workforce and C ti th D t B t P t d HRConnecting the Dots Between Procurement and HR

Rich Grunenwald, ,Managing Director of Experis, a ManpowerGroup Company

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There is a global talent conversation ongoing that is creating g g g gchallenges for companies…

Talent Mismatch

Talent Productivity

Talent Globalization

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World Economic Forum Survey Results 2011

Questions that >80% surveyed consider relevant / very relevant

y

How can large organizations develop innovators and

How can we ensure the f l l i

H ill d hi

innovators and entrepreneurs from within?

successful leveraging of human potential?*

How will demographic and macro-economic imbalances change the future of globalization?

How can companies and countries attract the best and b i ht t i d ?brightest minds?

Talent – Access, Attraction, Development - Tops Mindshare of

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, , p pWEF Participants

Structural changes are causing a fundamental shift g grequiring...

• The redesign of business models• The redesign of business models

• The redefinition of value propositionsThe redefinition of value propositions

• The reinvention of social systems y

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ManpowerGroup’s World of Work Trends:Indicators of the Human Age

5Source: ManpowerGroup Inc.

The Talent Mismatch Illustrated

Lack of resources creates tensioncreates tension on the high demand skills market

Demand for skill

Oversupply of low or wrongly skilled resources generates Supply of skill

under- employment and unemployment

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Source: Confronting the Talent Crunch: A Manpower White Paper

This means you need to re-examine your assumptions y yabout:

Work Models

People P ti

Talent

Practices

Sources

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World of Work Trends Driving Structural Changesg g

In an uncertain world, certain talent challenges are driving the need to re-examine workforce strategies:workforce strategies:

Work Models People Practices Talent Sources• Managing a diverse and

virtual workforce• Developing nimble and

contemporary leadership• Developing agile talent

strategies to attract selectvirtual workforce• Injecting flexibility into the

workforce mix: contingent and permanentL i t h l f

contemporary leadership• Connecting and collaborating

colleagues• Embracing transparency and

filt d i ti

strategies to attract, select, train and re-skill in new ways

• Reaching under-tapped and untapped talent pools:• Leveraging technology for

efficiency, productivity and innovation

• Developing solutions to the k t f t il

unfiltered communications• Customizing the approach to

engaging and retaining the multi-generational workforce

and untapped talent pools: Consider talent migration,women, older workers and developing younger workers

market faster, more agile, differentiated, global

• Creating frameworks to empower people to be ambassadors of the brand

• Finding the “Teachable Fit”

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Challenges in the Changing World of Work

• EVERYTHING from labor rates to capital expenditures can be arbitraged based on country/locationArbitrage can be arbitraged based on country/location

• Underway and is here to stayWar for Talent y y

• Most organizations do not manage resource fulfillment h li ti llLack of Framework holistically Lack of Framework

• Do not effectively address competition for resources Traditional Approaches y pand tomorrow’s resource channels

ppIneffective

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And without control over all of your labor sources, you are only managing one piece of the puzzle…

The Workforce of the FutureThe Workforce of the Future

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A “Mix” of Varied Labor Sources…

Contract Resources

Benefits BenefitsBenefits

Project / OutsourcedResources

Full-Time Employees

• Quick to start• Targeted duration• Acquire unique skills• Enables scalability

• Hire the experts• Faster time to market• Less Project Mgmt

required

• Knowledge retention• Continuity• Loyalty• Fixed costs

Drawbacks• Limited tenure• Knowledge leaves with

contractor

Drawbacks• Requires tight

requirements definition• Dependency on third-

Drawbacks• Difficult to address peaks and

valleys• Difficult to address new skill

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• Supply/Demand swings parties• Can be “blank check”

needs• Greater long-term investment

Creating a Winning Workforce Strategyg g gy

Business Need Skill Sets Duration & Timing Cost/Other

Full-Time • Default hire type • Common skill sets • Extended tenure (i.e., not short term

• Consider cost of hire vs. cost of contingent laborEmployees • Critical business

function

• Core competency

• Key alignment with business goals/objectives

• Freely available in market

• Professional development opportunities exist

not short term assignment)

• Sufficient lead time to recruit for resource

cost of contingent labor

• Group does not experience significantly high turn-over

goals/objectives

Contract Resources

• Non-core business functions

• Supplements business objectives

Use in high turn over

• Unique skill sets

• Scarce availability ordifficult to recruit skills in market

• Shorter duration (i.e.,less than 18 months)

• Longer duration may still qualify depending on business objective

• Consider cost of hire vs. total cost of ownership (TCO)

• Use when existing full time resources have • Use in high turn-over

groups and skills categories

j

• Limited lead time for recruitment

expertise and bandwidth to directly manage activities

Project Based • Critical AND time d d t ti it

• Market expertise i d

• Definable duration • Best value vs. lowest costjResources (SOW)

dependent activity required • Short to medium duration activities

• Time critical activities

• Consider opportunity cost or other gained efficiencies

Outsourced Resources

• Non-core business activities

• Activities where efficiencies can be

i d th h

• Ongoing business functions

• Evaluate TCO to include efficiencies gained by

t i id

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Resources (SLA) • Core activities where

business has been unable to support

gained through aggregation and/or leverage

outsourcing provider

• Consider additional value gained from outsourcer

Contingent Workforce Managementg gIncreasingly, businesses are leveraging Contingent Workforce Management (CWM) programs to gain visibility and control around contractor usage

• Usage Of VMS

contractor usage…

– Increased to just over 63% in the US in 2009

– And is projected to increase to 66% by the end of 2010, 81% by the end of 2011of 2011

• Usage of MSPs– MSP usage has continued to

increaseProjected to reach 64% by the end I d t i Skill– Projected to reach 64% by the end of 2011

– 19% of respondents indicated they were looking into implement an MSP within the next two years

Industries

Technology / Telecom 74%Pharma / Biotech/Med 60%Energy / Chemical 55%Finance / Insurance 45%

Skills

Information Technology 52%Industrial / Logistics 47%Engineering / Design 47%Office / Clerical 25%

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MSP within the next two years

Sources: SIA 2009 Staffing Industry Sourcebook;SIA “Staffing Supplier Mgmt Strategies” report (11/09)

Finance / Insurance 45%Business Services 40%Manufacturing 38%Retail/Consumer 29%

Office / Clerical 25%

And It’s Not Just to Manage Temps…% of respondents incorporating SOW into VMS/MSP

g p

• SOW Management– A significant # (81%) of CW users

Yes32%A significant # (81%) of CW users

are planning or considering to incorporate SOW into program in next two yearsForrester and Gartner estimate SOW

Don’t know6%

– Forrester and Gartner estimate SOW spend could be 10x that of traditional staffing services

Maybe, next 2 yrs

49%No13%

• Workforce Planning– Similarly, a large % (85%) are using

info from CW program in Workforce planning

Workforce Planning- % using CW info for Workforce Planning Yes38%

planning– By integrating CW into workforce

planning, the focus shifts towards demand management and sourcing strategies

Maybe, next2 yrs

Don’t know

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strategies y47%No

10%

know5%

Source: SIA “Staffing Supplier Mgmt Strategies” report (11/09)

Managed Service Programs (MSPs)Managed Service Programs (MSPs)

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Defining MSPg

Program Management• MSP takes primary responsibility for managing an

organization’s contingent workforce program

• Responsibilities of MSP typically include overall program management, tracking and reporting, vendor selection and management, order distribution, and payment management

• Majority of MSP programs provide clients with a vendor management system (VMS)

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Key DriversKey Drivers

Risk Quality

Cost Efficiency

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MSP Industry EvolutionMSP Industry Evolution

Major Milestones

Creation of a U.S. contingent program

Globalization

What’s 2004 Today

Technology Expansion

next?

Expanded Scope

1990’s 2008Integrated Resource

Fulfillment“V d N t lit ”

MANAGED SERVICE PROVIDER (MSP)Regional Global

ScopeOUTSOURCED WORKFORCE SOLUTIONS

1099 and SOW/deliverables management

“Vendor Neutrality”

Regional GlobalVaried Skill Categories All Skill CategoriesFundamental Technology Advanced VMSSelect Industries All IndustriesBasic Reporting Analytics & BI

1099 and SOW/deliverables management Inclusion of RPO or BPO Alternative contingent labor sourcing models Complete enterprise-wide workforce visibility Total cost of ownership savings

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Program Maturity Frameworkg y

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The Global LandscapeThe Global Landscape

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Going Globalg“With a few modifications to comply with local labour laws, the MSP provides similar, and sometimes superior value”

“Let’s roll-out a centralized workforce management program

“Onboarding and IC compliance have

“The vendor rationalization is very valuable, but the administrative processes are not as simple”

management program to accelerate time to hire and reduce administrative time and expense.”

compliance have never been so easy.”

“We need to operate differently to avoid double taxation of suppliers.”

“Finally a way to mitigate risk of non-compliance.”

“This doesn’t address our primary challenges at all.”

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Overview of Global Workforce Planning Considerationsg

Workforce Cost Legislation

GlobalProductivity, Participation, & Performance are rebounding and expected to increase

While emerging economies have added to some reduced average wage estimates, the cost of non-wage compensation continues to rise globally

There is an indication that contingent labor laws may become more consistent in the future

Regional

•ME shows consistent performance•LatAm demonstrates highest quality growth

•Increased Parity requirements in Europe with AWR•APAC continues to set additional burdens on contingent

•LatAm continues to evaluate less rigid legislation•Many markets with broad g

•EU and US continue to be most developed

In markets with growing

employment•LatAm has tight legislation, but often, less impact on cost

Managing disparate financial

legislation, including ME, are developing more specific laws for contingent labor

There are few regions that

Local

In markets with growing contingent workforce, standardization of supply chain process and quality is imperative to mitigate risk or

Managing disparate financial policies and processes across country borders within regions requires increased visibility into supply chain and internal process

ghave enough consistent legislation to allow for a regional approach to local workforce programs – see slide 5 for an overview of

l ti ki b

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business disruption relative rankings by country

Our Approach to Global Programs

Scaled Delivery with Global and Local Expertise

pp g

GlobalGlobal

• Global expertise• Single point of contact• Framework built on equivalent

d i d t id

RegionalRegional

N ti lN ti l

processes designed to provide visibility

• Regional management driving execution compliance andNationalNational

Local Local

execution, compliance, and innovation

• Country level management ensuring consistency in execution and

MarketMarket compliance

• Day to day management• Local market expertise

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Who Can Benefit fromWho Can Benefit from Contingent Labor Management

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Who Benefits from MSP?R

• Requisitions filled promptly• Best available talent

ProcurementCost savings, supplier consolidation,

HR • Turnover reduction

• Automated and efficient staffing processes

• Tracking capabilities to know who’s

g , pp ,rate rationalization, efficient processes, accurate consolidated billing, performance metrics, tracking and reporting capabilities, worldwide clients

on board and where• Satisfied end users• Smooth transition to new process

• Security• Support• Implementation requirements

Integration capabilitiesIT

Functional Users• Productivity

E f

• Reduced co-employment and liability risk

• Risk management controlsegal

• Integration capabilities

• Ease of use • Maintaining necessary supplier

relationships• Reasonable cost for talent

• Risk management controls• Onboarding/offboarding

management• Standard Ts & Cs• Process controlsR

isk/

Le

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• Clear responsibilitiesR

Key Takeawaysy y

• The talent mismatch gap is widening.D i ith l i t ti i th f t• Doing more with less is not an option in the future.

• The hardest jobs to fill are vital to your success.• A workforce strategy is key.

Is Your Organization Ready?Ready?

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