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How to achieve effective cost management of temporary labour

Posted on 21/05/2014 by Mark Coyle in Category Managed Services
​​At the recent PASA Contract Labour & Recruitment Category Intelligence Exchange in Melbourne, I hosted a round table discussion on the challenges that contractor and temporary labour (or on-hire) management presents to both businesses and recruitment suppliers. All attendees had experience of managing temporary labour in their business, many of whom worked for large and highly complex businesses, such as a large population of hiring managers, a number of different locations and a high variety of temporary labour roles.

We discussed 3 core topics: 
  1. ​Effective cost management
  2. Compliance and regulatory control
  3. Management information and measurement.
These topics are the subject of my next three blogs, starting today with effective cost management.  

Effective Cost Management

There was considerable discussion on the best ways to get effective cost management of temporary workers. It was agreed that the essential ingredients to provide cost management were visibility of recruitment spend, an accurate understanding of usage through the application of technology and close collaboration.
 
With technology you can gain visibility and effective cost management through:
  • ​a consistent and solid platform of structured ordering (or requisition) and approval processes. A clear and accurate organisational structure of hiring managers, vacancy authorisers as well as timesheets approvers
  • robust processes mapped and developed with your business in mind and that complement your internal organisational structures and hierarchies
  • accurate reporting of actions and transactions, such as order justification and approved timesheet, to provide a clear audit trail
  • seamless vending of temporary staff requirements to recruitment agencies
  • reporting and intelligence to inform better decision making.
As businesses never stand still, it was also agreed that any technology will need to adapt to your varying temporary recruitment requirements over time.
 
The procurement professionals at the event cited difficulty measuring the quality of hire, tenure management, tracing the financial impact of a poor hire and visibility over an increasingly mobile workforce as challenges to effective cost management. Technology is essential to provide the intelligence to support better decision making around cost management. 
 
With technology as an enabler, effective cost management is achievable by procurement engaging all key stakeholders within your business as early as possible. Engaging with human resources, operational business leaders, hiring managers as well your finance department to identify the best ways to determine effective cost management, will ultimately drive the success of any contingent workforce management project. With collaboration, effective cost management becomes easier as well as greater conformity to new systems and processes, which will prevent rogue or off-contract spend.
 
It is without question that effective cost management of contractor and temporary (or on-hire) labour remains a key priority for procurement professionals. To achieve this requires complete visibility of recruitment spend, usage and process. From the feedback at the event, many businesses don’t yet have the complete visibility of spend and usage they desire to achieve effective cost management. The larger and the more complex the business, the harder this can be to achieve, which is why procuring a Managed Services Provider (MSP) is essential. This brings the procurement and recruitment expertise to aid greater collaboration, plus the Vendor Management System (VMS) technology required to provide this complete visibility and enable effective cost management.
 
We’ve scratched the surface of a number of different subjects in this blog so I hope it is of use to you but if you’d like more information on any aspect please don’t hesitate to contact me via e-mail - mark.coyle@comensura.com.au.​