Reality Check: The Contingent Workforce is Here to Stay

worker

Are you an employee or a free agent? In May 2008 at ISM’s 93th Annual Conference in St. Louis, I heard Daniel Pink speak about the “Changing World of Work”. When Pink’s “Free Agent Nation” was released in 2001, there were independent free agents, especially in consulting roles, but the number in comparison to the total workforce was small. While many doubted the disruption of the contingent workforce in 2001 and even in 2008, there’s no doubt of its impact today in everything from how we travel by car to the workforce at Fortune 500 companies.

When you think about it for procurement, it makes sense that an independent agent with experience and knowledge in a category of spend can quickly assess the supply market, benchmark price and cost, develop a strategy, negotiate an agreement and then move on to the next assignment. This leaves the supplier relationship mangers to execute the contract and manage the relationship for the term of the agreement. This year, particularly, the contingent workforce has been a hot topic in procurement media and research. I recommend reading and listening to Ardent Partners research and Contingent Workforce Weekly podcasts, Art of Procurement’s podcasts on the contingent workforce and SpendMatters research and upcoming “GE Digital on the Future of Work” webinar to gain insight on where we are and where we need to be to optimize the “free agent nation.”

For CPOs, the contingent workforce will play an increasing role. While the budget for contract labor will increase, but companies will be released from the burden of taxes, healthcare and insurance costs, and other full-time employee costs. The key to success is to capture expertise in the short term, then have the contractor move on. The CPO can manage more strategic priorities with the right balance of FTEs and contingent workers.

It’s important to understand that the ways we work are constantly changing and evolving. With artificial intelligence (AI) and the internet of things (IoT), it’s apparent that some of the work humans currently do will be replaced through business system integration across the supply chain. We’ve certainly evolved from the days when Eleanor Roosevelt said “We have reached a point today where labor-saving devices are good only when they do not throw the worker out of his job.” Now the work and the labor force has changed – we can see the way forward to work more strategically and drive innovation.

I am structuring my company’s organization to reflect the value and opportunities available using contingent workers. What about you?

Was Daniel Pink right?

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