I interviewed Bronwen Hann who discussed The Rise of the Contingent and Contract Work Force in Supply Chain.
It’s good to speak with you again, Bronwen. I’m looking forward today to hearing your views on the rise of the contingent and contract workforce in supply chain.
Yes, nice to speak to you again, Dustin. For those listeners who didn’t hear our previous interview, I’m a recruiter with more than 30 years’ experience in staffing. I’m the president of Argentus Supply Chain Recruiting, a complete recruitment firm that’s been servicing the very specifics supply chain’s talent factors exclusively for 14 years.
The last time we spoke, I was talking to you about the supply chain talent deficit. In that discussion, just as an overview, I talked about how, in Canada, for example, the Canadian Supply Chain Sector Council estimates that supply chain will have approximately 80,000 vacant jobs a year going forward. This is not something that is strictly a Canadian problem; it’s something that’s happening on a global basis.
The reason why that’s something of a concern is that, on the senior end, baby boomers are now starting to retire. In the next 7 to 10 years, baby boomers are going to be starting to retire en masse, and there’s a lot of skill leaving the market. There aren’t enough people at the young end learning about what supply chain is and moving into supply chain as a career choice. That’s what I was talking mainly about last time we spoke. Now, partially in response to this, companies have more and more been turning to a contingent rather than a permanent-hiring model or having a contingent-hiring model to augment their permanent-hiring model to deal with a real shortage of really good staff and for this talent shortage contingence.
Contingent staffing has been the norm in IT and engineering for 20 years. It’s very common for companies to actually never hire on a permanent basis for IT and engineering and only bring in staff on a contingent basis. What I’ve seen in the past 36 to 48 months is that companies are now really looking at other ways of how they can utilize contingent staffing for other areas, especially which are in very high demand. They’re now hiring individuals on contract for supply chain functions like demand and supply planning, management, very senior-level procurement, and strategic sourcing, all the way up to very strategic-level positions. These positions range anywhere from 6 all the way up to 18 months.
The concept of why buy when you can rent for peak workloads is something of real interest to organizations. First of all, it helps them to deal with the talent shortage, but it also helps them to costs under control. Say a company has a large number of RSP responses to go through that they’re behind done; it’s perfect for a highly skilled contingent worker to come in rather than bringing in another permanent person who they’re not going to need on a long-term basis. It’s perfect for those kinds of time-sensitive situations and assignments. They bring them in, they have them do the job for six months, and then they have them leave.
The ability to get immediate cost savings from these efficiencies have been in areas of supply chain leaders who have been able to uncover and, these days, work harder to get your top line numbers down to the bottom line. It’s an excellent way to keep really nimble in the middle and get those dollars right down to the bottom line. They’re using these staff for business cycles, they’re using them to help scale companies without taking away a very delicate growth stage. It’s an excellent way of scaling a company without taking on permanent cost and that’s very critical.
They’re getting the expertise. Another example is that contingent workers can then act as business transformation. They can come in and they can deal with some very delicate situations where change management needs to happen within an organization where they’re getting a lot of push-back from individuals who are in the organization and don’t want change. By bringing in an outside person, they can get dealt with because they’re actually not a full-time person and the process moves faster.
They can cover things like leads; they can deal with many different types of situations, many sensitive projects; find out new business-development ideas. It actually works out very, very well for companies to be able to augment both the permanent with the contract and keep it that way on a permanent basis. Is that clear?
Are there any recommendations you have on how to work with the contingent workforce in supply chain?
The great thing for companies is that they get to develop client and consultant relationships rather than employee-employer relationship. Contingent workers can incorporate and earn better money and better tax advantages, so companies are taking advantage of the people who are getting better work-life balance. While there are always going to be many people who want to be in permanent positions, there are more and more people who are attracted by contract work.
You’re always going to get people who want to be in permanent roles, but there are more people who want to be in these types of positions. The advantage for these individuals is that they get to work with so many different varieties of companies and projects that they often get to accelerate their careers much faster than they would otherwise be able to do. I’ve had contractors who’ve worked for me who have come to me as really good intermediate people and who’ve been doing contract work for three, four years and are now probably about three or four positions ahead of where they would’ve been had they stayed in a permanent position.
At Argentus, we’re able to offer companies the ability to payroll contingent staffers on our payroll, which helps to protect them. They have the ability to save money, bring the person on very quickly, and be able to let them go very quickly, which means that it’s a very expandable and nimble workforce that allows it to work with their needs as those needs change.
These days, needs change and you have to be very competitive in order to really compete well in the global marketplace.
Often, companies do mis-classify workers and try to bring workers in on their own as contractors. You would never get companies doing that for IT or for engineering. What my recommendation is that I think that companies should be really, really utilizing contract workers, contingent interim workers for supply chain and procurement, but they shouldn’t be bringing these people in on their own because they’re putting themselves in a vulnerable position. They should be always bringing them in through a third party. There are specialty search firms such as Argentus who can help them very quickly come up with a strategy.
I think it’s a great option available for companies who have hiring freezes, for example, and there are many ways that we can consult with clients to give them many more options than they’re used to. That’s what I have to say today.
Thanks, Bronwen, for sharing this important trend: the rise of the contingent contract workforce.
Thank you. I’m sure we’ll chat again.
About Bronwen Hann
Purveyor of Hand Crafted Talent Search in Supply Chain & Procurement