PeopleFluent Moving Your Contingent Workforce Program from Tactical to Strategic Presented by John Moore, CCWP John.moore@peoplefluent.com www.peoplefluent.com

About PeopleFluent Leader Human Capital Management In over 5,200 organizations 214 countries and territories 80% of the Fortune 100 170 VMS customers $7B managed spend

Agenda CW program maturity Diagnosing where you are Strategies to address issues Building a program roadmap Identifying cost savings

CW Program Maturity Ad hoc Tactical Managed Strategic Manual No process No SLAs Too many suppliers Not enough suppliers Not repeatable Tactical Automated Transactional Process Focus on efficiency Supplier rationalization Focus on cost Focus on hourly workers Managed Integrated High use of metrics Focus on compliance Focus on quality Suppliers are rotated Program SLAs Services Procurement* Strategic Embedded Business Focus Enterprise SLAs Analytics Total Visibility Total Workforce Common Characteristics – Tactical – Managed- integrated with other system Strategic- contributes to business decisions, includes all worker types. Most straddle between Tactical and Managed. QUALITY – COST SAVINGS – EFFICIENCY – COMPLIANCE

CW Program Maturity Paths Strategic WORKFORCE MANAGEMENT EXPANSION SOW Managed INTEGRATION Tactical VMS IMPLEMENTATION Ad hoc TIME

CW Program Management Skillset Technology Process Finance Staffing industry Market prices Procurement Contracts Excellent people skills

Diagnosing Your Program Identify the issues You might already know some of them Survey Executives Hiring managers Suppliers Functional areas QUALITY – COST SAVINGS – EFFICIENCY – COMPLIANCE

Diagnosing Your Program First, look outside of the technology Organizational structure Lack of support Executives Business managers Hiring managers Functional areas Entrenched suppliers QUALITY – COST SAVINGS – EFFICIENCY – COMPLIANCE

Diagnosing Your Program Create an Issue Log Issue Cause Possible Solutions Candidate Quality Suppliers Scorecards Rationalization Non-specific requisitions Detailed templates Hiring mangers don’t use the VMS Too difficult Training Takes too long Workflow No internal policy Executive, management support

Program Workflow Analytics Requisition Management Templates Approval Offboard & Evaluate Facilities & Logistics Notifications Worker Evaluation Source Vendor Distribution Rate card Analytics Billing and Invoice Consolidated invoice Adjustments Financial Integrations Select Qualification Candidate Ranking Interview Scheduling DNR / Duplicate Screening Payment Management Time, Expense Approvals/ notifications Engage Cost Allocations Tenure Control Budget Management Compliance/Onboarding Facilities & Logistics Compliance Items Electronic Notifications

Diagnosing Issues Quality of Candidates Supplier Training Scorecards / SLAs Rationalization Requisition Training the HMs Build templates Screening Adjust the process Who’s responsible?

System Process Training Diagnosing Issues A B Efficiency Integrations Workflow Notifications Process Exceptions End-to-end Common Training Suppliers Hiring managers A B

System Process Training Diagnosing Issues Compliance System Notifications Reporting Workflow stops? Process Policies Who’s responsible? Auditing Training Suppliers Functional areas Goes beyond external- drug screening and background check Look at internal processes that prevent things from moving forward- documentation and who is responsible as well as auditing

System Supplier Process Diagnosing Issues Busiest part of a VMS Cost Savings System Rate card Markups Market rates Supplier Scorecards Contracts Comparison rate data Process Pre-identified Exceptions Negotiation Busiest part of a VMS How to determine cost savings- rate cards need to be updated on a regular basis All suppliers should provide market rate cards per role. Look at the supplier rate cards to ensure placement and cost relevance and cost savings Which is better? Market rates change all the time so hard to build a current rate card. A markup prevents a supplier to push the rate down and allows for even footing. VMS allows for a competitive system and bill rate. How to benchmark outside of your suppliers? MSP will provide that data as well as a VMS may have access to scrubbed data across different geographies. The final negotiation is where you can realize cost savings by reduced hourly rate.

Cost Savings Areas Category Detail Benchmark rate cost savings Compares a defined benchmark rate / mark-up vs. the actual engaged rate / mark-up over a defined period of time to show the reduction Negotiated Savings Requisition-by-requisition negotiated rate savings Conversion savings / discounts (i.e., right hire savings) Volume discounts based on ascending spend thresholds Prompt pay / early pay discounts Tenure discounts Payrolling savings Renegotiations Rebates to client Reduced OT rates Decreased per diems

Cost Savings Areas Category Detail Hard Cost Savings Tangible bottom line reductions Saved money from budgets Target reduced supplier count per category and region Capture rogue spend due to lack of global visibility Automate financial approvals / provide governance Rationalize job descriptions to establish rate cards Total cost management Pay rate band usage Combination mark-up and bill rates True market comparison Normalize rates based on third party benchmarking Introduce competition though supplier neutrality / manage bid process Metrics Track cost savings (clearly defined and standardized) Improve processes (measurable cost reductions)

Cost Savings Areas Category Detail Reduced SG&A expenses Operational efficiencies improved (decreased costs to manage contingent labor) Decreased cost of ownership Shared Managed Services / VMS allow managers to focus on your business Consolidated invoice

Soft Cost Savings Areas Category Detail Mitigate Risk Mitigate risk through co-employment management Reduce financial exposure due to worker misclassification; manage on a per country basis Track licensing and certifications for expirations Establish tenure rules across various worker types and in accordance with local regulations Reduce invoicing / payment errors Periodic audits to identify risks and opportunities for corrective action Administrative Cost Savings Invoice processing PO processing Payment processing Time savings (e.g., invoice processing time) AP invoice audit savings based on the avoidance or credits on overpayments to supplier

Soft Cost Savings Areas Category Detail Process Improvements Cycle time improvements Candidate quality improvements Reduced reporting administration Consolidated invoice and payment process Elimination of invoice errors Soft Cost Avoidance Savings Reduce cycle time to fill Outsource process (invoice / payment, contracts admin, onboarding) to free procurement, AP resources MSP or SMS governance programs reduce HR, legal and procurement resources Comprehensive reporting to drive continuous program improvement

Diagnosing Issues Program Adoption Other Areas Training Management awareness Communication Change Management Executive support Stakeholder committee Entrenched suppliers

The Strategic Roadmap A roadmap is a process to aid in integrating business and technology A dynamic plan It describes where you want to be and how you are going to get there

Creating Your Roadmap Characteristics Goals Timelines Actionable steps Interdependencies Alternate routes

Creating Your Roadmap Goals need to be Specific Measurable Realistic Time-bound “Expand VMS to capture 90 percent of Admin category within corporate by end of year.”

Creating Your Roadmap How to Begin High-level sponsor with a vision Leadership support Identification of stakeholders Analyze gaps Set goals Build a plan

Creating Your Roadmap Identify who you need IT Procurement Human Resources Legal Business managers Functional managers Executives VMS/MSP/SMS (optional) CW PM IT Procurement HR Legal Business Leaders Functional Managers Executive

Creating Your Roadmap Discovery Business Objectives Functional Needs Business Processes Improvements Drivers Governance Recommendations Targets Guidelines Initiatives Organizational Functional Communication Process Technology Execution Prioritize Set Timelines Create Projects

Creating Your Roadmap

Begin Your Journey Put the issues, solutions and roadmap into a business case Present to the stakeholder committee Work the roadmap Rebrand and relaunch Start the road show

Thank You Contact Me John Moore, CCWP John.moore@peoplefluent.com