Sonyett Bailey, Marketing Director
Negotiate With Contingent Workforce Suppliers With Confidence
The art of negotiation is a special skill that many leaders come by through experience, education, or just pure instinct. In any company, the art of negotiation can be impactful to the top and bottom lines and is highly sought after. This especially rings true when working with contingent workforce suppliers.
For companies relying heavily on a contingent workforce to supplement critical projects or skill gaps, managing suppliers is an art. The ability to effectively negotiate upfront or during an agreement requires creativity, analytical thinking, evidence of performance, and yes, a winning personality. Let’s add one more potentially game-changing ingredient that companies are often missing. Did someone mention workforce data?
What if You Could Shift the Advantage from the Supplier to You with the Right Analytics?
Currently valued at $239.71 billion globally, the managed services market is set to grow at a CAGR of 13.4% over the next eight years. With advanced business automation and a pandemic-driven increase in remote work, contingent workforce suppliers—also known as managed service providers (MSPs)—now play an important role in many business operations. For companies with effective performance indicators in place, there are significant business cost savings to be made with such a workforce model.
It is common knowledge that KPIs can prove valuable at the negotiation table. When it comes to managing your contingent workforce, the KPIs you choose should directly reflect your organizational goals and inform future business decisions.
Cost, quality, and efficiency are three of the most significant areas to track. They do, however, require a more in-depth understanding than simply checking that you remain within budget and on schedule. As we all know, the costs of your overall contingent workforce includes more than solely the hourly rate of workers. Companies have a long and successful history of securing a good or the best rate by leveraging suppliers against each other. Price is only one area of focus. How do you respond when a change order (CO) is presented from the supplier? I submit to you; it starts with the right data.
The Power is in the Data
Change is inevitable. That change order (CO) addresses a shift in the project scope—it adjusts the timeline, scope, and/or the price. As the decision maker, you expect rationale for the change. The lack of visibility into any of the numerous inconsistencies that negatively impact projects and work output are what stifles your ability to knowledgably negotiate COs. This could burden your business with unnecessary costs.
Your suppliers, who are more connected to the details, have the leverage to position the CO in their favor. Imagine if you could sit at the table with any of your suppliers with data that speaks to the following:
- How many hours were actually worked?
- Am I overpaying for unaccounted hours?
- Is the team being fully utilized?
- Do we need to add headcount?
When leveraged properly, this type of data can be a game changer, in terms of efficient management and in productivity and—ultimately—labor expenses.
Up Your Negotiation Game With Sapience TransparenSEE
A solution like Sapience transparenSEE is designed to help you know which key performance indicators to measure, along with the ability to measure them accurately, and negotiate strategically with contingent workforce suppliers. This helps you accurately gauge the level of expertise required for your projects—and the costs relative to those needs. Moreover, you can make more accurate project completion predictions and minimize business risks.
Supplier negotiations just got easier with frictionless, automated time capture. The Sapience Platform replaces manual self-reported work hours so you as the decision maker can effectively engage with suppliers and feel confident in your contingent workforce investment.
The platform automatically collects and analyzes data for you—eliminating time-consuming manual tasks—and it showcases this information in a way that is easy for anyone to understand and put into action. For CFOs and heads of procurement responsible for approving those costly invoices, you can reference data that reflects actual work time.
This type of data is extremely beneficial for negotiations. Measuring cost, quality, and efficiency KPIs with an analytics tool like Sapience empowers business leaders to make accurate and strategic business decisions regarding:
- Vendor value. Automated data collection provides insights into the total contingent worker count, invoice amount, and actual hours worked.
- Capacity utilization. The need to reduce or add more resources.
- Skill misalignment. Identifying situations where you are paying a premium for niche skills, but the resources are working on non-niche skill activities.
- Project predictability. The right data can eliminate assumptions by offering concrete information to strengthen the project timeline and minimize risks that lead to delays and overspending.
- Compliance risks. By incorporating compliance policies into the analysis platform, managers can validate and track worker access to files or applications.
Having a balance of power between you and your vendors is key to both the negotiation process and long-term relationships. Coming to the table with a total view and knowledge of what’s really happening with your workforce can shift power in your favor positioning you with the leverage you need to maximize value of your contracts.
Schedule a free demo today and discover a host of additional features for effortless and lucrative contingent workforce management.
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