Webinar recap – How to effectively digitalize external workforce procurement and management

On May 12, we hosted a webinar focusing on tips for digitalizing the external workforce effectively. 

In this webinar, Søren Rosenmeier, CEO of Right People Group and Onsiter, covered the fundamentals of digitalizing external workforce procurement and management. 

In the main part of the webinar, Søren discussed:

• Reasons for digitalizing use of the external workforce
• Centralized vs. decentralized consultant procurement
• Key processes to be supported
• Types of digital solutions for the external workforce

Søren also showed an example of a digital system for the procurement and management of the external workforce through a quick demo of the Onsiter VMS.

Get the full story by watching the recording or reading the recap blog post below. 

Blog post recap: Why the external workforce matters 

The most important factor for a company’s success is the competencies that a company has. For most companies, there’s a huge emphasis on recruiting an internal workforce, but according to studies, the external workforce makes up anything from 30-50% of a company’s competencies. 

Reasons for digitalizing the external workforce

Price and quality

When you use a digitalized workforce procurement system, you have a broader reach of the vendor market. As a result, you’re more likely to find people with the right skills at the best price. 

Efficiency

A digital external workforce system supports a speedier need-to-solution timeline for getting the skills you’re looking for. A digital solution also provides capabilities that will minimize the time spent on procuring and managing the external workforce. It will also improve the onboarding and offboarding processes so that you don’t lose the valuable work they’ve done after they’ve completed their work with you. 

Compliance 

The capabilities available with digital solutions for external workforce procurement and management help companies comply with legal, tax, and GDPR requirements. Additionally, hiring managers are better able to use the correct and approved contracts for each of the roles they hire. An overview of the external workforce is also often available for compliance management. 

Different perspectives on what matters

When implementing a digital solution, it’s important to be aware of what matters to the different stakeholders, and focus on the points that make life easier. 

Hiring managers and procurement have different priorities when selecting a digital solution

Hiring managers

It is important for hiring managers to have access to high-quality consultants through a digital solution. It’s also critical that they are able to find consultants quickly, and that the platform is easy to use. 

Procurement

To procurement managers, price is often a more important criterion when it comes to the consultants that are available. Process compliance is next on their priority list for a digital solution, and then data and reporting on an organizational level. 

Centralized vs decentralized consultant procurement

In a centralized system, all procurement requests from the various departments in a company go to one department – often procurement. Then procurement reaches out to different vendors and then goes back to the requesting department to select the consultant together. 

In a decentralized procurement system, hiring managers do their own search and selection processes. 

In the centralized process, there is a consistent process, and there is a beneficial high competition among the vendors. However, in many organizations, hiring managers find this process too slow and bureaucratic.

Decentralizing the process will likely result in a faster and more agile process, and the organization will be able to have a closer relationship with vendors as they will have direct contact with them. It also means that hiring managers often “call a friend”, which introduces bias, and low competition among vendors. 

Best of both worlds

A digital solution maximizes the pros of both centralized and decentralized procurement processes while minimizing their cons. 

Introducing a digital solution will create a fast, agile, and consistent process, allow a broad reach across the vendor market, provide high levels of competition, allow direct dialogue with vendors, and provide hiring managers with an overview of their external workforce. 

Processes that a digital solution must support

There are 6 processes that a digital solution for external workforce management must support. 

The processes that a vendor management system must support

1. Requirements

You should be able to provide detailed and consistent requirements that the vendor needs to be able to supply the consultant you need. 

Based on his experience, Soren states that it is important for these digital platforms to accommodate remote workers based on the current trends induced by COVID-19. He also observed that companies that do better tend to have a majority of English-speaking consultants on their teams. It also allows a wider reach for talent, and therefore, a more competitive environment for consultant quality and price. 

Projects with attractive proposals are more likely to attract external workers than those with functional proposals. Highlighting what makes your project attractive will help differentiate your company from others and raise the chances of getting the best consultants. 

2. Market reach

An external workforce digital solution should get you a broad reach of the market because this raises your chances of finding the expert that you’re looking for at the best price.  

Look for a platform that provides access to freelance consultants as well as those employed under an agency. 

Your digital solution must be able to provide your hiring manager with a central framework with the capability of a wide market reach. 

3. Quality assurance and negotiation 

The digital platform that you choose should allow you to carry out quality assurance checks so that you can identify the best candidates.  

In order to assess a consultant’s quality and suitability, you should be able to easily access data like whether a consultant’s typical project length matches your expectations, and whether they have returning customers. 

Secondly, you should have a planned, structured interview with consultants. Without a structured interview, the interview may end up being a superficial conversation instead of an in-depth conversation about the project and the consultant’s abilities. 

At this point, you need to negotiate the price – before you choose your consultant rather than afterward.

4. Onboarding 

It’s important to have the basics in place before the consultant starts, such as providing access to certain systems. Attending to this after the arrival of the consultant will prevent them from getting started. 

Brief consultants on the organization’s mission and purpose, just as you would a permanent employee. The session doesn’t need to be a long one but this part of the onboarding is necessary as people tend to work better when they know their purpose. 

Another practical tip for onboarding consultants is to have video-based training for any fundamental training that they may need before they start. Pre-recorded training videos save a lot of time and allow consultants to start adding value immediately. 

5. Execution 

Your chosen digital platform should have contracting tasks like digital contracts and the extension of contracts a seamless experience. It should also be easy to do time reporting and set up an invoicing process.   

The platform should allow you to measure and record the quality of the consultant. In this way, you can re-hire the consultants who did a good job, and you can take advantage of their familiarity with your organization.

You should also be able to document the learnings obtained from the consultant you hired. As outsiders, they are likely to give you a fresh perspective and objective opinions on how you could improve things in your company. 

6. Offboarding

Having a structured offboarding process in place is important for several reasons. First, you don’t want to lose the valuable information they provided during your time with you. You will also want to ensure that you’ve removed their access to your systems to avoid security risks.  

A lot of companies overlook the opportunity to set up a flexible agreement with the consultant for future projects. 

Thirdly, you should have a structured knowledge handover. This can be arranged right from the beginning, where they can train your team that they work with as they go. 

Data collection 

Your digital solution should be able to collect external workforce data across the organization. You should be able to have an overview of your external workforce –  such as how much you’ve spent, which hiring manager hired who, who you currently have, and which vendors you hired from. This overview will give you an accurate picture of your external workforce.

You should also have a multi-dimensional view of your consultant costs. You should be able to view, for example, which department utilized a bigger budget, the types of consultants that were the most cost-effective, and where you got the best-performing vendors. 

You can then make strategic decisions for improvements based on the data you collected. 

Digital external workforce solutions available on the market 

There are 2 broad categories for external workforce procurement and management solutions. The first is a Vendor Management System (VMS) and the other is a Managed Service Provider (MSP). 

A paid VMS is usually a large, complex system that you can use to manage your external workforce. Some examples include Beeline, Allegis, and SAP Fieldglass. 

The other category is an MSP solution, which allows you to outsource the procurement and administration work to a vendor. Some of the companies that do this include eWork in Scandinavia and Workforce Logiq in the US. 

Our solution, Onsiter, falls into a category of its own, which is a free VMS system. Users are free to explore new vendors, add their own preferred vendors, make direct contact with vendors, and manage their external workforce on an intuitive, easy-to-use platform. We don’t charge anything for you to be able to use the platform, in exchange for being able to bid on your requests. 

Features on a paid VMS, MSP solution and Onsiter

Core flow of Onsiter

We designed Onsiter to fulfill what we think should be in a digital system procuring and managing an external workforce. 

The first thing a hiring manager needs is a template for assignments so that important information can be entered quickly. Our template contains the information fields that vendors need to determine whether or not to bid on a role. 

Sourcing consultants on Onsiter

Then there are 3 ways the hiring manager can send their needs out to get competitive bids. The first is to preferred vendors, then there’s the Vendor Universe and the third is the Onsiter marketplace. 

Preferred vendors

When you use Onsiter, you can add your list of preferred vendors to the system. This feature allows you to send new assignments to vendors you like working with. They will get a link to the assignment you’ve created and choose to bid on it. This list becomes a centralized resource for your organization because all the hiring managers that use the system will have access to the same list of preferred vendors. 

The Vendor Universe

The second way, the Vendor Universe, connects you to vendors that you don’t know yet. The Vendor Universe is a data index that we created that allows you to find the consultant you need from over 4000 vendors in Scandinavia. All you need to do is to do a keyword search, e.g. cyber security, and you’ll get a list of vendor websites that have this keyword within their website. You’ll be able to mark vendors that you find interesting, contact them directly and send them the link to the assignments you’ve created. 

The Onsiter marketplace

Thirdly there is our marketplace. When you make your assignment public, the consultants from the Onsiter marketplace will be able to view and bid on the assignments you post. If you choose to hire a consultant from Onsiter, we earn 5% of the rate you see in their bid. This is the only way we earn a profit from our otherwise free-to-use platform. 

Applicant bids on Onsiter

The bids you receive will follow the same structure, so you have parallel information from all who are interested in your project or assignment.

Manual process

The fourth way is a manual search done by our team, where we play the role of a preferred vendor, actively searching and selecting consultants to bid on your assignments. 

Onsiter demo

In the final section of the webinar before the Q&A, Søren did a quick demo of the Onsiter VMS. In the demo, he shows how users can use the free digital platform to procure and manage an organization’s external workforce.