This webinar, “Directly Source and Engage Highly Skilled Independent Talent with Controlled Cost and Risk,” is brought to you by Spend Matters and MBO Partners. In it, you will learn about the fast growing independent professional workforce segment along with the state-of-the-art models for effectively and efficiently engaging these professionals. Key topics will be:
- Recent studies into the demographics of independent professionals and how they increasingly prefer self-employed status and direct engagement with clients.
- How enabling direct sourcing of these workers can be a highly efficient alternative to the traditional staffing supply chain.
- How integrated procurement models, such as source-to-pay, and technology-enabled platforms, including work intermediation platforms (WIPs) and freelancer management systems (FMS) are transforming the way businesses engage independent talent efficiently and with less compliance risk, while achieving new visibility into and control over contractor spend.
- How MBO Partners provides unique engagement alternatives that enable efficient, low-risk direct sourcing and engagement of highly skilled independent talent.
2. Today’s Speakers
Dennis Kanegaye
Chief Client Officer
MBO Partners
Dustin Talley
Director of Solution Design
MBO Partners
Andrew Karpie
Research Analyst:
Services and Labor Procurement
Spend Matters
Jason Busch
Founder & Managing Director
Spend Matters
3. Who We Are and What We Do
Parent Company – Azul Partners
• Founded 2004, headquarter in Chicago
• Spend Matters (www.spendmatters.com),
MetalMiner (www.metalminer.com)
• A blend of media and analyst insight
focusing on procurement
• Our sites are collectively called
Spend Matters Network™
• 150+ new articles published weekly
across the sites
• Over 130,000 unique visitors/month
• Our combined traffic makes us one of the
largest B2B web publishers in the US
• Diverse audience: procurement, supply
chain, manufacturers, service companies,
retailers...
4. MBO Partners Background
• Compliance, engagement,
and payment solutions for
internally sourced ICs
• First and largest
“Independent Contractor
Engagement Specialist”
• Strong F500 relationships
with 98% enterprise client
retention
4
KEY
CREDENTIALS
• Largest “Agency of
Record” service provider*
• Most experienced*
• Shortest on-boarding
time*
• Highest % of F500
accounts*
• GSA schedule since 2003
* Source: Staffing Industry Analysts,
“2014 Payrolling and IC Evaluation /
Compliance Landscape Report”
5. Industry Trends: It’s the Era of “Going Direct”
5
BANKING SHOPPING ENTERTAINMENT
TRAVEL MUSIC
All product and company logos are property of their respective owners.
6. SOCIETAL TRENDS
Unprecedented independent
workforce growth
REGULATORY TRENDS
Increase in compliance laws
and enforcement
BUSINESS TRENDS
Accelerating use of
independent talent
TECHNOLOGY TRENDS
Direct sourcing through
virtual talent pools
Trends Point to a “Perfect Storm”
7. Est. 40 million independent workers in 2019
Source: MBO Partners “2015 State of Independence” report
U.S. Independent Workforce: Last Five Years
7
$
8. U.S. Independent Workforce: Other Key Metrics
Gen Y 28%
Gen X 29%
Boomers
30%
Seniors 14%
INDEPENDENT WORKERS BY AGE, 2014
Source: MBO Partners “2015 State of Independence” and “2014 State of Independence” reports
9. Macro Industry Trends
• External talent
– Half or more of workforce for over 1/4 of organizations
– Contractors, outsourced service providers, temp staff, freelancers
• Shift from employees to external resources set to accelerate over
next five years (1)
• “Independent contractor usage within enterprises will continue to
grow exponentially as companies adapt to the changing
workforce, and enjoy the benefits of a variable labor” (2)
“Jump ahead to the year 2020. Half the people you rely on don't actually
work for you and that's a good thing—if you're ready.” (3)
(1) Source: Chartered Global Management Accountants (CGMA), ‘New Ways of Working ’ 2014
(2) Forbes, “What The Rise Of The Freelance Economy Really Means For Businesses.” 2014
(3) Source: Deloitte, “The Open Talent Economy,” 20139
11. US GDP in 2014
Source: MBO Partners “State of Independence in America” report, October 2014
Independents Contribute to the Economy
11
Global GDP in 2025 2.7
Source: McKinsey Global Institute “Connecting talent with opportunity in the digital age”
report, June 2015
12. Digital Platforms Make “Going Direct” Possible
• Platforms have been entering the world of work
13. MSP
VMS
Tier
1
Tier
1
Tier
1
Tier
2
Tier
2
Tier
2
Large
Enterprises
Small
Businesses
Supply
Base
Existing Contingent Workforce Supply Chain
10 Years Ago
CW Supply Chain for Enterprises: Enabler or Constraint?
14. Tier
1
Tier
1
Tier
1
Tier
2
Tier
2
Tier
2
Large
Enterprises
Small
Businesses
Existing Contingent Workforce Supply Chain
5 Years Ago
Work Intermediation Platform/Ecosystem
Supply
Base
MSP
VMS
Emergence of Digitized Work Intermediation Platforms
15. VMS
Tier
1
Tier
1
Tier
1
Tier
2
Tier
2
Tier
2
Large
Enterprises
Small
Businesses
Existing Contingent Workforce Supply Chain
2-3 Years Ago
Supply
Base
MSP
Increasing Digital Channels to Independent Workers
16. VMS
Tier
1
Tier
1
Tier
1
Tier
2
Tier
2
Tier
2
Large
Enterprises
Small
Businesses
Existing Contingent Workforce Supply Chain
1-2 Years Ago
Supply
Base
MSP
FMS
FMS-types of solutions tend to be different in many ways
including origin, focus, sourcing, compliance, etc.
Emergence of Freelancer Management Systems (FMS)
17. Recent Regulatory Activity
17
New Hampshire
and Massachusetts
sign MOU
Memorandum of
Understanding
with 11 states,
IRS, DOL
2012 federal budget
includes $23M for
“
Misclassification
Initiative”
California Senate
Bill 459 goes into effect
Solicitor of Labor indicates
that misclassified labor is
one of agency’s
top priorities
DOL FLSA suits reach
all-time high in 2012
Payroll Fraud
Prevention Act of 2013
introduced in U.S.
Senate
Iowa signs MOU
New York
signs MOU
IRS re-starts Questionable
Employment Tax Practices
program
Affordable Care Act
goes into effect
Payroll Fraud Prevention Act
of 2014 introduced in Congress
Executive order adds compliance
requirements for federal contractors
Alabama
signs MOU
Wyoming
signs MOU
Florida
signs MOU
Louisiana
signs MOU
Wisconsin
signs MOU
California
AB-1897
passed
2016 Fed Budget
focuses on IC
misclassification in
“fissured workplace”
NY JETF Audit: 12,000 audits
133K misclassified workers
Rhode Island
signs MOU
Kentucky signs MOU
(22nd state)
DOL offers new
classification
guidance
18. SOW and STAFF AUG EMPLOYEE / EMPLOYER
RELATIONSHIP
IRS
DOL
FREELANCERS
SMALLSVC.
PROVIDERS
COMMON-LAW TEST
ECONOMIC REALITIES TEST
A-B-C TEST
The Compliance Tug-of-War
19. “Managed Talent Network”
with embedded compliance
and engagement solution
MSPs / staffing firms
Engagement Risk
Current State:
Managers sourcing and
engaging contractors
Freelancer marketplaces
LowHigh
ServiceComplexity
High
(Projects)
Low
(Tasks)
IC / SSP Sourcing and Engagement Landscape
20
20. Safe, cost-effective solutions
that make it easy to
source, curate, and engage
independent talent
“Next Practice”: Managed Talent Network
21
21. 65% of companies cite the creation
of a visible talent pool as the largest
contractor workforce-related issue.
Source: PageUp People Survey, 2014
The Need for Virtual Talent Pools
22
22. Sourcing Supported by Full-Service Model
ACCOUNT MGMT.
• Reporting
• Education
• Continuous
improvement
CLIENT SOURCING NEED
• Self-identify
• Negotiate
• Select
ASSESS
• Technology-
enabled
• High-touch
• VAST
ENGAGE & PAY
• MBO Exec
• MBO Sub
• MBO Staff
SUPPORT
• Dedicated
support
• Relationship-
driven
MBO CONNECT™
23. Talent Pool Sources
24
Talent Market
Network
Active
contractors
Provider
community
Recruiting
efforts
Existing
payrollers
Marketplaces/
networks
Small
vendors
Full-time
alumni
24. Solution:
Share the upcoming project with your talent
pool in an RFI format.
Challenge:
A Business Unit has a large upcoming need
but is not ready for specific candidates to
apply.
But pre-project awareness within the talent
community may enable applicants to be
ready when the project nears.
The BU can vet interested workers earlier by positioning their proposed solution and value.
Workers can be placed on a “virtual bench” and assigned to project teams when the project
commences.
VALUE:
Use Case: Large Upcoming Project
25
25. Challenge:
Reporting shows a high level of contractor
“re-use” across departments and managers,
with most billing at the initial recruiting
mark-ups.
The client lacks ability to schedule and
engage alumni workers at a reasonable cost.
Solution:
Create groups by skillset in the talent pool.
Invite these contractors to join your talent
pool for future opportunities.
By strictly enforcing/modifying talent ownership clauses in supplier contracts, managers can
compare previously engaged talent from all suppliers and re-engage
the best at lower payroll markups.
Use Case: Talent Ownership
26
VALUE:
26. Use Case: Dynamic Rates
27
Compare all talent quality and rate information to retain the best resources for the job.
Use this information as leverage in driving down market rates of
preferred resources by up to 20%.
VALUE:
Challenge:
The client has engaged 10+ contractors of
the same discipline / expertise on
different projects across the organization.
This self-sourced talent is rarely shared
with other managers, so the client does
no know if it is consistently engaging the
best talent at the best price.
Solution:
Create groups of existing talent according to
area of expertise.
Broadcast opportunities to these groups and
request “best and final pricing” from
interested workers.
30. For contract workers
Provides a pipeline of relevant project
opportunities and creates a steady stream of
assignments from their “clients of choice.”
For organizations
Provides the ability, through independent
talent access and engagement, to fast-track
critical projects and initiatives not otherwise
achievable without just-in-time access to
resources.
Talent Pool Growth: Value for Both Sides
31