W ith globalization, shifts in workforce demographics and the shortage of critical skills, it is no surprise that organizations are rapidly embracing a more flexible workforce. In fact, nearly 27% of an average organization’s workforce is expected to be comprised of contingent labor by 2015.

Although a flexible workforce can help organizations reduce costs, close talent gaps, and navigate change, developing a strategy around the use of contingent labor has become increasingly complex. In order to maximize the value of contingent labor and plan for future workforce needs, organizations must adopt a more systematic approach to the way they manage and engage this critical talent pool. Organizations have a lot to consider and one issue that remains a key focus is SOW-based projects and services.

Today, 50% of Best-in-Class organizations have standardized processes in place for handling SOW. Several strategies have helped Best-in-Class organizations streamline management of these projects and services and drive quality and effectiveness for this critical component of modern contingent workforce management. The top strategies include a balance of both tactical and strategic elements. Tactical elements (management of master agreement and tracking of spend) allow organizations to stay compliant and lift the administrative burden placed on managers. Strategic elements (increased collaboration and ability to distinguish SOW from contingent in the requisition phases) ensure that SOW-based projects are aligning to business objectives in order to plan for future workforce needs.

Below are the top strategies that Best-in-Class organizations identified in Aberdeen’s 2013 Contingent Workforce Management report for managing SOW projects:

  • Collaboration: 61% of Best-in-Class organizations are able to collaborate on information for managing SOW-based projects compared to 11% of All Others.
  • Measurement: 55% of Best-in-Class organizations measure efforts for managing SOW-based projects compared to 16% of All Others.
  • Visibility: 76% of Best-in-Class organizations have visibility into spending for SOW-based projects compared to 21% of All Others.
  • Clearly Defined Goals: 65% of Best-in-Class organizations have clearly defined goals in place compared to 22% of All Others.
  • Capabilities: Over 50% of Best-in-Class organizations have RFx Capabilities in place compared to 16% of All Others.

SOW-based services have been gaining momentum as part of the contingent workforce umbrella. Laggard organizations need to consider a strategy that will streamline management of these projects and services and drive quality and effectiveness.

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