Having written business cases for various initiatives in recruitment, and having been involved in developing ROIs for implementing a centralised Contingent Workforce Management model for our clients, I have learned a few things along the way (and dodged some bullets). Since first writing this blog in 2014, very little has changed in regards to getting executive endorsement for a Contingent Workforce Management project.
If it ain’t broke
One thing I have learnt is that the biggest challenge in regards to building your business case is creating the desire to change. You need an executive sponsor who can see the big picture and who understands the issues. In my experience, the lack of central management and governance in relation to Contingent Workforce Management, means that most stakeholders will see a fragment of the whole. As a result, it can be hard for individuals to see a need for change, they don’t necessarily recognise the risks or costs associated with an unmanaged workforce – “if it ain’t broke, why fix it?”
Here are some of my learnings – which I will explain in detail below:
- Align the solution with the business drivers of the organisation
- Identify all of the stakeholders early in the process
- Whilst cost and ROI is very important, don’t let the other tangible and intangible benefits take a backseat
- Make sure you base the ROI cost analysis on forecast volume as well as current volume
- Show all viable alternatives and the costs and benefits of each
- Don’t over complicate it
Align the solution with the business drivers of the organisation
This is the platform for all of our consulting recommendations. The solution on offer must align with the organisation’s business drivers. The most common business drivers for implementing a contingent workforce strategy are around cost and risk; however these are not necessarily the only ones to be considered. For example, organisations have different reasons for why they utilise contingent workers. Some organisations use contingent workers to ramp up and down quickly in order to meet project requirements – they are looking for agility. Another organisation may use contingent workers for very specific knowledge and skills that they cannot get in their permanent workforce. This is a business driver.
If the business case does not demonstrate how the proposed solution aligns with the organisation’s business drivers, then you will struggle to get the initiative off the ground.
Identify all of the stakeholders early in the process
The tricky thing about initiating a contingent workforce management solution, is that usually the starting point is: There is no centralised view of the contingent workforce, and more importantly, no central owner. Not one person or business function owns it. Instead, there are multiple owners of bits and pieces of the pie – and they may all believe they need to be engaged in the process. These will include: Finance, Procurement, HR, Risk, Legal, Business Leaders and existing suppliers. Then if you are including a technology solution, you need to make sure your IT people are on board.
Multiple stakeholders can add a lot of complexity to the initiative – don’t underestimate the impact a stakeholder can have on your project initiative.
I recall a project where we presented the business case to senior stakeholders and everyone was happy, we thought we had the nod to go the next step until the detail-oriented finance person was pulled in. As this person was not familiar with the project, her questions took us by surprise. We had to go back and rework the ROI to take into account the level of detail this person required to be satisfied that the project had merit. This level of rework may have been avoided if she were engaged earlier in the process.
Make sure the project sponsor is influencing these stakeholders and understands their particular concerns and drivers. Some people just want the big picture, whilst others want all the detail – this needs to be managed. Ideally, your project sponsor has already socialised the project initiative with the stakeholder community so that they are amenable to the business case once it is presented.
Whilst cost and ROI are very important, don’t let the other tangible and intangible benefits take a backseat
The reality is if you can’t demonstrate the cost benefits of an initiative, you will struggle to get this over the line.
However, many organisations have no idea what their contingent workforce costs, or understand the risks and potential liability that the organisation is exposed to. Getting this in order, having visibility of the workforce, reducing your risk, being able to re-use talent elsewhere, having a clear strategy around contingent workforce utilisation to support your business needs, being able to ramp up and down as required – these are all real and tangible benefits of a comprehensive workforce management solution. They need to be called out in your business case.
Then there are intangible benefits. This may include having an engaged contingent workforce because your contingent workers are receiving quality service from a CMO or MSP provider. An engaged workforce improves your EVP, making it easier to attract talent when you need it. Another intangible benefit is improving the quality of your supply chain, because your suppliers know they will be paid on time. These are great benefits of a well-designed contingent workforce management model.
Make sure you base the ROI cost analysis on forecast volume as well as current volume
I have fallen for this one a few times, hopefully I have learned by now. Usually when doing a cost analysis, we gather a year’s worth of data and apply the cost of the proposed models against current state, using this data as the baseline. The problem that can arise is that when presented, someone says “but we will be reducing our contingent workers over the next 12 months”. This can really impact the modelling and you need to get this information up front to understand your ROI for different volumes.
Show all viable alternatives and the costs and benefits of each
I know this is obvious, but not everyone does it. You do really need to present a range of options, and highlight the costs benefits, and pros and cons, of each offered solution.
Let the key stakeholders make the final decision – if the business case stacks up, then the right decision should be obvious.
Don’t over complicate it
My preference is to present a business case in a presentation format such as PowerPoint, if possible. This forces me to present the information clearly and concisely, and I like to use diagrams. Of course, someone (usually Finance) will want to scrutinise the detail of the cost analysis, and they should, but the main business case should be clear, concise and easy to follow.
I hope these insights can add value to your business case. I’d be interested to know if you have any experiences to share on getting the business case right.
If you want to learn more about workforce composition, building a business case, managing a contingent workforce function and the rise of the freelancer, join Trevor at this year’s Contingent Workforce Conference in Sydney 22-23 September.
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