In today’s competitive business world, it's crucial that organizations seek new ways to reduce costs, acquire top talent, improve efficiencies, maximize the services they receive from their vendors and improve the quality of work they provide their customers.

One way that your organization can do this is through the proper acquisition, management and visibility of your contingent workforce.

There are a wide range of methods that companies use to constantly develop and improve their contingent workforce strategy (as well as other aspects of their company’s spend), but perhaps one of the least used is the highly effective method of strategic sourcing.

What is strategic sourcing?

Strategic sourcing is one of those terms that everyone in business knows, but a large number of people do not actually know what it really means. In its simplest definition, strategic sourcing is a means of planning a tactical approach to procurement - whether direct or indirect - or the supply chain management process of your organization.

Strategic sourcing looks at the procedures, methods and sources involved in your procurement process, and constantly re-evaluates them to ensure they are offering optimal value to your organization.

This could include streamlining processes, researching and refining partner services, evaluating purchasing activities to reduce costs and much more.

How can strategic sourcing for your contingent workforce benefit your business?

By creating a tactical procurement plan through strategic sourcing, your organization can become more efficient, reduce costs, empower your company to stay competitive within the industry it operates and ensures your procurement processes are delivering maximum value to your business by hiring the very best contingent workers to meet your needs.

Here are just a few of the key ways your organization will benefit from a strategic sourcing program:

1 - Identify the best suppliers

By using strategic sourcing, procurement managers will be constantly researching for new suppliers, as well as re-evaluating their existing partnerships with vendors and suppliers. This means your organization will be consistently able to locate the most reliable vendors, who provide the most value for their cost.

2 - Stable supply partnerships

By cultivating long-term and positive relationships with vendors, you’ll be able to achieve supply stability and realize a range of different benefits.

In fact, building relationships with your vendors can help to reduce costs, improve the quality of your purchasing decisions and improve your speed-to-market. The better the relationship you have with your vendors, the better they will be able to supply you with the temporary workers that will help your company grow.

3 - Constant improvement

Businesses who strive for success know that they can’t stand still - if they do, they'll be left behind. Thankfully, strategic sourcing is a field of constant development in which your procurement team is always aiming to achieve better goals.

By implementing a strategic sourcing program, your procurement team will ensure that your organization properly plans an effective and cost-saving supply chain infrastructure that drives your organization into the future.

4 - Automation

If inefficient manual processes are resulting in your organization wasting both time and money, then you’ll be happy to know that strategic sourcing for your contingent workforce can be automated through the use of a vendor management system (VMS).

An automated process will free up your employees to work on higher-value tasks that help drive your business forward, as well as create a central database for all contingent worker information.

By having a centralized database for your contingent workers, your company will be able to improve visibility and control into your workers such as risk assessment, pricing, contracts and much more.

On top of that, an automated process will help you to avoid costly errors, reduce administrative and labour spend, ensure you are compliant with laws and regulations as well as many more benefits.

Are you looking to implement a strategic sourcing strategy but don’t know where to start? Contact HCMWorks today and find out how our world-class and uniquely-tailored managed services provider (MSP) programs can help transform your company’s approach to procurement.