Procurement isn't just about cutting costs anymore; it's a critical player in managing how companies get and use talent. The reality is, the workforce has changed, and procurement needs to be at the forefront.
The Blended Workforce is Here to Stay:
- Growing Numbers: Contingent workers (contractors, freelancers, temps) make up a significant chunk, currently 30-40% of the U.S. workforce, projected to hit 50% by 2050. This isn't a temporary trend.
- Strategic Recognition: More than half of companies, 54%, are now including their contingent workforce in strategic planning. This isn't a side project anymore.
What Procurement Actually Does in this Space:
- Sourcing Smarter: We're dealing with a mix of permanent staff, contractors, and project-based SOW. Procurement's job is to create smart ways to get each type of talent. For instance, 80% of large corporations in 2023 were exploring or had direct sourcing programs for contingent labor, aiming to cut costs by 30-50% and improve hiring speed.
- Finding the Right Skills: The market for specialized skills is tight. Procurement, through its network and market data, helps secure these crucial talents quickly.
- Dodging Legal Minefields: Misclassifying a worker as a contractor instead of an employee is a huge risk. The U.S. Department of Labor estimates this impacts over 10.6 million workers, costing billions in lost tax revenue. Procurement establishes the frameworks to prevent these costly mistakes.
- Real Visibility into Spending: Many organizations don't actually know their full workforce spend across all categories. Procurement uses tools like Vendor Management Systems (VMS) to get a clear, real-time picture of who's working, what they're costing, and how they're performing. This data drives better decisions, not just cost cuts.
- Leveraging Technology: AI and generative AI are rapidly changing procurement. 74% of Chief Procurement Officers (CPOs) plan to integrate AI by the end of 2025. Procurement uses AI for things like automated sourcing, contract analysis, and predicting market trends, freeing up people for more strategic work.
The Honest Truth: Collaboration is Key
Procurement's ability to drive value in workforce management relies heavily on working closely with HR. HR focuses on people and culture, while procurement brings the market intelligence, negotiation skills, and spend optimization. This partnership is essential to make sure talent acquisition isn't just effective, but also compliant and financially sound. Procurement is no longer just a support function; it's a strategic force driving business success in a blended workforce world.
