L is for Light Industrial

Aaaand we're back!?After taking the last 2+ years off from writing my letter blog series whilst working at Coupa, we're picking back up where we left off, with the letter L.?And today we're talking about Light Industrial.

First, let me start by saying I prefer to use to phrase 'blue collar' as it's more globally applicable as well as broader in its application from a role perspective.?Craft workers like pipefitters, carpenters and boilermakers would never fall into 'light industrial', but also don't fit white collar office work.?So please read this with the broader blue collar worker types in mind, even though I've picked 'light industrial'… b/c I needed an L word for the blog. :)?

Now let's get the core issue I want to talk about - most legacy contingent workforce management solutions - VMS & MSP - do not address light industrial (LI) work very well.?So, I want to talk about How we got the point where this dynamic exists, Why we should care about managing light industrial, and What can we do about it?

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How did we get here?

To understand where we are we always need to go back to the origins (not oranges) - you know, the beginnings.?The origin of the contingent workforce management (CWM) industry was IT workers and suppliers charging 400% mark-ups when we all thought the world was coming to an end with Y2K.?Controlling costs and managing staffing vendor mark-ups the driving force and a pricing model that was based upon spend throughput was born.?This model still exists today for over 96% of CWM solutions. ?So naturally, attention focuses on high spend, high margin areas, like white collar professional labour and spends less time on low cost, high volume, high effort labour.?This disincentivizes traditional CWM solutions from innovating their LI capabilities.

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Why should we care?

The dynamics of the labour market have dramatically changed since 1999.?I would argue that finding and retaining talent is now the #1 priority of organisations, in ALL areas.?Want to get petrol in the UK??Tough, you are short 100,000 drivers.?Want to order that new pair of shoes from Nike??Tough, they have shut down 80% of their factories due to labour shortages.?Want to call your airline to change your flight??Tough, they are 'significantly short' on customer service staff and might be able to handle your call in 24-48 hours.?In other words, it has become critical for organisations to understand their entire workforce, not just the highly paid white-collar workers.?On top of that, the highest risk workers (in terms of classification, wage and hour, safety, etc.) are almost always the light industrial workers.

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What can we do about it??

At core, we need to change the mentality of contingent workforce management and that can be reflected in how we pay for it.?Understanding the roughly half of your workforce that is now external should be a basic, fundamental requirement of any well functioning modern organisation.?As such, systems and tools that enable this should be considered 'essential', like an ERP or HR system.?So we should be budgeting and paying for these systems just like other critical enterprise tools.?Additionally, leveraging spend is no longer the appropriate lever.?Cost per worker or cost per user are much better, more equitable and more common with other enterprise class applications.

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Seems simple, right?

Well, it is, and it isn't.?Changing mentalities and going against tradition is never easy.?But it's logical and inevitable.?So let me know if you want help or assistance in moving your organisation into talent centric contingent workforce management.

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