Pontoon’s Evolutionary Services Procurement Approach for Contingent Hiring Success

Pontoon’s Evolutionary Services Procurement Approach for Contingent Hiring Success

This piece was originally authored by Nikki Edwards, HR Outsourcing Principal Analyst at NelsonHall. 

Pontoon’s recently reimagined Services Procurement contingent hiring solution enables a simplified, client-centric journey, with best practice at its core and underpinned by industry-leading technology. In 2021, Pontoon conducted a thorough evaluation of its existing offering, other solutions in the market, and what current and future clients were looking for from Services Procurement.

Nikki Edwards

Nikki Edwards, HR Outsourcing Principal Analyst at NelsonHall

The result is a solution designed around three primary pillars: manage the process, facilitate the buy, and outsource the category. The approach is modular, offering the flexibility needed for a broad mix of clients, with each pillar increasing in level of complexity and value. Pontoon’s client engagements range from small and mid-sized to billion-dollar global programs.

Whereas a traditional MSP is a holistic program needing organizations to embrace an all-encompassing change in their contingent hiring processes, Services Procurement and Statement of Work (SOW) can be perceived as an evolutionary service offered as a part of an MSP.

Build a solid foundation on which to grow

The aim is to start with the foundational elements of Services Procurement rather than an immediate introduction of a high-level procurement service. By starting at a managed level, procurement professionals can focus on their core business priorities, day-to-day operations can continue uninterrupted, and adoption rates are driven up.

Pontoon believes that its approach would ensure success and establish a solid foundation to build steady, manageable, and successful change, irrespective of a company’s readiness and Services Procurement ambitions.

It has successfully deployed its new approach with a U.S.-based healthcare client who started their Services Procurement journey on the first pillar: manage the process.

When Pontoon first met the client to discuss MSP services leveraging the client’s existing ATS and VMS platforms, they stated their ambitions to embrace SOW services quickly. However, cognizant of the risks of moving too fast, Pontoon followed its tried-and-trusted approach in first establishing itself as the client’s MSP vendor. The focus was on delivering results (process efficiency, visibility, compliance, and cost-savings) and building trust (achieving a consistently high stakeholder satisfaction score) before helping them navigate Services Procurement/SOW. In the initial phase, Pontoon took on some of the tasks and activities in the ATS to ensure the contingent workforce records were compliant across both platforms. Within six months, Pontoon leveraged data and analytics to identify action items to optimize the existing supplier pool, ensuring selected suppliers were best suited to the client’s needs.

As the client’s MSP vendor, Pontoon was aware that internal stakeholders had brought in SOW resources (though SOW was out of program scope), and it was therefore likely there would be a degree of worker misclassification. Pontoon suggested it run a project with the client to analyze those resources, and subsequently identified 20% as incorrectly classified. Pontoon was comprehensive and thorough during the resulting discovery process. The rigor applied from understanding how an organization’s contingent labor can be hired, hidden, and allocated in different ways enabled Pontoon and the client to gain full visibility of all SOW resources, ensuring that both parties could collectively isolate the actual SOW versus contingent spend.

Invest the time and enjoy the discovery… 

Pontoon strongly believes that a successful Services Procurement/SOW program requires a methodical approach, bringing net new contracts under the program scope in the first instance and avoiding mid-contract changes. The client, with 105 SOWs in flight and 600 workers associated with them, would not be able to cope with the disruption of immediately changing all contractual terms. Similarly, the client’s existing VMS technology would require significant work to update this change in volume.

Pontoon walked the client through the Services Procurement/SOW Discovery, Data, and Recommendation steps, determining how it would implement Services Procurement/SOW and walking through every workflow step, establishing who would take responsibility for specific actions.

Pontoon identified that cost savings would be ~12% (which, projected forward, equated to $4m per year), essentially driven by the solution design team through rate card and invoicing compliance. The team determined what the client wanted from a rate card strategy perspective, backed it up with market data, and ensured it aligned the right strategy to the client’s brand perception.

Typically, these programs are supplier-funded. However, in this case, the client is financing the program, encouraging more suppliers to get on board, notably big consultancy firms. In such circumstances, this can be a harder sell to a leadership team. However, the business case created for the procurement team to present to their leaders showed the added value that Services Procurement/SOW could bring and how they would outweigh the cost of the client-funded expenses. In preparation for Services Procurement/ SOW, the tech stack for SOW was streamlined and aligned to the broader MSP – comprising the VMS and a few additional tools for onboarding and analytics.

…and the recommendations will reap rewards

The business case evolved into a complete policy change, with non-compliance post go-live resulting in withholding budget sign-off. By coincidence, the new policy gained executive approval on the third anniversary of the initial MSP launch.

Pontoon would like this client-funded model to be repeated to prospects, to drive better adoption rates and to better support client business objectives.

Manageable steps deliver results

Pontoon is now working on the second pillar of the program’s evolution. Using its vast array of accumulated data, it anticipates supporting the client with enhanced vendor selection and assessing bids so that the client can take on more strategic elements internally. As global economic issues abound in 2H 2022 and are likely to be front-of-mind in 2023, Pontoon expects that specific pillars may be embarked upon across various functions of the organization at different times, determined by the client’s maturity and appetite for further change. However, it is clear that results have been delivered by taking a systematic, manageable approach, paving the way for further success.

Related Post
Thought Leadership
Similar Resources