With the closing of 2019, we enter a new decade brimming with transformation, opportunity, and promise. It’s an exciting time to expand the reach and untapped potential of our industry, forging fresh paths across untrodden frontiers. As 2020 unfolds, we’ll be exploring many of the developments in store for staffing professionals, recruiters, MSPs, hiring organizations, and talent. But first, let’s take a look at some key trends that will influence MSPs and their staffing partners as this next era of work begins to shape our practices and methodologies.
Big Emphasis on Big Data
The voice of procurement best practices, Spend Matters recently published a short synopsis of predictions for 2020 by leading vendors in the supply chain market. According to JAGGAER, a cloud-based automation platform for spend management, the Big Data bandwagon will renew and reinvigorate the importance of business intelligence in the coming decade. Throughout the 2010s, industry pundits extolled the virtues of analytics and metrics in our increasingly digital world. However, many organizations have continued to rely on manual processes. Moving ahead, Excel spreadsheets and hunches will no longer cut the mustard.
All Analytics, All the Time
MSPs rose to prominence as a service-oriented response to the momentum achieved by vendor management systems (VMS) in the 1990s. With that connection, they have always embraced a data-driven approach to contingent workforce management. Members of a client’s contingent workforce no longer congregate in a centralized location or dedicated office. Workers are spread across departments, roles, and geographies throughout many organizations. Modern MSP programs must provide visibility and consistency across an expanding array of contingent talent channels.
With that also arises a growing need for analytics that extend beyond traditional performance metrics. MSPs are confronting requests to evolve their value propositions by integrating into workforce planning initiatives. But with the rigors of simply performing their core duties, little time and resources are left for MSPs to undertake these more strategic efforts.
Even in most current MSP programs, businesses still have little access to data beyond the historical information extracted from their VMS. This may hobble a client’s ability to solidify strategies and perform analyses based on metrics that extend beyond the parameters of the program or its internal stakeholders. This approach also delivers scant intelligence about the quality or productivity of talent, making it difficult to stake program decisions on anything more than basic measurements like price, attendance, negative turnover, assignment completion rates, and others.
“Evolving MSPs,” Deloitte concluded in its report on staffing automation trends, “are raising the bar when it comes to what contingent workforce programs can offer. They are doing so by providing externally benchmarked rates for labor, segmenting these insights into separate categories including skill sets, job types and geographic regions.”
This brings us to the “analytics everywhere” focus that MSPs will undoubtedly embrace in 2020, as Spend Matters explained:
Analytics everywhere powered by augmented analytics. The “analytics everywhere” strategy is focused on delivering intelligent analysis into all key processes and objects (sourcing events, contracts, supplier performance scorecards, procurement workflows), leveraging technology to model user interactions and simplify decision making. The highlight here is that organisations are going to be leveraging their data like never before and need to be able to make it digestible, actionable and linked to key business outcomes. The adoption of intelligent analysis will grow in order to achieve this.
Perhaps the biggest challenge in any business is the inescapable limitations of foresight. In a global economy, rife with fluctuations and sudden variances, most companies long for some sort of crystal ball or time machine. And while augurs are scarce and unreliable, maturing analytics may help us forecast needs more effectively and secure a stronger grasp on near-future requirements. From Deloitte: “MSPs are applying advanced predictive analytics to their own internal systems, allowing them to provide guidance about where rates could go and how talent is likely to perform based on previous performance for multiple businesses.”
The march toward a growing array of robust analytics—those that peel away the veils and open up a glimpse at dawning situations—represent another major trend in Spend Matters’ esteem:
Predictive analytics helps to identify future outcomes by analysing trending data with internal and external data sources. Users can interact with the data to refine results and build what-if scenarios to visualise trends and proactively make decisions to improve business processes. 2020 is going to be another year of uncertainty; organisations will be looking for more predictive analytics to help forecast, manage risk, manage costs etc., which means predictive analytics will play a larger role in 2020.
Throughout 2019, we at Oloop have delved into these mission-critical transformations in workforce technologies. So before you jump headlong into 2020, here are some articles to refresh your memory and help plan for the new year.
- See how staffing, MSP, and VMS providers are banding together to develop smarter KPIs.
- Learn how evolving automation, advances in data security, continuity planning. and new tech platforms are helping MSPs maintain unbreakable links in their supply chains.
- Collecting vast troves of information isn’t enough without understanding the most efficient ways of interpreting that data.
- Artificial Intelligence (AI) is the hot new thing in automation. But are we teaching the machines appropriately? Learn more about best practices in AI recruiting for diversity.
- Google’s controversial transfer of health records calls to mind the absolute necessity of data ethics and integrity in staffing software.
- Discover the emerging opportunities and enhancements of applicant tracking systems (ATS).
- Blockchain is slowly finding its way into workforce solutions and has the potential to transform the staffing industry. Take a look at some recent developments in this space.
- Check out a brief guide to gaining greater visibility through transformative VMS solutions.
- Learn all about the latest talent marketplace platforms and how these technologies are poised to disrupt the staffing industry.
- Yep, we actually proposed a new talent productivity KPI to shift the way MSPs and their staffing partners measure worker performance and productivity on the job.
Compliance and Risk Mitigation
As the nature of work and the workforce transforms, Spend Matters sees the need for MSPs to adopt more rigid controls over contract compliance and risk analysis. Once again, manual reporting and similarly analog processes won’t achieve the heightened levels of compliance that our digital landscape now demands. Fortunately, recent technologies are helping to overcome the obstacles:
Contracts compliance and risk analysis will become even more important, coming under wider and more intense scrutiny. Organisations will leverage vision-based, semantics-based, and language sequence-based machine learning techniques to extract, analyse and review contracts for potentially risky or non-compliant language to mitigate operational risks, ensure contractual compliance, and prevent savings and revenue leakage.
But meeting the tightening grip of compliant solutions reaches beyond contractual and operational issues. New employment laws and labor regulations went into effect on New Year’s Day. The staffing industry is confronting a bevy of recently introduced or passed legislation that could dramatically alter the way it complies with contingent and alternative employment arrangements in the age of digital capitalism and the expanding gig economy.
As Samantha Todd noted in Forbes, “While American workers ring in the new year by toasting champagne and making resolutions, their employers will be scrambling to ensure that they’re in compliance with the more than two dozen federal and state laws set to go into effect on January 1, 2020.” Let’s take a look at some of the most pressing and noteworthy changes.
Fair Labor Standards Act Overtime Provisions
“By raising the standard salary level from $455 to $684 a week,” Todd explained, “this rule will make all employees who earn less than $35,568 annually—or some 1.3 million workers—eligible for overtime pay of at least time-and-a-half under the Fair Labor Standards Act.”
Assembly Bill 5 (AB 5)
California’s notorious AB 5 requires companies to reclassify independent contractors as employees. The legislation was intended to protect gig economy workers from perceived exploitation by juggernauts such as Uber. Unfortunately, it has created countless problems for the workers themselves, even costing many their jobs. We’ve covered the topic in depth. Take a look:
- California's AB 5 could be hurting the freelancers it claims to help. It may be time to consider new worker classifications such as dependent contractors. And there's a role MSPs can play, too.
- Given all the questions about the effects of AB 5 on businesses, many are wondering how staffing providers and MSPs can help ease the burdens.
- California’s bill can dramatically change the gig economy. We discuss how staffing firms can be a bridge between freelance work and full time employment.
- Politicians in Congress have also taken aim at freelancers. Join the debate in how staffing providers and MSPs can make the sharing economy a shared success.
- Regulators have been trying to keep pace with transformations in the economy and employment. Now, the SEC seeks new workforce reporting rules for publicly traded companies. How will that impact hiring and staffing?
New Jersey Bans Salary Inquiries
New Jersey’s Assembly Bill 1094 prohibits employers from asking applicants about salary history, including wages and benefits. “By preventing companies from screening out or making offers to prospective employees based on past earnings, the Garden State hopes to promote pay equity,” Todd wrote.
New Jersey, however, stands among the company of many other states and cities that have also enacted similar measures:
- San Francisco, California
- Chicago, Illinois
- Louisville, Kentucky
- New Orleans, Louisiana
- Kansas City, Missouri
- New Jersey
- New York
Nevada Assembly Bill 132
The legalization of recreational pot usage may be spreading, but that doesn’t mean workers are immune from drug testing...except in the Silver State. As of New Year’s Day, Nevada became the first state to bar employers from refusing to hire candidates who test positive for marijuana during screening.
Accommodations for Pregnancy in Oregon and California
As Todd noted in her article, “House Bill 2341 will expand the Oregon Fair Employment Practices Act by requiring that all organizations with at least six employees provide reasonable accommodations for those who have workplace limitations or medical conditions related to pregnancy or childbirth. Accommodations may include modifications to a worker’s assignments, equipment or schedule.”
California also sought to avail working women through passage of Senate Bill 142, which mandates that employers provide workers with lactation accommodations (i.e., private rooms for nursing, not restrooms). SB142, now enshrined in the California Labor Code and Health and Safety Code, further requires that designated lactation areas have complete privacy, a place to sit, a surface and outlets for pumps, a refrigerator, and a sink.
Washington’s Paid Leave Expansion
Although many states have rolled out paid leave policies for workers, including contingent talent, Washington state has moved the needle. Eligible employees in Washington will be entitled to 18 weeks of paid family and medical leave per year.
“It is the fifth state to enact such legislation,” Todd pointed out, “and it won’t be the last: the District of Columbia and Massachusetts are slated to follow suit in July 2020 and January 2021, respectively.”
New Year, New Challenges and Opportunities
In contemplating these trends, we’ve only scratched the surface of all that 2020 holds. Throughout the coming months, we’ll be covering more developments and opportunities to make this year a smashing success for our client, talent, and MSP partners.