For procurement leaders, managing priorities can be a balancing act. With 20 to 30+ items on their annual agenda, they must select the most critical initiatives to focus on. Typically, they rank the top 10 priorities from their extensive list and then narrow them down to the top 5 strategic initiatives. Change is challenging for any organization, so only a handful of these priorities get the attention they need each year. Temporary labor management often falls into this bucket, with procurement teams only addressing it when it becomes a critical necessity. 

However, contingent labor programs present significant opportunities for quick wins that can build momentum and provide long-term strategic value. McKinsey’s research indicates that procurement can unlock up to 10-15% cost savings through better management of indirect spending, which includes contingent labor. According to Deloitte’s Global Human Capital Trends, 51% of companies use contingent workers to reduce costs, and 47% use them to access specialized skills not available in-house. 

Here’s how procurement leaders can effectively navigate this area to secure early successes while driving meaningful impact. 

Where to Aim First 

1. Brainstorm Your Opportunities
   Begin by mapping out all potential opportunities related to contingent labor. This can range from cost savings, improving vendor relationships, enhancing workforce flexibility, or reducing compliance risks. Keep an open mind and engage stakeholders across departments to ensure a wide range of perspectives. 
2. Prioritize with Impact/Changeability Analysis
   Once you have a list of opportunities, prioritize them using a simple impact/changeability analysis. The goal is to identify initiatives that can generate significant results but are also easy to implement. This exercise will help you quickly determine where you can achieve the most value with minimal disruption. 
3. Create Your Business Case
   Building a solid business case is essential for gaining organizational buy-in. Focus on how the initiative impacts not just procurement, but your broader business partners. This will help you demonstrate that contingent labor management is not just a procurement concern but a strategic business initiative. 
4. Update Priorities Using Portfolio Management
   As your priorities evolve, use portfolio management techniques to assess their affordability and overall impact. This helps ensure that the initiatives you pursue are aligned with your organization’s financial and operational constraints. 
5. Leverage Quick Wins to Build Momentum
   By focusing on the low-hanging fruit, you can secure quick wins that generate immediate value. This early success helps create momentum, making it easier to push for larger, more strategic initiatives down the line. 

Building Your Business Case 

Crafting a compelling business case is crucial when seeking stakeholder support for contingent labor programs. Here’s how to approach it: 

• Think Like a Salesperson
  You are essentially “selling” your business case internally. Frame it in terms of unmet business needs, and how solving those issues with contingent labor will drive success. 
• Clearly Define the Unmet Business Needs
  Lay out the specific problems your contingent labor program will address. Whether it’s a skills gap, operational flexibility, or cost savings, make sure the need is clear and compelling. 
• Gather Facts, Data, and Proof Points
  Back your case with solid data. This can include benchmarks from your industry, cost-benefit analysis, and ROI estimates. Use proof points to illustrate your arguments and make them more persuasive. 
• Calculate Investment Needs and Scenarios
  Define the financial requirements of the program. Calculate the ROI and potential payback period, offering different scenarios that demonstrate the value under various conditions. 
• Socialize and Gain Stakeholder Support
  Build support among key stakeholders before presenting the business case to decision-makers. This will smooth the path toward approval and implementation. 
• Know Your Audience
  When presenting your business case, tailor your approach to your audience. Begin with a concise elevator pitch and have the detailed data available for those who need it. Avoid oversimplification, but ensure clarity. 
• When You Get to “Yes,” Stop Talking
  Once you’ve received approval, resist the urge to oversell. At this point, the focus should shift to implementation. 

Implementation: Managing Change Thoughtfully 

Executing contingent labor programs often involves digital transformation and requires careful management to avoid overwhelming your organization. 

• Lead with Culture
  Change can be met with resistance. Lead proactively by fostering an inclusive environment, communicating clearly, and being open to feedback. Be ready to course-correct if needed. 
• Leverage Small Wins and Continuous Improvement
  Don’t try to tackle everything at once. Implement initiatives gradually, celebrating small wins along the way to maintain morale and encourage further progress. 
• Celebrate Success
  Recognizing achievements helps to maintain momentum and build enthusiasm for continued improvements. 
• Define, Plan, Implement, Sustain—Then Rinse and Repeat
  Follow a structured approach to ensure the program is effective. Define your goals, plan the steps, implement carefully, and ensure the changes are sustainable. Once you’ve succeeded, repeat the process to build continuous value. 

Key Takeaways for Procurement Leaders 

• Balance Investments in People, Policies, and Processes
  While critical, investments in tools and automation can enhance productivity, improve quality, and free up time for more strategic initiatives.
• Prioritize Using Impact/Changeability Analysis
  This approach helps you focus on initiatives that generate maximum impact with minimal disruption. 
• Build a Strong Business Case
  Approach the business case like a sales pitch: understand your audience, present data-backed insights, and focus on unmet business needs. 
• Thoughtfully Manage Change
  Lead with culture and use small wins to maintain progress while implementing your transformation. 

By following these steps, indirect procurement leaders can effectively manage contingent labor programs, securing quick wins while setting the stage for long-term success. These strategies help align the program with broader business goals, ensuring that the procurement team adds strategic value and contributes to overall organizational growth.