Trevor Vas (@trevorpvas), Director at ATC Events, and Gabi Bywater, Lead Category Specialist at NSW Procurement, discuss what the NSW Government is doing to transform the way it manages and sources contingent workers.
TV: Why is the NSW Government undertaking this project?
GB: Originally it started because there was a great focus on SME participation – how do we open contracts to more suppliers? The second driver was savings and looking at which contracts we could examine to drive cost savings.
TV: Is there a paradox between between opening it up to SMEs and savings, or are they complementary?
GB: They’re complementary, because we standardised the terms and conditions so that everyone plays on a level playing field which then allows us to concentrate on the quality of service and the quality of hires, without having to worry about negotiating price.
TV: So how are you going about satisfying the business drivers, what are you implementing?
GB: Our contingent workforce strategy has four pillars.
The first pillar we implemented was the ‘Scheme’, a pre-qualification scheme which replaced the previous contract (which was called contract 100) The contact 100 locked out everyone bar the 18 suppliers who successfully tended. We replaced this with the Scheme whose conditions are the same for all. The Scheme never closes for new applications, so it is a contract without an end date; we accept applications all the time.
TV: So you could potentially have 1000 SMEs providing contingent workers?
GB: Potentially! At the moment (we’ve just pre-qualified more suppliers this week) we have 262 suppliers and 85% of them are SMEs. Even better in terms of spend, more than half of those pre-qualified suppliers have spend that they are reporting. 86% of them are SMEs.
TV: That’s extraordinary. It’s encouraging business in NSW. So how are you going about implementing these pillars? What is pillar 2?
GB: Pillar Two involved going to market for a vendor management system (VMS). That was a 12 month exercise and the aim was to implement a single VMS across the sector to provide transparency, information and the same processes for all our suppliers. We awarded this to Fieldglass in January 2014 and we hope to implement it into our first government agency on the 1st of September. The blueprint has been built and now we’re just customising it for our first agency.
TV: How many agencies are there?
GB: There are nine agencies: health; education & communities; transport; family & community services; premier & cabinet; trade & investment, regional infrastructure & services; police & justice; planning & environment, and treasury & finance. Under each agency they have their business units and departments.
TV: Who’s involved in this implementation, other than yourself?
GB: I have a Contract Management Working Group (CMWG), which is a another name for a steering committee. We meet monthly and there are representatives from most of the major agencies on that team. I work very closely with the public service commission – PSC – from a workforce planning perspective. I also have working groups relative to each of the four pillars of the strategy that I regularly meet with.
TV: So would you say your job is just one giant project management exercise?
TV: What is the greatest competency you need to create success?
GB: Patience! [laughing] But really, the greatest competency in this project is to always, always, always focus on the end goal; what are we trying to achieve? If we keep focusing on the end goal, the ‘how’ can be customised. So I have one story with lots of different flavours depending on my audience.
TV: So what is Pillar Three?
GB: Pillar Three is a panel of managed service providers (MSP). We recognise that there are some agencies who are very keen to implement the VMS but they’ve identified that they don’t have the resources and/or the expertise internally. We’ll put together a panel of suppliers that agencies can engage to implement and then manage, ongoing, the contingent workforce for that agency.
TV: So is it possible that you could have 9 different managed service providers?
GB: Yes it’s possible and we’ve published the list of respondents on the etenders website, so that is now public information. We’re all about disclosure!
The current list of tender respondents includes:
- Adecco Australia Pty Ltd
- Alexander Mann (AMG) Asia Pacific Pty Ltd
- Comensura Pty Limited
- Greentech Industries Pty Ltd
- Hays Specialist Recruitment (Australia) Pty Limited
- HRX Pty Ltd
- Hudson Global Resources (Aust) Pty Limited
- Kelly Services (Australia) Ltd
- Manpower Services (Australia) Pty Ltd
- Randstad Pty Limited
TV: When will the decision on the panel of MSPs be made?
GB: We’re finalising our decision as we speak. We’re aiming to be able to announce the award by the end of August.
TV: And finally, the fourth pillar?
GB: The fourth pillar is to look at setting up our own contingent pool of talent. What we want to do is start managing our own contingent workers. We recognise that contracting is a way of life for many highly skilled contractors who want to work within government. We thought it was a good way of retaining IP and experience if we managed our own contingent pool, rather than losing expertise back to suppliers and having to re-engage under different circumstances and in different ways.
TV: This is an area that is gaining a lot of popularity, and I really want to commend you for this pillar because it’s both innovative and future thinking
GB: Thank you. We’ve tried to be leading edge and this is a perfect opportunity to make change, so we’ve really tried to be innovative and we’ve tried to really understand what’s happening overseas and ask: “are there new trends we should be considering?”. We believe what we are doing is leading edge and that it will satisfy us for a number of years
TV: Given that the project is a long term project, how do you keep the momentum going? You have four pillars and you’re through the third; how do you take everyone with you on this journey?
GB: I do a lot of stakeholder engagement, both internally and externally. I talk about the project all the time! I try and slip it into every conversation I have, to maintain the awareness and sometimes to create the awareness. I’m always talking up the benefits, particularly when I have to have difficult conversations with suppliers or hiring managers. I’ll say “so when you implement the VMS, this problem will be solved” or, “the MSP is likely to be able to manage that for you”, or “when we have a pool of contingent labour, this shortage won’t affect you”. I talk about it all the time.
We also have internal communications that we send out, we try to maintain our Procurepoint website, and drive people to look at it. We update the FAQs, we publish lists of our suppliers with their capabilities. We’re always trying to reach as many people as possible.
TV: So in summary, what are some of the benefits of this project?
GB: The biggest benefit is that we are able to encourage SMEs to provide services into government. The other benefit is that there is a greater level of certainty for hiring managers when it comes to terms and conditions. Additionally the ability to provide information back to hiring managers and back to industry about:
- who is doing what
- who are we buying from?
- what are we buying?
- how much are we spending?
I publish figures on a monthly basis for public disclosure – suppliers really like this as it allows them to understand where they are positioned; it gives suppliers an awareness about where the spend is and what it is on. It also gives hiring managers a feeling of comfort that they have huge choice.
TV: Why is choice so important?
GB: Hiring Managers want choice. They want to feel like they’re making an informed decision, they want to feel that they’ve had the opportunity to test the market. Good procurement process says that they should go out for three quotes; now they have a huge selection and if there are suppliers who are not prequalified we encourage them to become prequalified. Managers do like that, they want control.
TV: So you’re essentially creating an online services platform for the NSW Government that hiring managers can select from at whim, based on a free market?
GB: Yes indeed.
TV: This is really leading edge!
GB: We believe so.
TV: So we’ve gone through the three pillars, and well done on your amazing journey. Thank you for your time and we can’t wait to see you speak at the contingent workforce conference and hope Sydney play well for you.
GB: Looking forward to it Trevor!
Gabi Bywater will be presenting this case study ‘A New Approach to Contingent Recruitment by the NSW State Government ‘ at #CWF2014. To participate in Gabi’s session, register here.
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