With Melanie Forbes, APSCo OutSource
00:00:00 - Starting out in outsourcing
00:06:30 - The importance of workforce and adapting to outsourcing
00:17:40 - Understanding the differences between staffing and SoW-based outsourcing
00:23:00 - Outsourcing as an opportunity for staffing businesses
00:32:00 - Why APSCo OutSource: collaboration, discussion
00:46:00 - Defining outsourcing best practice
00:54:45 - Views on the major current market influences on SoW and outsourcing
01:08:00 - What's the global outlook for APSCo OutSource?
Jonny [0:01]: Okay, we're rolling. Excellent. Welcome to Mel Forbes. Thank you very much for joining me. How are you?
Melanie [0:09]:I'm very well, thank you. Very well, indeed. Official launch of the new company tomorrow, so very excited.
Jonny [0:16]:And I really appreciate you taking the time to come and chat to me today because I know you've got loads to do. But I think we've got some really interesting topics to talk about. Obviously very pertinent to what you're doing with the launch of APSCo Outsource. We can discuss the growth of outsourcing. That's one of the things that I really want to talk about today. Also the impact of outsourcing, the impact it's had on the workplace, the impact it's had on the recruitment sector. I know you've got huge amounts of experience on that side as well.
And before we get into that, it'd be great if you could just give a quick intro on your background and your journey to where you are now with the launch of this business, and also just a little bit about the kind of motivating factors around what you do.
Melanie [0:57]:Okay. So I've been in the recruitment industry for 30 years and I very much started in traditional staffing and I knew very early on that traditional staffing was never going to be my long-term career. And that's because back then 30 years ago, the element of sales, getting on the phone, bang, bang, bang, you know, 50 sales calls a day, it was a very different mentality to what I know it is now. But I realized that I was all about building the relationship with the customer, you know, really supporting the customer with what they were trying to achieve and so fell into outsourcing literally after sort of 10 years in Manpower. And when I went into outsourcing, it was very much the days of gone of looking at a customer with a pound sign above their head and a candidate.
It was very much about the client has a problem, we need to fix it. And it was, you know, you just started to take on a much more strategic relationship. And I realized, wow, I love the recruitment industry, I love the customers, I love the candidates, I love what I'm doing, but now I don't have to do that type of sales. It's all about service, service, service. This is my home; this is what I love. When I realized as well that I always said I would leave the recruitment industry in a better place than I found it because very early on, we had a quite poor, you know, reputation. It was probably as bad as double glazing salesman and you know, and alike. And I think the industry as a whole has professionalized itself quite well and it's got a lot better in how it delivers its services and products.
So outsourcing for me began about 20 years ago particularly in managed solutions, so the contingent workforce, large scale. I've had the wonderful career of being able to work with some amazing customers. And really just, you get such an insight into how those companies operate their culture, their people. I've also had some horrors as well, along the way, as you can imagine. But that's just all in the learning. So actually, I found that through all of the ups and downs of my career, landing with APSCo now is kind of made me think, well, do you know what? You always set out to leave the industry in better shape than you found it.
If you're working for a trade body in part of the sector that you absolutely love, then you can influence best practice quality, you can support us raising the standard innovation evolution of the recruitment industry as a whole. I'm actually probably much better placed now to really do that and influence and impact that. So yeah, that's kind of, you know, full circle. So officially I've worked for APSCo Outsource now for one— Yeah, it's coming up for the first month. I joined on the 4th of January.
Jonny [4:19]:And so that is super exciting. But along the way, you've worked for some big players in the recruitment industry. You've got fantastic experience. You've worked with Guidant within the Impellam Group, AMS, Rullion, and obviously Manpower Group early on.
Melanie [4:36]: Yes.
Jonny [4:36]:But in terms of the— Sorry, carry on.
Melanie [4:39]:No, I was going to say the grounding that Manpower gave me, I always said I'd be forever grateful to Manpower. Because the training of being a rookie, you know, I was 19 years old when I joined Manpower and I didn't know a thing about recruitment. So the training and support that they gave me, which enabled me— You know, we joke about it still with the people in Manpower that I think I was the youngest branch manager, I was the youngest regional manager, but they saw past anything like that. They just, you know, pushed you on, do what you can. And yeah, it was great. And then when I went into outsourcing, which was first with Advantage Group, so Advantage xPO, again, you know, I'd never done outsourcing before.
I remember the first program I ever come across. It was vendor-neutral. And I remember saying to the CEO at the time, what do you mean vendor-neutral? What is that? And he said, well, you don't fill the jobs. You know, we manage the service, but the supply partners fill the jobs. And I said, what? So you never actually place a candidate directly? And he said, no, it's vendor-neutral. And I said, oh, that's rubbish. It will never catch on. It just won't happen. He still kept me hired actually. Funny. So but—
Jonny [6:07]:But he didn't push you into the role of futurist.
Melanie [6:11]: No. But the operating models changed hugely over that time. And I know we're going to touch on some of that. So I've seen it evolve, you know, massively over that time.
Jonny [6:24]:And I'd imagine, you know, you were talking about the insights that you've gained from working with the end customers and just in looking at how they operate and that must've given you an incredible inside view into just the importance of workforce within these larger organizations. Have you seen that change much over the years? Or in terms of just the importance, do you think it's got more important or is it just, it's always been a fundamental factor?
Melanie [6:52]:I think the step change that I've seen is it's always been important. And if you look at any CEO's annual report, they always have on their annual report, something around the fact of people are our greatest asset. We are what we are because of our people. And I've been seeing that in annual reports for many, many years. And I've actually found in the last probably 10 years that when they say it, they actually now mean it. And I don't mean that they didn't mean it before, but you could never marry up what they were doing to really demonstrate it and live and breathe what they were thinking.
And I remember on, you know, some research that I think it was Staffing Industry Analysts did, and they asked CEOs what was the thing that was keeping them awake at night? And it was all about, you know, candidate experience, traction, keeping their people. And then when you dig into some of those organizations, they really weren't doing anything practical to address that challenge. And obviously, up until very recently, we've been in a market where there's been huge candidate shortages. I remember going to a presentation and somebody saying, you know, there's a war on talent. And I was like, no, there isn't. The war on talent's over. The talent won. You know, it was as simple as that.
So I've seen all of that sort of change. And yesterday I think they reported that unemployment is up to 5%, which is the highest it's been for a decade. What I love about the recruitment industry is we'll adapt to that. We'll find the opportunity there because we always do. I've been through, you know, because I'm old, I've been through three recessions now within my recruitment career and we just adapt to change and I love it. We're just so agile as an industry. Because we have to respond to our clients, we have to serve our clients what they need.
Jonny [8:53]:I could not agree more with regards to that adaptability. And I think it's interesting when you're talking about the shift in the importance that companies place on their workforce and what they're genuinely doing about it. I mean, if you look at the shift in workforce patterns over the last 60 years, in terms of going from job-for-life transitioning through to right where we are now, where the gig economy is getting more important and more relevant, there's different workforce models springing up. You know, remote working is obviously massive at the moment, outsourcing is obviously something that's growing hugely. It's really changed over that time. So companies have had to adapt in their approach to how they address their permanent employees and also how they address their extended workforce and how they—
You know, I think there's incredibly fascinating changes going on about, you know, how employer brand is relevant and how employer brand is relevant to making sure you can get stuff done. Because it's not just relevant to perm employees anymore, but your contract population and also your outsource suppliers. And there's some fascinating elements of that. But to come back to a point you made about the adaptability of the recruitment sector is something that I've always really recognized. I mean, you know, back to the start of my kind of job board career back in 2000, 2001 when everyone said, oh, you know, recruitment agencies are dead, job boards' going to take over, everyone's going to go direct.
Recruitment agencies, recruitment businesses, I just think are, like you say, it's moved away from just this purely transactional type approach of selling, selling, selling, selling to, I think recruitment organizations are very, very effective problem solvers. And they will maintain areas of expertise within their organization and then they'll apply that to the organization. And I think when you look at outsourcing, what's your opinion? I know it's kind of earlier stages compared to the rest of the recruitment industry, but in terms of that problem-solving mechanism, do you feel that recruitment businesses are already adapting to that or have already adapted to that?
Melanie [10:51]:I think it's a mixture. You know, I still am astounded when I meet, you know, founders, managing directors of organizations where they're staffing companies and they're still banging the phones like we used to way back when. And I'm like, does that really work for you? How can it work for you? I was told a long time ago that recruiting agencies wouldn't exist today and yet there are what? 35,000 in the UK alone. So they're still here. But I think they have changed a lot. There's still some that do it way back how it used to be done but most don't. And the reason that outsource providers had to come at their customer in a very different way, they had to be distinctively different from their— You know, because most of the clients before they went to an outsource provider, would use multiple agencies and they used to feel—
I remember one of my early customers telling me that they used to feel that they were being ripped off by agencies. And of course, the outsource provider, when we first started out, it was all about cost savings, saving the money, fixing the problem, supporting the client strategically. So the balance, the shift was quite considerable. Then as the outsource providers started moving through and understanding that to get the best talent they needed supply partners to support them, and to get the best out of their supply partners those very same recruitment agencies needed to be treated well and developed so that they could see the customer in the same light. So then they started to move to having really strong supply partner relationships.
And I was very fortunate that I was in a position at that time where, you know, we created a fantastic supply partner program. And I've seen now, you know, many other outsource providers, you know, do exactly the same because they recognize that you can't direct fill everything if that's the model, you need supply partners to support you. And the recruitment agencies that are in those supply positions have recognized, right, this is different. This isn't just about putting a bum on a seat. This isn't just about how transactionally we might have performed before. We've got to change the way that we do this. And alongside that, of course, the way you attract people to your organization or to your customer's organization is so different.
You know, I come from the time when you used to sit, you know, in a branch on a High Street and people would just come in the door and you'd register them, because, you know, I'm so old in that vein. But, you know, now it's totally different. And in outsourcing, for a long time, we've been saying to the customer, it's about your brand, your candidate experience. So it's not good enough if you interview and you don't go back with feedback, it's not good enough if you, you know, reject with no understanding of how that person learns from the experience for the next time they're interviewed. So it's been a massive, massive education.
And customers for a long, long time use to, and I've had customers say that, well, why do we bother doing that? They're only a temp. You know, they're not going to be here permanently so why are we bothering? And it was only actually, as I started to work alongside some of the big retail brands, that suddenly the clock, you know, sorry, the light bulb went on and, and it was, no, these are your customers. And the big banks got that really quickly. You know, these workers that are coming in, they might not be permanent, but my God, they're your end-user customers so you better treat them right. So yeah, I think it's evolved massively.
Jonny [14:53]:I always find it interesting. I think it's very much calmed down these days. But where you saw this kind of conflict within some recruitment organizations between the, just the flat out, straight up recruiting part of the business, that generally was kind of the big cash cow versus the outsourcing arm and the growth of those and how that's balanced out. Do you think that's less of an issue these days?
Melanie [15:17]:No. I think it's still an issue. But it's different types of people so— [barking dog].
Jonny [15:24]: Come on, introductions. Who's that in the background?
Melanie [15:26]:That's Mabel, who's a five-month-old puppy and she just doesn't understand Zoom.
Jonny [15:32]: What type of dog is Mabel?
Melanie [15:34]: She's a Tibetan Terrier.
Jonny [15:36]:Oh,I'm trying to remember, is that quite long-haired?
Melanie [15:40]:Yes. You can have them very long-haired. We're not, we're keeping her short. But a medium-sized dog, very full of fun and mischief. So yeah, she's keeping me on my toes. If the postman comes, unfortunately, which is what just happened, that's what happens. So—
Jonny [15:55]:Standard these days.
Melanie [15:56]:Yeah. So I think... Sorry, Johnny, I've lost my train of thought there. Where were we? Yeah. That conflict. Yeah. I think it still exists. But, actually, if a recruitment company looks at it through a wider lens, they can see that in their people, they have people that love themselves, love the more traditional ways of recruiting, and they will also have the people that love the service element of their business. They will service the candidate and the client, you know, literally to death. And so there's a place for both. And so these organizations that have got their act together, they've separated, but they still come together. But they've separated their divisions within their business and they reward differently. That's the secret here.
What I used to find a lot when I was talking to my supply partners is they used to say, well, when we supply into outsourcing to you guys, we have to lower our margin. And obviously over in this part of the business, we can charge full margin. So they used to say to me, you know, we struggle to make money. And I was saying, well, how are you paying and rewarding your people that work in the division that supports the outsource providers? And when they said the same way as we are for the, what we'd call 360 recruiters, I was, yeah, that's madness. So a lot of the conflict was all around reward. But when you swap the reward and how you pay and reward out, then organizations can make it work.
Jonny [17:39]:Yeah. No, I agree. I think if you look at the provision of outsource services, another element to that is that it's getting more mature all the time, in the sense that I feel like it's moving from transactional to trending towards strategic. So it feels like, within the journey that you've just described, there's still a way to go. And there's always going to be horses for courses in terms of the type of people that are good at fitting into the different elements of how that business operates. But I think that also applies to the way that organizations are looking to get work done, in the sense that they have more options now, probably than ever before and there are some emerging areas within outsourcing that organizations are still trying to adapt to and take on, like, for example, statement of work or services procurement.
If you were going to kind of define how you guys describe outsourcing or how you kind of package it up or segment it out and the differences between outsourcing and staffing, how would you kind of bracket that?
Melanie [18:44]:So that's quite a tricky one. I think it's where the client basically gives you control over the end-to-end elements of recruiting for them. And obviously, very clearly there's two types. So in RPO, it could literally be from managing any traffic that comes to their careers website, you know, the part of their website, their careers microsite, and literally right the way through to onboarding them, ready to start work with that organization permanently and everything in between. In managed solutions, in contingent, it's where the client has, you know, a contingent workforce of X and they don't want to be responsible for managing it, for replenishing it, for, you know, new roles, new projects. And so they literally want to lift and shift it out to their organization, or the recruitment agencies that work with, obviously their contingent workforce. So that's how I define those sorts of outsourcing elements of particular programs.
Of course, there's project RPO now which is where a client might just have a large project of recruiting 50 people, 500 people, and they don't have the in-house capability to do that. So they outsource it, but it's just for that period, or it's just for that number of hires and their in-house team stays whole and manages everything else. And then, of course, you touched on statement of work. This has been around quite a while but still, it feels so new to the market. And I think it's because for a long time there's two types of statement of work, I always felt, Jonny.
There's true statement of work whereby if we tested it, it would be compliant, it would be, you know, I'm not just thinking from a contractual point of view, but I'm thinking from, you know, the milestones, the outcome-based, you know, the way that it's paid for, the way that it's managed versus what we used to call disguise statement of work, which is really to move headcount from one place to another and where, you know, it was labeled as something different so that somebody could get some work done without it being widely seen. So I think there's a mixture. In my view, anything, where the client wants to lift the problem up and move it somewhere else, is outsourcing. You are outsourcing something to somebody else to take control and responsibility of.
Jonny [21:49]:Yeah, exactly. And I think, you know, the way that you describe it through the APSCo Outsource literature as effectively encompassing MSP, RPO, statement of work, and outsourcing, I think, you know, covers it extremely well. And yeah, you know, when you talk about statement of work, it has been around for a while. And actually, the management of statement of work is a big problem or management of services procurement is a big problem for a lot of companies but really only feels like the last 12 months, the last nine to 12 months have really driven the growth in the urgency around managing that. Various factors; we'll come on to discuss some of them later, but obviously things like COVID massively pushed outsourcing.
But as you say, there are other things like, for example, where you got that hidden headcount, body shopping, you know, fake SoW, call it what you want, you know, and that is a real clear issue now for companies in the UK, as we come into the IR35 reforms. And whether it's getting around a headcount freeze, or whether people have got different sign-off capabilities and they haven't got any sign-off for, you know, a contractor, but they can stick in a project as a consultancy. I think there's some really interesting elements to that.
But again, it's a learning process where, from what I'm seeing, you know, I think recruitment organizations are having to react and adapt to this. And what generally happens at these kinds of inflection points is some people within the market will say companies are just going to sort this out themselves, recruitment companies, it's going to be outside their remit, they won't be successful. But, you know, if I take note from what I've seen historically, generally, whether it changes, recruitment organizations adapt far quicker than end organizations.
And as you say, from their point of view, if they just want to say just take the problem away, whether it's based around IR35 and finding a different way to get work done, or whether it's based on, you know, looking at a genuine full services procurement problem and saying I need to get my arms around that, I need to understand ROI and, you know, what I'm spending and what I'm getting, that's a big strategic decision. But it's something that if they decide to outsource that problem, if there's someone there that can come along and just offer a solution, then a lot of companies are going to take that route. Not all of them obviously, but I feel like that's the next major opportunity for evolution and adaptation within the staffing sector. Would you agree with that?
Melanie [24:20]:Yeah, I would. I think I saw in the McKinsey Report that they're calling this the fourth industrial revolution, because the ability for everybody to work from home, you know, or as many people as possible to work from home. You know, I had a friend who worked at one of the big banks, and they were told you will never be able to work from home, you know, security, you know, et cetera, et cetera. It just can't happen. And yet, she's very senior, she works from home, right? You know? So that's why I think this whole revolution of how work is getting done, it's massive, but it is a clear step change. And therefore, I don't believe it can go back to the way it was. There's no need. Why would you? Why'd you want to do that?
So where I think recruitment agencies more so are probably a little more hesitant within the statement of work arena is they recognize that there's a lot of responsibility and potentially liability to take on in that arrangement. If you think of outsource providers, they've been taking on responsibility and liability for years, you know, huge liabilities, all contractual so they're very familiar with that model. So I think they will be able to deliver it to their customers a lot easier, but we'll have again, recruitment partners to help them. I think that's how it will probably flow.
Jonny [26:06]:Interesting. Yeah, I mean, we're seeing different things in the market in the way that large recruitment organizations are approaching it and some of the kind of mid-size and smaller ones that are very nimble and they're kind of moving up and down the value chain in the sense that some people are offering project services. And that might even be quite small, maybe very specialist recruitment companies start moving into having a PMO function and offering project services. And then you've got the larger organizations that are offering the full management effectively, an MSP for statement of work or for services procurement for us at the kind of top-level. So it's a very interesting transition.
And as you rightly pointed out, it's fundamentally about getting work done and it's just those pragmatic business decisions that need to take place around what is the most effective use of our resources? You know, how do we get things done? What different channels have we got? And statement of work or services procurement is just an additional channel. It feels like it's a newer one but it's not. But it's being utilized more now. I mean, you talk about remote working, you know, how are people tracking what gets done? It's quite an interesting question when you get into the, you know, the idea of suddenly loads of people are working from home. And you might see it there on Teams, they're active on Teams, but that, you know, you don't know what they're doing.
So, you know, do you go into a sort of a surveillance state of trying to capture that? Or does thatpotentially, that factor, push more towards outcomes and actual deliverables where you can say don't really care, you know, how you do it as long as you do what I've asked you to do on time at the right budget and, you know effectively delivered? So I think that SoW's broadened its scope in the sense that, you know, services procurement and SoW's been around for a long time, but now it's being more widely used as like a work delivery mechanism effectively.
Melanie [28:03]:Yes, I totally agree with that a hundred percent. And if I was in that situation, I'd much prefer the outcome-based management style than one of surveillance. I don't think anybody would want to be in that environment.
Jonny [28:17]:Exactly. I mean, you know, judge me on what I do and what I've delivered. And it's interesting when you look at some of the gig marketplaces. So I've spent some time working in that sector and you know, with some of the kind of, you know, lower level global gig marketplaces that generally like repeatable, generally lower-skilled tasks done very cheaply, quite often in low-cost locations around the world. You know, some of them, I don't know whether they still offer it, but there certainly were options for things like screen capture. So you could basically kind of like check in on what the person is doing and check in on the hours that they put in and all this sort of thing. So that does feel a little bit weird to me.
But we had this rapid period of development in terms of the way the workforce operates. It was massively changing with things like Uber delivery, this kind of blossoming of the gig economy from about kind of 2012, 2013 onwards. And that was really starting to accelerate. Governments were trying to get on top of it. You know, the UK government was looking at this with theTaylor Review. You had, you know, lots of stuff going on in the US where they're looking at employee versus self-employed. And then you get the ultimate game-changer of COVID, which...—
You know, I had a conversation with one of the guys at Staffing Industry Analysts when the first lockdown kind of kicked in, and they were just saying that it'd be interesting to see how this plays out in terms of the adoption of, for example, workforce technology, because the 2008 recession caused a massive spike where there was a huge uptake, for example, of VMs technology. And now that we're in this situation, you know, these sorts of changes are often adapted to from a tech point of view. So, yeah, I just think COVID has been the ultimate step change.
And as you say, things may never go back to the way they were. Why would they, if there are efficient ways to do things that we never thought were possible, like loads of people being remote, doing video calls all the time? I mean, I think a lot of companies are just realizing that actually, it's perfectly doable. There was some adjustment, but...
Melanie [30:26]:Hmm. I think the biggest challenge has been that we've been very slow to roll out decent fiber across the UK. And that's been very evident with, you know, how many times have you heard, oh I've got a bad connection, or my signal's not great? And I, you know, unfortunately, live right out in the sticks. So even though my husband works for BET, you'd think that we'd have the best broadband and we've probably got one of the worst. And again, a very good friend of mine has launched a whole new business on the back of this situation because remote working has shown that we need more people rolling out fiber. And she set out to create her own recruitment company specializing in fiber optics and how we get broadband out to all the homes based in terms of corporate and domestic but mainly domestic.
And she's, you know, literally overwhelmed with opportunities right now because, you know, the network providers need to get this rolled out quicker, which again, is another signal that they know we will go back to the offices, but not in the same way as we were before COVID. I just don't think that will happen.
Jonny [31:39]:Yeah. I mean, it's, you know, I definitely can still see the value in teams being able to get together for specific meetings, workshops, for people to have the facility to go into the office when they want to, and then work from home when they want to. Because everyone's had to just get on with it. But clearly, for a lot of people, it's been inconvenient, whether it's kids or pets or whatever it might be, commute, there's pros and cons to either side of it. So I think the ultimate balance is just having the flexibility of being able to get together when you need to. So I think a lot more flexible kind of workspace-type stuff will become more the norm. But you guys with regards to APSCo Outsource, why is now the time? Is it these kind of events have kind of precipitated this? What's the driving factor? You've got the launch. The launch is tomorrow, isn't it?
Melanie [32:29]: Yes.
Jonny [32:30]:How's the timing worked out?
Melanie [32:33]:I think it's something that APSCo Global have been deliberating for some time because the outsourcing market has grown so much over the last 10 years or so, and is continuing to do so, despite COVID, despite, you know, Brexit, despite IR35, all the things that are the challenges that we're seeing in the economy. Outsourcing is again, predicted this year to grow by another 18%. So, you know, it's still growing and it's growing different kind of legs in the process. So I think APSCo Global had already talked about this and was something that they thought actually it's such a huge part of the recruitment market, we should have representation, not only from our members, from a trade body perspective to support guide quality, as I said earlier, raising standards and so forth, but more around lobbying.
You know, APSCo is a very active, political, lobbying organization. We challenge policy. We are consulted on policy with government so we need to represent a part of the industry that's huge and growing. So, yeah, it was just one of those things that the staff started to align, and the CEO, Ann Swain of APSCo Global spoke to me and said, you know, what about now? And it was just, yeah, it just felt like the right opportunity at the right time.
Jonny [34:16]:I think it's very timely. And I think with everything going on and the sort of market forces that you described, now's the time for action. Because there are various factors that force people, force companies, and force individuals into action to deal with things that otherwise and previously can be ignored and just left. So it's a massive time for change, a massive time for action and activity. So tell me a little bit about how, for example, the dialogue with government and also industry organizations and also the end-users within big customers, how are those dialogues going to kind of come together for the furtherment of betterment of this industry?
Melanie [35:06]:So I think in terms of, it's having a structure to all of the different outlets. So we have a representative committee for outsource. So it's 10 members of organizations that have, you know, outsourcing services. They're either CEO, MD, senior director-level people. And they have obviously their own feed from their businesses and their end-user clients that they're bringing. So we will meet bi-monthly and they will help drive that agenda. They effectively become my bosses, the 10 of them. So it's quite interesting for me. I've gone from being a competitor peer of them to now them being my bosses. So I'm sure they're going to love that so—
Jonny [35:55]:Hopefully there weren't too many bridges burned along the way.
Melanie [35:59]:No. I've learned that in this industry, Jonny, it's too incestuous, you can't do that. So I hope that's why I've lasted this long in it. So we're going to meet bi-monthly and start to drive that agenda. My overall members, we will meet also bi-monthly and start to bring that conversation together. Within our innovation and leadership events that we'll hold quarterly, we are inviting organizations such as CIPS, such as CIPD, such as end-user customers to those meetings, those events so that we can hear it firsthand and join the dots. We are very fortunate in APSCo. We work with an amazing public affairs company that support us.
But again, that policy group, they also meet twice a year and we tend to meet at the beginning of the year, in the middle of the year. And at the beginning of the year, we start to look at, okay, so what policy changes have come in? What policy or legislative changes do we need to adapt to? How can we better support our members? So if you can imagine, you've got these, you know, real open lines of communication all coming in, and they're going into a big pot almost, that's the only way I can describe it, a big cooking pot, where we can then understand the most pressing things.
What I have found, so it's an example, it's just something that I'm very aware of; that if you're an outsource provider and you're very fortunate to work with government indirectly as a customer, government are very good paying you. They're good payers. They pay on time and sometimes the payment terms are as good as, you know, once a fortnight. And obviously, recruitment providers enjoy working, you know, and do those sort of payment terms.
However, in the private sector, it is not unusual for a managed solution provider to be pushed upon 120 days or 180-day payment terms. You know, you are effectively becoming that end client's bank and I don't really feel that is fair. It certainly is something that I think affects the way that that organization works with that end-user client. You know, somewhere along the line, somewhere in that procurement process, those sort of payment terms has to be a paid-for somewhere in the transaction. So—
Jonny [38:34]:It's squeezing the balloon basically.
Melanie [38:37]:It is. Very much so. So it's things like that, that we want to be able to challenge it. Things like that. So for a small, you know, a small, medium-sized organization, you know, they just can't sign to that. They just can't cope with that sort of a squeeze. So—
Jonny [38:56]:So the end client might be— Sorry. It was just to say, so on that subject, you might have a situation where the end client is squeezing so hard on things like that, that they're missing out on the supplier diversity or the agility of maybe slightly smaller suppliers. And ultimately that's not really benefiting either party.
Melanie [39:14]:No. No. And if you think, the government, you know, actively encourages small and medium enterprises. They've pushed that agenda well and truly. And the whole DNI piece, which is found in these pockets sometimes of organizations that our end-user clients really want to work with, but then you're putting barriers in front of them from the get-go, you know, before we even get going. So it's things like that, that I want to be involved in influencing and changing. So there's many, many more, but they're the sort of, you know, things that we're going to get involved in.
Jonny [39:50]:And in terms of the type of stakeholders that you're going to be getting involved from the end-user clients, is that going to be more procurement? Is it a crossover between procurement and HR? What sort of functional divisions do you think you're primarily going to be putting in on that side?
Melanie [40:08]:It will be both. It will be, you know, from a procurement standpoint. And that's why it was really, really key to start collaborating with organizations such as CIPS so, you know, challenge influence, educate. So that's that, you know, the procurement network within CIPS. But also direct, you know, I've worked, as I said in the industry for 30 years, I've amassed lots of clients in that time. Some actually are really good friends of mine now. But before I took the job with APSCoOutsource I spoke to them about, you know, my vision of what I thought Outsource could become. And I said very much, I want the end-user customer in the room so that everyone can hear this and understand it.
One of the things that I want to be very clear around is keeping pace with our end-user customers. Now that doesn't always mean going faster than them. And equally, obviously, you don't want to be slower than them, but actually at pace with them and also driving some of the pace. So in that time, when I look at the clients that I have in my network, they are across so many different sectors, but they are predominantly in, you know, HR director level, procurement, again, director level, but also some areas of key delivery. So where you've got, you know, delivery directors of programs on the client side, you know, those types of individuals. So we can really get a cross mix.
Jonny [41:46]:Yeah. I was going to say, when you look at the operational side of it; delivery, you start getting more into outsourcing, you know, particularly areas like where it's project-based or deliverables-based. That really starts knitting into the fabric within those organizations of how program management, how it actually gets delivered, the real operations of that actual organization. And I think that's going to become something I think that will increase over time. But I think when you look at it purely from a procurement perspective, I think with everything going on at the moment, I think the importance of procurement has never been higher from a strategic point of view. You know, organizations everywhere are looking at how they can cut costs and be more efficient.
But also there's no point in just cutting costs for the sake of it. You know, it's about driving return. If you're spending something and it's delivering something fantastic, do more of that, please. So procurement needs to take more of a strategic role. And I know that, you know, most senior people within procurement and well, anybody within procurement wants to be more strategic. They don't just want to be stuck in a transactional scenario because they can really bring that stuff. That given, you know, the seat at the table and the opportunity, they can really bring that stuff to the surface and feed that into CFO, CEO, whoever it may be to help drive the overall strategy. So I think being able to bring procurement leaders into this conversation alongside operational people and HR people is going to be critical to moving it forward.
Melanie [43:19]: Yes.
Jonny [43:21]:And in terms of interactions with trade bodies, like you mentioned CIPS, what do they see as the kind of opportunities and the motivating factors around what they can do and what you can do with them in this sector?
Melanie [43:37]:Well, so we're in early conversations. I'm talking to the chairwoman of CIPS and, you know, Shirley and I have had a couple of conversations and initially, I think it's— So I'm coming at it from the point of probably challenging some bad buying practices and Shirley's coming from it from the point of actually allowing, you know, procurement to hear and understand, and also receive that challenge directly. So before I was part of APSCoOutsource, obviously I was working for some of the major global outsource providers and I used to try and get some sort of traction with CIPS. I wanted to have a relationship with CIPS and they wouldn't ever let me near them because obviously, I was working for an outsource provider. But directly, now I'm in the driving seat of a fellow trade body, I'm allowed in.
So I'm liking the access to all areas, all of a sudden. So I'm looking forward to really understanding how we can work together. It just feels like I know this is the right sort of start. It's just like collaborating with, you know, SIA as an example. You know, it's highlighting, you know, key organizations where Outsource can really collaborate and work together to be a force for good for the sector. So that's why I'm sort of concentrating on the moment on how we work with CIPS, how we might work with CIPD, how we will work with SIA. And then another organization I've been introduced recently I'm so excited about is a company called Positive Impact Commerce which is, you know, really around the people, planet, society, and ultimately profit, but how.
So it's really positive capitalism. So capitalism doing what it should do, what it's designed to do. So these are the sort of other organizations I want to bring to the APSCo Outsource party for my members and I to really understand and, you know, start to, as I say, collaborate and influence as much as we can.
Jonny [45:57]:Yeah. And I think it's a fantastic opportunity to bring the dialogue together with these different parties that, you know, they may not get the kind of opportunity to discuss these type of things outside of a live situation. You know, if it's a live situation where someone's already a customer, or there's someone selling into somebody else, everybody's got their guard up and, you know, there's different motivating factors in there. But just to be able to have an open discussion, there are clearly going to be better ways for everybody to work together that work to everybody's advantage. So I think that's really, really exciting.
I think another area that has hugely exciting potential is just around best practice. And I guess this kind of dialogue and what comes out of this and the way that the government are driving things and all of these factors come together, that could help shape what best practice is and what best practice becomes. As a trade body, what do you see is the best way for you guys to contribute to that, to help define best practice and ensure best practice?
Melanie [47:07]:So I think APSCo UK do that very well in the staffing market and they do it through educating. So there's the learning and development side of the business, which showcases best practice. And then, of course, members that sign up to our code of conduct, they sign up to be part of, you know, being— As a member, you will be audited and they agree to that when they sign in to become members. They get audited as a business on a biannual basis. So the same will apply in Outsource. You know, we will mirror some of that influence of our members, because we've seen that that's been a very successful route for the rest of APSCo.
So it will be around that education bit, around learning and development, but also around, we have to adhere to the code, we have to behave in this way. If you don't as a member, then, you know, quite often, you know, if that's the case, then you might not be able to stay a member. So there is an element of compliance, unfortunately, but it is the way of the world that, you know, we want— I think it goes back and people who've worked for me, have heard me say this a lot. You would always be judged by the company you keep. And I want APSCo Outsource, our members to be like-minded people.
You know, those members are competitors of each other, but when they come together, the competitive piece needs to go so that they can allow us to just get better within the industry that we operate and, you know, be judged by the company you keep. You know, I want us to be able to say, you know, come and join APSCo Outsource, you'll be in good company because these organizations do it right and they do it well. And so I think that that's really the vision for it, of ensuring that we get the providers signed up to that from the get-go.
Jonny [49:19]:Yeah. So it's really all about setting standards, setting reasonable, you know, forward-looking standards that help the industry and help every stakeholder for it to be the best it possibly can be. And then, you know, everyone being held to account of that effectively by the organization, by the trade body, by each other, by themselves. How do you see that working? Or what do you see is the kind of evolutionary path towards that in more sort of emergent areas, like statement of work, for example, where it's, you know, it's a lot earlier in the journey? How do you see that playing out in terms of kind of best practice in areas like that?
Melanie [50:01]:Again, I think any of the solutions regardless of what the solutions are, they need to be compliant, they need to be first and foremost legal. And you'll be surprised, well, you won't be surprised Jonny, you know that there's people out there who try and do these things by cutting corners and not having the, you know, the right contractual obligations outlined, the right way of working. And so I think initially it's in areas such as statement of work. It's first of all, making sure that the process and the tech platform, as it were, because most of these things now, well pretty much everything I can think of in the outsource world is underpinned by some technology. And so then there must be a way within that technology of making sure it's legal and compliant.
So, you know, once that element of it is done, then I think it's more a case of allowing that part of the market to continue as you've seen, started to really flourish now. And it is growing at quite a rate. So allowing that to happen, but always having that check and balance that it's still, you know compliant, it's still doing what it should be doing and it's legal and so forth. So not just ways around headcount as you called it earlier, I think you said fake SoW, you know?
Jonny [51:39]:Yeah, yeah. Hidden headcount, rogue spend, you know, people body shopping, many different names. But yeah, I agree. And I think if you look at IR35 as a driver of change and a driver in the growth of the use of statement of work as a work delivery model, you know, people have to look at it in the right context. Pardon me? So statement of work isn't an IR35 solution. It's just another way of getting work done. And ultimately the question should always start at the beginning of what's the most effective way to get this piece of work done? It could be that it's a permanent employee, it could be it's a contract or a temp, or it could be that it's a genuine outsource project.
And you know, as you say, tech providers like ourselves, you know, for us, obviously just specializing in statement of work, there's a responsibility to make sure that our technology is structured in such a way that it supports the correct delivery of that work mode effectively. But there's also a responsibility on the end client, but also very specifically on the intermediary. If an intermediary is involved in facilitating that process, they will generally take potentially some liability for delivery. Although obviously in a lot of cases, that's back to back with the supplier where an MSP type situation is involved.
But they will also quite often take a hand in advising the client around the contractual side of it, which is one thing, how they package up work effectively if they want to get it delivered under an SoW, which has to be done properly, but very crucially, making sure that the actual delivery is in line with the way they've said they're going to deliver it, in the sense you can't just create a statement of work and then have someone say, yeah, that's great and, you know, do the work under a TNM type of situation. So I think there are definitely checks and balances that need to be part of the discussion. But with legislation changes like IR35, that's just making everyone smarten up their act and everyone makes sure that they're doing things properly.
Although having said that you still see stuff going on in the market where you sort of think, you know, you see these kind of quick fixes come in and you just think some of that stuff's going to fall face down when it actually comes in.
Melanie [53:53]:And we've invested heavily at APSCo in our legal help desk. And our legal help desk has received no end of questions and queries from organizations around such things as, you know, how certain things get done or they've done something a certain way and that's created a dispute. And Outsource, from tomorrow, we will launch our own legal help desk to support our members specifically in the outsource sector. Because you do find the sort of things that come up in that arena are slightly different to staffing. So we will have that. And then we have other services aligned to that, whether that be on immigration or accountancy or, you know, those types of services that will all be available once we launch tomorrow.
Jonny [54:47]:That sounds brilliant. So you mentioned immigration there briefly. One of the things I wanted to just get your thoughts on really was just the impacts of some of the big factors that we're seeing at the moment. So obviously COVID's the giant one and that's impacting everybody, but there's also obviously IR35, which is a real hot topic at the moment. But Brexit kind of almost slipped under the radar a little bit. What's your view on the kind of individual impact to those three things and also the combined impact of them all kind of happening at a similar time?
Melanie [55:24]:Oh my God. Jonny that's—
Jonny [55:25]:Apart from just the word chaos.
Melanie [55:28]:Yeah, but I've always said the recruitment industry performs at its best during chaos. It is one of those—
Jonny [55:38]:It's the type of people that work in the industry. They love the chaos.
Melanie [55:40]:Yeah. It is. We love chaos. We love a bit of chaos. Chaos creates opportunity. Definitely. So it's a bit like you asking me, you know, how do you eat an elephant? And I'd say one bite at a time. And that's how to me, COVID, IR35, Brexit all feels. It's just like this enormous elephant that's going to have each individual challenges. So I think the output of COVID will be, as we've started to see, high levels of unemployment or higher levels of unemployment and a candidate marketplace that needs to build confidence again. I do think there are certain sectors, certain working environments that will change forever.
And when McKinsey called it the fourth industrial revolution, some of the leaning in there is around people potentially totally re-skilling because their jobs just won't exist in the future. And you think of the High Street, you know, retail environment where those roles just won't exist to the level that they have. So those people need to rescale and do other things. I'm pleased to say, I believe there are opportunities out there for that to happen. So I think it's then how do you make use of drawing down the underutilized, apprenticeship levy, things like that, to drive that to happen? So I think COVID's going to have— it would need time for consumers and therefore market to, you know, overcome that confidence, you know, to become more confident; the re-skilling element of it.
And obviously, for government, you know, they're going to have to pay back the debt, right? We are going to have to pay back the debt. So how's that going to work? Within IR35, we spoke very early on the agility of, you know, the organizations within the sector and they would look at it as well, we've just got to change. We've got to change the way that we've worked with before and we'll have different models to suit different customers. So whilst it is impactful, I think because the government have gone to go live now what? twice and stopped. And a colleague told me the other day, they'd asked one of the ministers, do you think IR35 will still go ahead? Because there's still some, you know, whisperings that they might pause it again. But no. The minister said, no, it will absolutely go ahead.
But I think a lot of companies, we've got ready for this two or three times, and there's a whole host who've already been through it with the public sector. So those things will happen. With Brexit, you're absolutely right. It's sort of, we talked about it for so long that it was just, you know, constantly on the news, and then suddenly COVID took over everything. And so Brexit sort of slipped under, as you say. However, now, we’re starting to get the questions around visas and immigration, about how we can still keep the workforce fluid. And I think that will be some of the key kind of next steps of Brexit will be, how do we get round some of this? How do we work with this? And that I don't have all the answers to, but I'm very fortunate that I have a team behind me who do have a lot of those answers that I will lean upon to support our members with the next steps of Brexit.
But yeah, just at the moment, I don't know about you, I just look at it and just think it's just a huge elephant. All of it, all combined, it's just massive. What I am pleased to say, which I think will be such a hugely positive thing; so I've sat on the board of the Recruitment Industry Disability Initiative for about six or seven years now and I've been pushing and championing getting disabled people into work. Initially, actually, I saw it selfishly as an untapped talent pool that I could pull upon but also morally the right thing to do. So we've had some great success over the years and more and more organizations are doing what they should do and actually fixing their environments to be much more inclusive.
And what they have found is the whole DNI spectrum is huge, all the different strands. But actually what I found is if you fix your processes and behaviors around disability, it automatically makes your organization so much more inclusive for every other strand of the DNI agenda. So I think this whole working from home is really starting to push down some of those barriers that were put up around disabled candidates. It's leveled that playing field considerably. So I think that's been hugely positive. I also think that because of what's happened, organizations, instead of, you know— Because a lot of them have, you know, huge, great, big glossy marketing spins on DNI and you know, their green credentials and so forth. And now I think, again, it comes back to stop talking about it and actually do practical things to make it happen.
And I've been pushing on around the green agenda for some time. I have felt that that's, you know, something that's going to come back with real vengeance, you know. Again, less about conversation, more about action. And with Joe Biden coming into the US as the president, I think again, his agenda is very much set around that. So that will automatically have a surge on the UK. The government already set out their agenda on it but I think that's going to be pushed even further and they've already announced lots more money into that direction. So some of the real positives, I think, will be the social shift and the dynamics around theDNI, the planet, society, I just think that that's going to change for the real good of, you know, the real better for the country. So I think that's the positives.
Jonny [1:02:09]:It's such an interesting area. I mean, you know, you, can't hoodwink young people coming into the market now around environmental issues. You know, it's a much more important factor for them to make a job choice on, you know, how they view a potential employer from, you know, an ethical point of view around sustainability, or it might be around diversity or equality or any other factor. You know, they're less just about the paycheck. And people are, you know, they're more inclined to look at it from a wider thing of do I want to align myself with this organization? Kind of ties back to what I was saying about, you know, what is a brand these days? And, you know, how you have that employee value proposition or whatever it might be? What your brand means? Because you look at it, you know, what does your brand mean to your permanent employees? That's important.
But contingent workforce has grown massively. Are people really using their brand effectively with contingent workforce? In many cases, I would say, no. But they're starting to, it's much more of a priority. But then you look at the growth of outsource services. Things like SoW. If you're bringing in SoW suppliers, again, the same thing is going to be true. You're going to need to try and get the best suppliers in to deliver the work for you if it's suitable to be delivered in that way. But you're going to need to appeal to them, not just in ways of, you know, paying well or paying quickly or whatever, but in terms of alignment. And I just think that's just a much more important thing globally now.
I mean, I studied environmental biology back in the day when I was at university and I was like, this is going to be massive when I come out of university and college is going to be so important. We're just about catching up to where I thought it might be over time. So yeah, I think it's a huge opportunity. But I also think I agree with what you're saying about COVID in some ways helping diversity and inclusion. I just think it's leveled the playing field. You know, whether you look at it from a disability point of view. So for people that have troubles with mobility, for example, just getting around, getting into offices, offices not being, you know, mobility friendly as it were, if people are working more from home, then that immediately slashes that problem to a much smaller problem.
But if you just look at what COVID has done with a lot of people working from home, I'm here in my loft room with a mini, you know, light shade Mohawk on the top of my head. You're dealing with people in their own clothes, you know, not in their work clothes so much, in their own house with their pet dog barking in the background, or the kids coming up behind and stuff like that. I just think it's leveled the playing field in terms of interactions. I feel like it's much more person to person interactions than previously where you're dealing with somebody and they're hiding behind the big shiny office, the big brand, whatever it might be, the construct around that it's swept a lot of that out of the way. So I think it just levels the playing field in a lot of areas. No matter what someone's background is in any area, it's all about, you know, valid inputs and working together as people. So yeah, in some ways you could say there's real positive potential that could come out of that.
Melanie [1:05:26]:Yeah. I remember, because some of, you know, my influences, if I think in my life, I've had lots of influence throughout my career. But actually, some of my biggest influences have been my children. You know, they're of that age now, you know, my son's going to be 21 next month, my daughter's 23. So they ask the questions, they test that theory. And I love it. That really helps me get a perspective on, you know, the younger generation what's important to them and coming through, as you say, into work for the first time. But I again, when the kids were little, we used to have that saying, didn't you? Inside voice and outside voice. And I remember, you know, saying to the children when I was on a call, no, use your inside voice, shh.
But actually, when I then started working with, you know, big corporations, which I've been very fortunate to do, I've actually used that same term to describe being authentic. And you said earlier, you know, you can't hoodwink, you can't, you know, you can't be fake. They're surrounded by fakeness and they can identify it from a mile away. So actually it's for those companies. Because whatever, their great, big, brilliant marketing, you know, a lot of the marketing process has been automated now, but whatever that brilliant machine is, if you're marketing, which is your outside voice, my God make sure it matches your inside voice. Because, you know, those two things, that's where, you know, you see fake because the two things are not the same.
So, you know, the big corporations that I've worked with and been very fortunate to lead, I've always, you know, told my teams, you know, we have to behave that way. We have to be that. If that's what we want to stand for, that's who we believe we are, my God, then it's the inside and the outside voice; they need to be the same.
Jonny [1:07:25]:Yeah. I think that's a great way to put it, a really good way to put it. And ultimately, you know, if you don't hold true to that, you'll get found out eventually. And, you know, as you were talking about, I can't remember the name of the ethical, I think it was an ethical buying or ethical business organization you were talking about, ultimately these things—
Melanie [1:07:43]:Oh Positive Impact Commerce (PIC).
Jonny [1:07:46]:Positive Impact Commerce. So, ultimately, you know, these things do tie into the success of an organization. You've seen that where organizations, even if they're a supplier, have distanced themselves from other organizations if they disagree with, you know, a political or social standpoint that that organization might have, or maybe them seeing that organization not standing up for something that they think they should be. And even suppliers will say, well, we're not working with them anymore, even if they're one of our big customers. So it all ties in and yeah, much more now than it has ever been, it has to be real.
So yeah, I join with you in that as a positive outlook. I really appreciate your time, we're going to wrap up in a minute, but just before we do, I just wanted to get your opinion on one last thing. And that is, just, if you look at what you're doing, if you look at all the things that you're addressing, and the vision that you and the APSCo team have for APSCo Outsource, how does that fit within the global scenario? What's the global outlook for what you guys are doing?
Melanie [1:08:51]:So we recognize that the UK is not the largest outsourcing market. Obviously, that's North America. But what we were very clear is that APSCo has an amazing brand already and reputation in the UK. So it was better to launch here, leverage from that reputation and brand. But APSCo Global already has operations in Germany, Singapore, Malaysia, Australia. So we absolutely have a global view of this and outsourcing in different levels of maturity across the globe. But interestingly, one area that APSCo Global doesn't currently have a presence is North America. But I have worked extensively within North America and have lots of contacts there.
And also, as I said, it is the largest outsourcing market in the world. So it will make sense for us to push on the global presence sooner rather than later. And so yeah, watch the space, that's definitely going to be happening.
Jonny [1:09:57]:Fantastic. I think it's a huge opportunity. Well, listen, Mel, thank you so much for taking the time. Really appreciate it. Loads of super exciting things going on and I probably better let you go so that you can get everything ready for tomorrow's launch. Good luck with that.
Melanie [1:10:11]: Thank you, Jonny.
Jonny [1:10:12]: And, yeah, really appreciate your time. It's great to chat to you.
Melanie [1:10:15]:Pleasure. Take care. Thank you. Bye.
Jonny [1:10:17]: You too. Cheers.