Grey spend - the messy middle between Services & Contingent Workforce
Grey spend - the messy middle where services procurement and contingent labour overlap, is where value quietly leaks through misclassified work, duplicated outsourcing, and runaway change requests. AI, requisition-stage data, and stronger cross-team partnering are making this spend possible to spot, quantify, and route the right way.
With Linc Markham, Executive Workforce Solutions Advisor
11:09 - What grey spend actually is and why it matters
18:11 - Why it pays & matching work to the right channel
28:57 - Quantifying it & deciding how the work gets done
44:19 - The new grey spend: SaaS and AI agents
51:05 - Breaking silos & partnering for a win-win
Episode Highlights
Transcript
Auto-generated. Please excuse any minor errors.
00;00;00;00 - 00;00;08;19
Jonny Dunning
Okay. Excellent. So, Linc Markham, it's a pleasure to have you on the podcast today. Thank you very much for joining me.
00;00;08;21 - 00;00;13;05
Linc Markham
Great to be here, Jonny. I appreciate you asking and I look forward to conversation.
00;00;13;12 - 00;00;49;10
Jonny Dunning
Great stuff. So as an executive Workforce Solutions advisor, you've had some major experience across various areas of kind of workforce management, workforce solutions, from procurement to more, the kind of very traditional contingent to the more kind of cutting edge tech based stuff that you're working on at the moment. We've got some really interesting topics to talk about, partly around the intersection point where contingent workforce and services procurement meet, which which causes people a lot of problems.
00;00;49;16 - 00;01;05;06
Jonny Dunning
So those kind of gray areas, as you just describe them, that gray spend some great stuff to discuss around that. But before we get into it, just for context for the audience, would you just be able to give a little bit of a flavor of the background, some of the areas that you've covered?
00;01;05;08 - 00;01;41;15
Linc Markham
Yeah, absolutely. I well, three things I like to point point to that kind of mark my career is solutions. My wife likes to say I'm a systems guy through and through, but solutions, not just technology, partnering and and value and ultimately values what you have to bring in whatever role you do. I it's typically not even on my CV anymore, but I started in design and construction for about seven years as I morphed into an IT guy, design and construction, nuclear power.
00;01;41;15 - 00;02;16;01
Linc Markham
And it was about delivering, you know, construction projects and then moved into as I got an advanced degree and then moved into big four consulting, which I delivered, sold and delivered services to get off the road. I went into telecom, large industrial strength backbone provider, and then landed in BP, which is where most people know me from and started helps to start their indirect procurement group and then landed in contingent workforce after that.
00;02;16;02 - 00;02;38;16
Linc Markham
And that was a 15 year chunk of my career. Beeline as an ecosystem proponent and advocate, helped them design the roadmap for integrations, and now working as an advisor and proudly at Raise recruiting, working with them on direct sourcing.
00;02;38;18 - 00;03;03;28
Jonny Dunning
Yeah, that's that's brilliant. It's really interesting to see the areas that you've covered there. That's that's a very good overview of how an organization is kind of marshaling its capacity and out of interest when you're at BP. I know procurement is a relatively young function, but it's interesting to hear you talk about kind of helping to to really start and move forward
00;03;03;28 - 00;03;12;27
Jonny Dunning
the indirect side of the business. I'm assuming that that indirect side of the business was primarily service based.
00;03;13;00 - 00;03;49;20
Linc Markham
It is. Yeah. And it was and it is. We saw throughout the organization decentralized categories around corporate services. So indirect procurement is usually around corporate services. And from fleet to real estate or facilities management and HR procurement and professional services. So everything that was coming into the company and it spanned about, I'll just put a number on it roughly 5 to $7 million billion dollars.
00;03;49;20 - 00;04;29;03
Linc Markham
Sorry. When you're in oil and gas you got to think in billions. Surprise I made that mistake. But I'm back in the real world now. In in the services area, it was nearly $1 billion worth of spend. And that's where I kind of focused initially as we kind of pulled all of the categories. And I started spotting this $200 million category called temporary labor, and that that's sprung into another billion dollar category that I ended up focusing on for the last part of my career at BP.
00;04;29;03 - 00;04;56;25
Linc Markham
So super important as you look at all of that. How does it kind of unwind? How does the nature of that work get done, and what suppliers can help you do it the best? Right. And that's really the solutions, is we were in procurement trying to bring back to the business and innovate by getting partnerships and getting the best of the supply base working for BP.
00;04;56;28 - 00;05;13;09
Jonny Dunning
And I'm just intrigued to to understand why indirect hadn't been so thoroughly addressed previously. Is it is it partly down to just the growth in the spend in those areas?
00;05;13;11 - 00;05;41;11
Linc Markham
Yeah, a lot of it was around nobody really did the spend analysis to see where the spend was coming from. You know, different silos of the business in in Oil there's usually upstream, downstream and then kind of the, the, the middle which is either you call it midstream in the business or it's more kind of even your corporate services.
00;05;41;11 - 00;06;01;07
Linc Markham
But the spend was being done in silos and indirect procurement or corporate procurement brought it all together. So focusing kind of the the spotlight on on the spend all of a sudden saw how much you were spending with an IBM or an Accenture or Tata, whoever it might be.
00;06;01;09 - 00;06;30;07
Jonny Dunning
Yeah, I find it really interesting looking at it from a procurement technology lens. I feel like if we take indirect to represent services as a somewhat something of a generalization, I feel like the indirect side of it, the services side of it has was kind of left behind a little bit by procurement’s initial digital transformation, because it kind of came out of manufacturing the ERP going into the source to pay and procure to pay suites.
00;06;30;07 - 00;06;56;00
Jonny Dunning
And I think the main problem at that time was really the procurement of goods and materials that took the focus. But but just the that kind of crossover point where, you know, in most organizations now or in many organizations, the spend on indirect indirect spend or services spend is, you know, at or nearly at the same amount organizations are spending on goods.
00;06;56;01 - 00;07;29;18
Jonny Dunning
Obviously, it depends if it's a manufacturing organization versus an insurance company, there's going to be different profiles. But the spend on services is apparently growing at five times the speed of the spend on goods and materials. So so I guess for organizations like BP that have that strong kind of engineering manufacturing base to what they do, the services stuff can almost take organizations by surprise a little bit, in the sense that I bet you when you did that spend analysis, people were probably there were probably some raised eyebrows at the amount that we spend in those areas.
00;07;29;21 - 00;07;59;05
Linc Markham
Yeah, absolutely. And early in that journey, part of what I did was to once we got our arms around some of the spend and right, that's all kind of lagging indicators. Try to move back up the the workflow, if you will, to the requisitions and trying to get those routed and channeled the right way. But again staying on the back end supplier performance management.
00;07;59;05 - 00;08;30;18
Linc Markham
Well, who are suppliers, who are our largest suppliers? Who needs more executive attention? How do we get them to align with our strategic objectives. So 100 hundred suppliers and over $1 billion to spend with those suppliers. We in instituted a supplier performance management program and then started working kind of the medium size and smaller sized suppliers and saw the value from from the supplier performance management side of things.
00;08;30;21 - 00;09;06;25
Linc Markham
And honestly, that's also part of where we started seeing well, we've got some supplying going on. Basically we're not just doing the major services through those companies. We're getting kind of more kind of a staircase of services coming down from fully outsourced. And we got to remember the value proposition. When you try to outsource something, whether it's textbooks or just kind of real life, you're supposed to when you outsource an area, you're supposed to only leave about 4% of your internal cost.
00;09;06;25 - 00;09;30;08
Linc Markham
I don't know who came up with that number of your internal costs to manage supplier performance, manage that. But so if you take a look at your spend and I used to use Venn diagram for services overlay contingent workforce overlay some of the kind of stuff in the middle which is managed services or project services or SOWs what everybody wants to put in there.
00;09;30;08 - 00;09;58;24
Linc Markham
But you look at your big outsource services, we found that we still had 20 or 30% of the organization still there to manage the outsourced service, which you didn't really outsource it. Right. You're kind of supplementing it. And so that that was another area where we saw that, hey, the suppliers are doing a really good job at dividing and conquering us and selling back into the business to different managers who are there to manage what they're doing.
00;09;58;24 - 00;10;31;13
Linc Markham
But there's too many of them. So we started putting that puzzle together and seeing some of what we and ended up calling some gray spend areas that we started to attack, which were not really what the procurement strategies were about, not really what we thought we were buying, but how we were really acting and the services that were coming in to, you know, kind of after the fact, after we outsourced or business process outsourced or whatever.
00;10;31;16 - 00;10;59;29
Jonny Dunning
So, so with that gray spend, obviously you've got that pure procurement, that indirect services procurement background, and you've sold services as well, or you've provided services in that kind of big consulting setup, you obviously then have have had a significant proportion of that time. Also looking at the contingent workforce engagement. So contractors, temps, individuals engaged on a time and materials basis.
00;11;00;03 - 00;11;15;07
Jonny Dunning
And you've also obviously had the technology experience with beeline and also obviously with what you're doing now with Raise how would you define this gray spend?
00;11;15;09 - 00;11;44;05
Linc Markham
Yeah. So if again, probably the easiest way to think about it as a Venn diagram with all the services you have. And then if you have, let's say it's a couple hundred thousand million dollars of of contingent workforce spend. That's clearly defined by the type of suppliers you're bringing. You're buying from. The overlap of those two circles is kind of gray spend.
00;11;44;05 - 00;12;26;26
Linc Markham
And part of what we did in trying to use technology, this was well before generative AI using some machine learning AI technology is to test with an algorithm of 20 or so variables, factors that would test and requisition to see how suspect it was to being fully services or contingent labor. And it would label it with a percent score so that you could go and investigate that requisition, potentially before it became an SOW or a contract.
00;12;26;26 - 00;13;05;10
Linc Markham
And then it was a lot harder to unwind. So we dealt a lot with Ariba, but pre-Ariba we had an e-req system that we would we would interrogate based on with that AI app. This is seven plus eight years ago, and today we can handle unstructured data so much better. So I, I, you know, I have to say most people could use their favorite AI today to almost do the same thing out of the box as opposed to having to build something.
00;13;05;12 - 00;13;31;16
Jonny Dunning
Yeah, I think the fact that you pointed out it's unstructured data is really critical, because that's one of the areas where organizations have been reticent to look at this gray spend or services procurement because it's complicated. There's, you know, there's, you know, huge numbers of SOWs It's there's large amounts of unstructured data. Just the excuses of just disappeared with the arrival of these generative AI models.
00;13;31;16 - 00;13;50;17
Jonny Dunning
Like what you can do now is is a game changer for this type of problem. And also the fact that it's a kind of like a language based problem. What's the description of the requirement? What is the bid look like in comparison to the requirement? What are the outputs look like in terms of in comparison to the requirement?
00;13;50;18 - 00;14;17;12
Jonny Dunning
There's so many areas where AI can can assist in this, which is why I think the the conversation is expanding. More people are moving forward. And it's it's an area in an industry that has massively benefited from AI for sure. So one of the things that you mentioned there that I thought was really interesting was you mentioned looking at the type of supplier when you're differentiating between contingent workforce and SOW based services procurement.
00;14;17;13 - 00;14;41;06
Jonny Dunning
I think a lot of people miss that. And just just kind of looking a little bit deeper on it. For me, it always stands out as, you know, supplier selection, if you're buying a service is really important. You need to be able to do discovery to see who's available, who's out there, who's got the skills and capabilities, which organizations could deliver on that work.
00;14;41;09 - 00;14;56;06
Jonny Dunning
If you're hiring a contingent worker, that's the job of the recruitment agencies. So it's but do you feel that's something that maybe people is not recognized as much as it should be in terms of it's just a very clear indicator.
00;14;56;08 - 00;15;22;06
Linc Markham
Yeah. It is. So let me connect a couple dots here with the supplier performance management side. And here's a question for folks to ask during a quarterly business review or whatever a supplier performance management session just say, well who do you work with that works with BP or sorry, I use my my, my alma mater, but who do you work with that works with my company, right.
00;15;22;06 - 00;15;47;20
Linc Markham
And it'd be interesting. So like right. So if you're talking to a contingent labor supplier, you might say, well, we supply to IBM, we supply to Accenture, whoever. And if you're talking to the services buyer you may they may not disclose that their subs supplying you know through they're not buying contractors through these agencies. But you can then ask more pointed questions.
00;15;47;20 - 00;16;16;03
Linc Markham
And possibly they're working with some of your technology providers and bringing in, you know, SAP experts or whoever through the through the staffing agency. So, you know, that that kind of supplier performance discussion back to well, that's interesting. There's there's cases where we saw 10 or 11 levels of sub supply and you got to you're like, well, how does that work?
00;16;16;03 - 00;16;54;27
Linc Markham
How big is this markup that somebody making somewhere or the fractions of markup. And it's probably not a shock to most of your listeners that that happens. Maybe not that deep, but it does happen. So ultimately you want, you know, kind of the expertise from the supplier you're buying from. And in from procurement perspective, typically you have suppliers categorized as services suppliers, not as temporary worker agencies or contingent labor or, you know, so they kind of have to stay in their lane, if you will.
00;16;55;02 - 00;17;22;12
Linc Markham
They should stay in their lane to be able to provide you the best service that you're buying for, for that particular area category anyway. Those are a couple a couple of ways to kind of find out who's really supplying you what. And if you're procurement trying to find the value or the business trying to get more out of your money.
00;17;22;14 - 00;17;53;09
Linc Markham
Right. That usually the procurement discussion is, don't you want 20% back? And then you can go and use that budget somewhere else, you know, to do something better for the customers or do something more for, you know, kind of what, you know, driving growth if it's more investment. So that's usually the conversation you kind of want to have, either at the business side or the, you know, the line manager just wants to hit their goals and get the work done.
00;17;53;09 - 00;18;02;06
Linc Markham
So you get it. That's what they're there for. And you don't want to be the speed bump or the roadblock getting that done.
00;18;02;08 - 00;18;27;20
Jonny Dunning
Yeah, there's a balance, isn't there. It's the work's got to get done. But right. You've also got to be thinking about well, well actually two things I was thinking of. So. So if the gray spend is the messy middle between services and contingent workforce, what are. What are the drivers as to why an organization might want to identify that gray spend and kind of look into it?
00;18;27;22 - 00;18;43;23
Jonny Dunning
What would you say were the key? Because because sure, immediately when you were talking about it, I was kind of thinking about like efficiency. I was thinking about potential misclassification. But but what are the things that you think would would drive that as to why an organization would want to do this, to identify it?
00;18;43;25 - 00;19;23;07
Linc Markham
Sure. Yeah, absolutely. And certainly there's the compliance side of things. And I'm always, you know, kind of want to build compliance into whatever we're doing to protect the business, slash the company. I, you know, on the the value side, I think the basic thing, you know, as, as somebody who could sell services or did sell services, you're you're by selling a service, you bring, you know, this depth of understanding and capability that you can do things better, faster, cheaper and therefore rely on me.
00;19;23;08 - 00;19;55;09
Linc Markham
Right. Take my service, whether it's helping somebody outsource their procurement or out, outsource some of their IT or whatever it might be, so that let's call it 20%. That's not just it's just a round number, 20%. So service provider should should provide all of the benefits of a warranty, a guarantee, you know, getting things right quality wise and doing it for cheaper as opposed to body shopping and doing it yourself.
00;19;55;09 - 00;20;17;00
Linc Markham
And we all know the first time you do something yourself, it's not going to go as fast or as smooth or as cheap as you might want it. Maybe after 5 or 10 times it'll get better. But so that's why you buy services. So when you end up seeing services, just selling body shop, being a body shop and selling bodies in, you're like, okay, well, obviously not getting the value.
00;20;17;02 - 00;21;05;20
Linc Markham
We're not getting the, you know, the guarantees that we should get. And we're not getting outcomes that we think we're buying and parse part and parcel. That comes back to how did you write the specification on the front end to get things done. And that algorithm we put together help test that specification. Is it really just sound sound like and look like and, you know, walk like a duck meaning temporary labor as opposed to being, you know, hey, we're looking for a project outcome of X over a period of Y with these milestones, which, you know, tends to be the standard, but, you know, ultimately can disintegrate into just, you know, bodies, hours, rates, titles
00;21;05;20 - 00;21;43;07
Linc Markham
and change requests. And that was another thing. We looked at the amount of change requests that would come through against the original SOW or contracted price, and that that would get you to the true price, which was a lot more typically than what you thought you were spending. So we're trying to put some cases together around, hey, this these are different situations where we are spending way more than we need to.
00;21;43;08 - 00;22;22;07
Linc Markham
Even if we were to body shop that or contract labor it through and manage ourselves. So what we brought back to the business was a couple hundred million dollars, $100 million of savings. If we were to either route it properly through services procurement and write good specifications, slash manage that operationally and then supplier performance management, or give them the option to properly and compliant, go through temporary labor.
00;22;22;07 - 00;22;23;29
Linc Markham
Contingent labor.
00;22;24;02 - 00;22;53;28
Jonny Dunning
I mean that's that's not insignificant even for a massive organization like like a BP for example. That's certainly yeah, certainly a very significant amount of money. So, so in terms of why organizations might want to identify this, there's clear reasons around value compliance and, you know, operational efficiency effectiveness. I guess it's interesting you mentioned about the change request side of it.
00;22;53;28 - 00;23;24;24
Jonny Dunning
I mean, that I see that come up all the time where it's like, you know, it. People are saying, well, this this consultancy A has got a cheaper day rate than consultancy B, and it's like, don't just look, don't just look at that. Come on, look at the bigger picture here. But but also also one of the things that I am hearing more and more these days is maybe a little bit of more of a shift or a recognition of the value of, of outputs and outcomes where, where people are organizations are looking for certainty of outcome.
00;23;24;26 - 00;23;58;27
Jonny Dunning
I know that getting this customer facing app in place is going to cost. I don't know, 500 K and if the supply is late with it, then it's only going to cost 450 or 400 K, depending on depending on what happens and how late it is, for example. So the responsibility, the risk is on the supplier to deliver that versus even like, you know, maybe 3 or 4 years ago, hearing people talk much more about their concern about engaging on an output or outcome basis because it felt more expensive.
00;23;58;29 - 00;24;17;18
Jonny Dunning
Whereas if you look at the kind of the certainty of outcome is trying to get away from hiring contractors and temps on the never, never, as I put it, where they just it's in their interest to keep the work going as long as possible, potentially. I'm not saying that always happens, but that can be open to that type of behavior, that mis misuse.
00;24;17;23 - 00;24;31;04
Jonny Dunning
But if this not managed correctly, the certainty of outcome, if people are just change order after change order, that's if that feels like the same problem to me, or a different flavor of the same problem.
00;24;31;07 - 00;25;18;05
Linc Markham
Yeah. It's interesting. Sometimes you, when you even look through the contract labor, you start putting contractors in org charts. And you see in a lot of ways they can't they are typically put in money making or decision making roles, but in other ways they are where you find contractors managing a lot of contractors and not just for, say, a formal project, but almost kind of line management wise, if you will, you know, aligning interests and making sure that we're again, back to the the nature of the work you want to get done.
00;25;18;05 - 00;25;51;10
Linc Markham
And part of asking the right questions and getting a clear specification seems like it goes a little slower. And today, hopefully with AI we can do it a little faster with templates, etc. etc. but you know, slow saying that slow is smooth, smooth is fast. And ultimately the whole timeline looks a lot more as expected as opposed to in getting to the business outcome as opposed to this kind of scattershot approach to things.
00;25;51;12 - 00;26;18;27
Linc Markham
Yeah, I think that messy middle we were talking about is, is typically and the mechanism either called a schedule to a contract or an SOW a scope of work. That's a call off, if you will, the, the volume of those. And there's usually some threshold. Maybe a company puts 100,000 below $100,000. They they kind of get fast tracked.
00;26;18;28 - 00;26;39;14
Linc Markham
Ours was $1 million. They get fast tracked. That means they go offshore. No, no business, real business context around it. It's kind of isn't. Meet the 12. We had 12 points of light on a on a req and didn't meet all those. And yes, it's fine. Get it through. Don't you know speed is money, right. Speed is money.
00;26;39;14 - 00;27;05;11
Linc Markham
And you don't want to slow things down, but you also don't want to make unwise investments, if you will. Whatever. Whatever your threshold, whether it's 100, $100,000 or $1 million, that's where you can catch it right at the beginning and kind of course correct a bit. And that course correction, I think, is what gets you channeled the right, the right procurement or buying channel to go down through.
00;27;05;13 - 00;27;11;09
Linc Markham
And it doesn't. And again with technology to is today.
00;27;11;12 - 00;27;36;25
Linc Markham
Right. Some of that fast tracking can occur just with AI agents to some extent. And or kind of the the rerouting for a check, if you will, to get the right eyes on it so that we buy correctly and we get what we think we're going to get out the back end, the the opportunity to collaborate here is big.
00;27;36;25 - 00;28;06;06
Linc Markham
And I guess this is part of in some organizations, right. The services buying doesn't really align with the the contingent labor buying. And I partnered internally. So my, my my goal was to partner partner partner partner internally both with customers and peers. If you will partner externally with the right suppliers and then partner with the industry so you can learn together if you will.
00;28;06;06 - 00;28;39;06
Linc Markham
So partnering internally sometimes meant, you know, services procurement or IT procurement against contingent labor was well that's our spend. And I get, you know, valued more because I have a bigger spend. And it's not hard to dwarf contingent labor spend with services spend it's just usually on a larger scale. But the idea was that we, you know, when we did that program around applying some AI and some intelligence to the requisitions, we did that together.
00;28;39;06 - 00;28;56;04
Linc Markham
And my goal was, hey, let's push it all through services procurement. I don't we don't need to channel it this way. If it's not the right way to go and we're going to get more value, we should get more value by buying services correctly.
00;28;56;07 - 00;29;24;28
Jonny Dunning
Yeah. So so so for an organization who's looking to address this, they've got good reasons why they should do it. One of those reasons is going to be which is going to be a potentially a powerful business case driver, is that there's a there's a decent size of a problem. How how have you seen organizations work effectively to actually quantify this gray spend or to kind of quantify the problem?
00;29;25;01 - 00;29;58;13
Linc Markham
So, you know, from from the most my perspectives kind of been from the inside client owner from the outside, I think, you know, staffing suppliers are trying to morph into more services or SOW type suppliers. And they, you know, you can get help to help quantify some of that. Sharing requires sharing some data and some insights, which if you have a good contingent labor supplier you partner with, you can do that.
00;29;58;20 - 00;30;37;05
Linc Markham
I've seen that done before. I think the opportunity is not after the spend but before the spend with requisition amounts. I keep going back to that because, you know, once something is inked and already started, nobody wants to unwind it. So, you know, trapping the the opportunity to, to quantify and have the discussion is right, right at the requisition before it goes to your, you know, those are typically call offs to big suppliers.
00;30;37;06 - 00;30;58;10
Linc Markham
Again thinking in the IT or services space or Accenture or IBM or your Tata. And you know, if those are $100,000 reqs that are just going through and saying spend, spend, spend some of it, you can do what I mentioned earlier is to say, hey, this looks like we're duplicating what we've already outsourced. Should we be doing that?
00;30;58;12 - 00;31;30;16
Linc Markham
And getting to the dollar amount is pretty easy, because if you've flagged it as suspect, you just various probability levels, right? You know, a p ten P50 p hundred that it's not services spend. You can quantify very quickly that, you know, I've got a hundred reqs going through a month at $100,000. That probability 80%. You can pretty quickly start putting some 80%.
00;31;30;16 - 00;32;04;16
Linc Markham
And we're overspending if we're we think we're buying services by 20% because the rates being higher, whatever versus what we could do on the open contingent labor market. So that was the real easy business case to one flag it then work internally with my services procurement counterparts with contingent labor and route it appropriately, and then also inspect after the fact to see if you know it got better or it didn't get better.
00;32;04;18 - 00;32;16;00
Linc Markham
And we tracked all of that through our our spend analysis and ultimately our supplier performance back end analysis.
00;32;16;02 - 00;32;43;20
Jonny Dunning
Yeah, I love the supplier performance bit I think ultimately that's that should be the kind of fulcrum for a lot of this, this type of analysis and this type of work. But so many companies just don't put the emphasis into it. It was interesting, the point you made about staffing firms, in some ways starting to act more under kind of, you know, project services delivery, statement of work type delivery.
00;32;43;22 - 00;33;00;29
Jonny Dunning
Would you agree that there's maybe a little bit of a kind of a confluence in the market where consulting firms, in some cases are starting to act more like staffing firms and staffing firms, in some cases starting to act more like consultancies? Would you say there's a bit of a confluence going on there?
00;33;01;01 - 00;33;48;07
Linc Markham
Yes. Yeah, that's happened for years. Even since my consulting days. I think it was maybe less known back then. Big four consulting anyway. No, there's always a blended model to some extent in delivering services internal, external or subcontracted. But I do think, you know, if you're buying the right skills and you are signing up to deliver results, you know, again, staffing companies are typically a little bit more transactional minded in finding the right skills for X duration and X rate or Y rate.
00;33;48;10 - 00;34;23;17
Linc Markham
But I think what clients are looking for is more solutions today than they are just headcount or to backfill staff aug role. So it makes sense. And I think some suppliers of staffing suppliers have done it well. And some are just kind of, you know, whitewashing it a little bit. I not going to name names and I just and you know, from a consulting perspective, it's getting harder to justify the big the big rates from the big four.
00;34;23;19 - 00;34;36;17
Linc Markham
And I certainly appreciate a lot of the accelerators they can bring in the knowledge bases etc.. But ultimately today it's about kind of getting results.
00;34;36;20 - 00;35;06;19
Jonny Dunning
Yeah, yeah I'd agree. So so in terms of when organizations are trying to navigate this, this messy area in the middle, you talked about directing the work to the right channel and the analysis that you were doing up front. I mean, there are triage tools in the market as well. I feel like sometimes they're coming at it very much from a misclassification point of view.
00;35;06;19 - 00;35;17;25
Jonny Dunning
But I guess that's kind of it's partly the point. But is that the point or is it more about the work that needs to be done and how best it should be delivered, in your opinion?
00;35;17;28 - 00;36;02;13
Linc Markham
Yeah, certainly you want to be compliant and but ultimately the the harder part the classification is, is helpful and appropriate. But at the end of the day, it's how are we going to get the work done. And you know, am I back filling this role for X period of time. Is it a role I'm going to have. These are things you can partner internally, which I did I know others have with their talent acquisition teams of hey, this this role has been 2.4 years in you know this person been in role.
00;36;02;13 - 00;36;28;17
Linc Markham
And assuming you don't have tenure limits on your contract labor, you know it's time to either think about moving this into a permanent role and converting the person or putting it out to to market as an open job or, you know, potentially wrapping it into a service or taking a look at the best way we can do this going forward.
00;36;28;23 - 00;36;52;22
Linc Markham
A lot of lot of companies of, you know, especially on the corporate services side, have chosen to offshore a lot in, you know, global business centers globally. So when you're talking kind of the the non direct side of the business, that's that's a lot of the decision making that's been going on when you can offshore and do some labor arbitrage there.
00;36;52;25 - 00;37;19;09
Linc Markham
But back to the the question you're asking on the just outcomes. I think if we were to really look at the solving the problem that we're trying to do is supposed to throwing it labor at it and, and or just, you know, quick, quick written requisitions to get something done that we don't really know what we're trying to complete.
00;37;19;09 - 00;37;54;22
Linc Markham
And it's hard. I've been there, I've been on the business side trying to write those SOWs and again, I challenge you to use your procurement team as a thought partner. As a business owner, use your procurement team as a thought partner. Your eyes might be open to the potential opportunities out there to partner with suppliers and or come together with kind of a set of suppliers to solve a particular business problem as well as, you know, look to your look to your suppliers to help you solve those.
00;37;54;25 - 00;38;16;04
Linc Markham
You know, I think there's a lot of big four level solutions that are coming from companies like the one I'm working for right now, just, you know, which would be considered more of a staffing company as opposed to a solutions company, but it's morphing itself into that Raise is so interesting.
00;38;16;07 - 00;38;42;13
Jonny Dunning
So just just covering a couple of points we covered there with what you're talking about in terms of matching the work to the right channel. There's a misclassification lens. If you if you feed that up the chain, obviously people functions are going to be worried about that. HR TA contingent labor category managers. Those are people are going to be concerned about that.
00;38;42;13 - 00;39;07;16
Jonny Dunning
But when it gets right up the chain, the chief risk officer, chief legal officer is going to be probably concerned with that. But with that side of it, I, I wonder whether CEOs, CIOs and CFOs are as bothered about the detail of that. Whereas the other area you talked about was, how am I going to get the work done?
00;39;07;18 - 00;39;25;13
Jonny Dunning
I feel like that's a pretty fundamental thing when it gets up to C-suite level of like, you know, even the CEO surely should be worried about that. Would you would you see those as being two different levels of driver when you get right up into that executive boardroom?
00;39;25;15 - 00;39;56;27
Linc Markham
Yeah, absolutely. You know, part of what any of us always talk about is having the right level of executive support. Finding an executive and mid-level executives who care about getting whatever you consider, right, right, the right workforce solution in place. The first step was always trying to find that person that kind of seemed to have a bigger care, bigger opportunity.
00;39;56;29 - 00;40;26;21
Linc Markham
Maybe it was the person who was getting squeezed the most on the budget. In Oil and Gas world refining doesn't have high margins like upstream or production finding oil does, and so their budgets are bigger, etc. so you partner with the people that have smaller budgets that care about the finance side, and make sure you kind of cover off with the risk, cover off with the talent side and getting work done right.
00;40;26;22 - 00;41;10;06
Linc Markham
I remember talking to plant manager and, you know, getting the why why why do I care about this? Why, why? And I said, well, one reason is you'll live longer. And he chuckled and kind of broke the ice a little bit. And I said, he goes, how will I live longer? I said, you're going to be less frustrated. You're not going to have as many people as used plants going to run smoother, etc., etc. and he ended up biting on that, you know, kind of working with procurement peers that weren't aligned with, you know, trying to get it right either contingent labor services wise, try to find role models out there that have done it.
00;41;10;06 - 00;41;34;05
Linc Markham
Well. If there's pockets in, you know, in procurement across your company that have done it well and leveraged their leadership, saying, hey, I need a role model like you to help me lead, you know, the decisioning around whether it's services or labor. You seem to be doing it really well. Will you come along with me to your leadership?
00;41;34;07 - 00;42;08;05
Linc Markham
So kind of just finding those shining stars out there or people kind of being squeezed that need some help are ways I've seen it kind of bubble up to. Maybe it's a business units executive, and that business unit executive might have some of the hardest tasks in front of them. And they say, okay, I got 20% more, whatever the number is out of my budget because we did X, Y, and Z and then others start listening again.
00;42;08;05 - 00;42;40;19
Linc Markham
That's kind of what I mean. Maybe more not the CC suite, but maybe the the business unit level executive that can help sell it upwards. I do think, you know, CFOs typically procurement kind of rolls up some way, shape or form to a CFO. If not, you know, some some do have CPOs at, at the table. And also partnering on the HR side with talent acquisition, if you're kind of running a contingent labor program, right.
00;42;40;22 - 00;43;11;05
Linc Markham
The misclassification kind of spotlight on continued labor. But ultimately, if we're doing it wrong and the services side, yes, or we're not getting catching misclassification, I work with plenty of big companies that put services workers through the same classification steps that that contingent labor would, would put theirs through. So they're trying to trap or understand that they're compliant in that area as well.
00;43;11;07 - 00;43;44;29
Linc Markham
And that's in partnership with, you know, HR policies saying, hey, it doesn't. We want all workers to be compliant, external workers coming in no matter what the source. So that helps from a compliance perspective. And just sitting in, I, I chose to do this to sit in on HR leadership staff meetings, just just to observe and to build relationships and understand their priorities and what's coming down the pipe.
00;43;44;29 - 00;44;19;02
Linc Markham
So those are some ways I were I was able to build support up through the chain. And some companies have regional leadership teams. If you're more region based and you know there's a regional president, and those are good ways of getting by in specific to a region that might be more challenged than others in your particular space of getting work done, whether it be getting the right suppliers or getting the right balance between labor and services.
00;44;19;05 - 00;44;52;25
Jonny Dunning
Yeah. So so you were alluding to something there, which I think is quite interesting. You're talking about business units that you could advocate this type of approach to, to get this under control. It sounded like they were they had two key criteria. A they've got a high work delivery dependency or potentially outsourced service dependency. And two, they've got tight margins that that is the kind of the pincer movement of the of the drivers really.
00;44;52;25 - 00;45;27;24
Jonny Dunning
It seems that that's definitely something that we've seen in organizations. And even if you're trying to look at organizations that might want to procure services more effectively and manage that, spend more effectively and and get the best performance out of those suppliers, that's probably more important to an organization that there's a high dependency on outsourced service providers and is in a margin type market, because the ones that don't just kind of that stuff just gets a free pass, like you're saying, the kind of, you know, million dollar threshold.
00;45;27;24 - 00;45;48;22
Jonny Dunning
I see a lot of organizations that are at least 500 K millions, millions fairly, fairly chunky. Right. But, you know, there can be the Wild West going on in some organizations and they just don't care or they don't seem to care. Maybe they're just, you know, printing money too easily or they or they but but they could be they could be more effective.
00;45;48;22 - 00;46;04;19
Jonny Dunning
I always think they could be more efficient. But but within organizations that do work in those tight margin industries or business units that match that, that that need a lot of work outsourced in one way or another. This is this is a pretty fundamental problem that they're going to have to address. Really.
00;46;04;21 - 00;46;26;23
Linc Markham
Yeah. And, you know, I guess we, you know, we can all bring it back to home. And how do we manage our homes. Right. And do you just close your eyes and grab the first contractor or first service provider that comes by, or do you read your Google reviews, and do you do a little due diligence around getting the work done?
00;46;26;24 - 00;47;07;02
Linc Markham
Now? Some some work is very relationship dependent, right, with high level relationships with large consultancies or large service providers. And I get that. And that's where it's important. Again, I, I, I don't know, my guess contingent labor has become kind of my first love. Now my second love was supplier performance management. And not it was more to develop relationships, not to, you know, point fingers, etc. but hey, you know, we're we're spending X millions of dollars with you and we expect to get Y and we're getting Z and etc. so, you know what?
00;47;07;05 - 00;47;40;29
Linc Markham
What are we going to do together to make that better? One other area that we started hitting on with the with that AI as well, was not just around SOWs and what we would see coming through services contracts, but this kind of area around smaller apps doing software as a service. Right? Service is a word. And I know the kind of company you have.
00;47;41;01 - 00;48;09;12
Linc Markham
Zivio it's a software as a service, but we're seeing a lot of these pop up for under 100 K, and we didn't have in indirect procurement. We didn't have people, you know, we brought in some contract buyers, procurement people, contract specialists to help with that. But it was the number per month was getting overwhelming. So we started applying some of the same thinking to contract as a service.
00;48;09;12 - 00;48;36;23
Linc Markham
Do we really. Well, you know, that is or I'm sorry, software as a service. Do we really need to do that contract? What are we buying and have we bought that somewhere else? And today you could apply the same thing to AI agents. And you know, kind of if you're starting to buy either pre-development agents or somebody to help you build agents, etc., are we doing that somewhere else in the company?
00;48;36;23 - 00;49;02;25
Linc Markham
Which led to me thinking about, hey, how do we put technology into some of these contingent labor systems as skills? Right. So we heard we heard it. And I'm sure the number is way, way higher because this is 5 to 7 year old numbers. But we have we have bots doing about 700 reports throughout the company. Well, really I'd like to have one of those bots.
00;49;02;28 - 00;49;24;22
Linc Markham
How do I how do I know what bot we have and how do I know we haven't bought that bot five times over to do financial reports or whatever operational type reporting? So, you know, just thinking back to more of the contingent labor world on skills. And, you know, how do I hire a bot? How do I hire an AI agent?
00;49;24;24 - 00;49;46;25
Linc Markham
How do I write? And, you know, not saying that the perfect place is putting them in a VMS system, a beeline or a fieldglass or a Vendly or whatever. But ultimately, you do need to get an understanding of how you're hiring that service software as a service agent as a service, etc.. New problems for a new day.
00;49;46;25 - 00;49;50;14
Linc Markham
But that's that's.
00;49;50;17 - 00;50;11;05
Jonny Dunning
It's a great point. It really is a great point. Yeah. And you know, I've, I've spoken to some organizations. I've been involved in some conversations that kind of like UK government level where they're looking at, you know, AI agents as a worker category. Right. And it's, you know, joking aside, just saying, you know, how are you going to get work done?
00;50;11;05 - 00;50;44;24
Jonny Dunning
You've got your permanent headcount, you've got your contractors, you tempt temps, you're directly sourced contract workers and your gig workers and your chunk of service providers. And then you've got AI agents as well. And it's you know, it's really fascinating, but you make a great point in comparing the potential for people to double and treble up on buying agents or engaging agents or building agents in exactly the same way as SaaS contracts can build up.
00;50;44;25 - 00;51;04;00
Jonny Dunning
It's like, again, comparing it to home life, you know, you end up with like all these different apps. And, you know, if you've got a teenage kid, you know, you look at their app spend and then you look at their phone and you're like, well, you could do those three things with that one over there. But it's it's easy for that sort of stuff to creep up on both individuals and organizations.
00;51;04;02 - 00;51;36;17
Jonny Dunning
And I think just going back to something you mentioned earlier about collaboration, I think that's a really I find that a fascinating one because contingent labor is is pretty well defined. It's pretty well organized, a pretty well solved problem generally from a technology perspective, you know, a third party service provider, a kind of MSP perspective, a managed service provider perspective where you've got someone to come in and manage the whole thing.
00;51;36;17 - 00;52;07;06
Jonny Dunning
Those programs are pretty mature and pretty high quality. When it gets into this, when it gets into this kind of gray spend and some of the services areas, I see a lot of fragmentation. You know, who owns that? I mean, it's individual business users working under a threshold going to somebody they already know. It's different categories within procurement where there can be a lot of defensive behavior and a lot of territorial behavior.
00;52;07;08 - 00;52;11;20
Jonny Dunning
That must have been pretty interesting trying to navigate that.
00;52;11;23 - 00;52;49;23
Linc Markham
Oh yeah. Yeah, absolutely. And, you know, it's not always easy. You got to find common ground in a lot of ways, right. Ultimately, what's best for the the company and the customer does make sense to do this five ways, if you will. You know. And again that's where you find examples. And I, I worked hard and we I was fortunate we had a commercial attorney that was very business minded.
00;52;49;24 - 00;53;31;21
Linc Markham
Not not just contracts and getting contracts right. He was super well connected in the company as well, in a very kind of positive for, for, you know. Yes, I'm talking about an attorney here. So I, I saw that and partnered and then on the commercial side and partnered well with a labor attorney who's a little bit more edgy because, you know, there's there's are some kind of some touchy areas, obviously, but and then HR policies.
00;53;31;23 - 00;53;51;13
Linc Markham
So again, more, more contingent labor centric than services. But all that bleeds into services. And again, you know, having worked with beeline with some of the world's largest customers as well, with a lot of good compliance thinking.
00;53;51;16 - 00;54;20;10
Linc Markham
Not just around temporary labor contract labor, but services labor coming in you you want to provide a safe environment with skilled people, right. Bottom line at any company, whether they're actually working in inside the doors or remotely, because you can do as much damage outside as you can do inside, I guess. So, you know, if you take kind of some of that.
00;54;20;12 - 00;54;52;25
Linc Markham
Core common ground that everybody should have, right? A safe work environment digitally, physically, emotionally or psychologically safe, all those good things. And you partner with some of the people who are there to help you do that, which again, is compliance, legal, etc. you start building this little band of our team internally that are, you know, not always agreeing for sure, not always agreeing.
00;54;52;25 - 00;55;23;00
Linc Markham
So it's hard to argue with that kind of approach. Then it is to say, okay, well, it sourcing or, you know, facility sourcing etc.. So we want to, you know, work across lines and you try to get that common ground early with some of those team members trying to think of an example. I think it was in facilities management.
00;55;23;00 - 00;55;54;27
Linc Markham
You think about facilities management and everything. You got to bring in for that. And funny, this started with supplier performance management and getting some alignment around that. But then how do not all facilities management covers all the areas you need covered. So how to you get certain suppliers to partner together across some boundaries that you know, from catering to physical plant management to building security to extra?
00;55;54;29 - 00;56;38;02
Linc Markham
Those are all different companies. And how do you get them to play nicely together? And even if you have the same procurement team that's trying to pull those in, how do you make sure they're delivering on what what we had across that network of suppliers was 69 KPIs, which sounds like a large number. Usually we tried to stick with 6 to 12 KPIs for a particular area, but we covered so much ground there, and we had combined supplier performance meetings, and we had combined leadership in those meetings to and start to drive it from the back end supplier performance management to the front end on the buying side, which is where you get the buyers
00;56;38;02 - 00;57;06;18
Linc Markham
to work together, possibly across sourcing teams, etc.. So hopefully there's a nugget in there for somebody, you know, whether it's partnering more on the on the legal compliance side or partnering across buying teams or partnering across some of the leaders that want to see, you know, a safe work environment delivered for, you know, what could be thousands of people on or tens of thousands of people on a campus.
00;57;06;19 - 00;57;32;21
Linc Markham
And facilities management is sometimes taken for granted. And most people look at their cafeteria or their convenience store and rate it by that. But it's is the AC on is the or the lights on or the doors open when they need to be all that good stuff. So that was one area of services procurement that we kind of tackled in a very partner partner partner mode.
00;57;32;23 - 00;58;12;06
Jonny Dunning
Yeah. And also in terms of partnering, you mentioned about obviously partnering with suppliers. I just think it's so critical and and it really there's a bit of a circularity to this conversation because I actually think it all comes back to supply performance management in a lot of ways. And also when you're, when you're putting you kind of alluded to it, but with supply supplier performance management, it's not just a question of disciplining a supplier that isn't delivering or penalizing people or whatever.
00;58;12;08 - 00;58;21;20
Jonny Dunning
It's about aligning objectives for me. And it seemed like that was the way you were kind of putting it across. Is that was that a fundamental part of it for you guys?
00;58;21;22 - 00;58;46;19
Linc Markham
Yeah. And really looking at it, you know, with the solutions mindset of, hey, we're all in this together. I think we all want to stay in this together. You know, buyers have different options, right? You don't want to use that as a big threat. But you know, how do how do we make sure you know we're they ultimately they want a supplier wants you as a client to be a reference a reference client.
00;58;46;20 - 00;59;14;16
Linc Markham
Right. Help on the new business front. And then the way to get that, I always used to say, hey, we're partners. I never from the small supplier. We're always partners. Hey, my my name's on this. Or my team's names on this or my company's names on this. We want to make sure you know you have a chance to succeed as a supplier with us.
00;59;14;18 - 00;59;37;26
Linc Markham
But it's a performance based partnership. That was the key. It's a performance based partnership, right? We're not just playing here. We're not just having fun. This is a performance based partnership. You want to get paid? We signed a contract to pay you for X. How's it going to work? And we want to be transparent. Right. So no, no no surprises.
00;59;37;28 - 01;00;01;12
Linc Markham
You know, let's open up the performance books and see how how we're doing. If we're impacting how you're working, then we need to know that. And honestly that's some of the things I work on now is that, you know, how do we get the best out of us as a supplier and the best out of our client for what they bought?
01;00;01;13 - 01;00;26;03
Linc Markham
They, you know, they bought a service from us, a workforce service solution. How do we get the best outcome together? And I all the hats I've ever worn. Right. I was a client then. I was a consultant. That was then. I was in technology and were back to a client, then into technology. And now on the on the staffing supplier side.
01;00;26;05 - 01;00;52;05
Linc Markham
We've kind of seen it all. Not that others haven't done that, but hopefully I bring that kind of roundtable mindset to it says, you know, it's circle up here, not stay in silos or rows, but circle up around the table to to to bring the best for our customer. And oh, by the way, there's there's workers involved here, whether it's services or, or labor, you know, professional labor.
01;00;52;05 - 01;01;02;19
Linc Markham
And those people matter too. We want to try to find them meaningful work and, you know, get get things accomplished at the end of the day. So.
01;01;02;21 - 01;01;21;26
Jonny Dunning
Yeah, I think that's that's a brilliant way to kind of summarize the conversation, to be honest. It kind of brings it into a nice loop. And I love the angle on, you know, supply collaboration and kind of saying, look, if we're slowing things down or if there's people in our team that are making it harder for you to do your job, we need to know about that as well.
01;01;21;26 - 01;01;42;06
Jonny Dunning
And that's that's the collaboration. That's the partnership. And yeah, I think that's that take again, you know, like you've just been saying with your kind of supply hat on from my point of view, is a tech vendor with my supplier hat on. That's what I want. I want that collaborative relationship. So, so tell me a little bit more about what you're doing with Raise
01;01;42;06 - 01;02;04;16
Jonny Dunning
And I mean, I saw some of the Raise team in ProcureCon Vegas yellow trainers giving away yellow kit, which I managed to get some nice nice yellow kit. So got I got a nice pair of socks. And I think my daughter might have stolen the kind of little nice yellow bag. That was one of the giveaways.
01;02;04;17 - 01;02;10;19
Jonny Dunning
So tell me, tell me a bit more about the company. I know you've been involved in advising them and working with the team there.
01;02;10;21 - 01;02;36;24
Linc Markham
Yeah. Yeah, absolutely. I love the the culture Raise. one, the the company name gets you, you know, raise raised bar lift, lift each other up to some extent the yellow certainly bright and cheery So I love, love the.
01;02;36;27 - 01;03;11;12
Linc Markham
The face to to to the market I think part of it behind I've seen so many wonderful things people you know certainly Raise is growing and I didn't I really didn't Ian Martin group you know from there behind it you know Ian Martin group is I didn't work with them when I was a buy when I was a client, I knew about several of the people and I really met them after I left BP and started with beeline.
01;03;11;14 - 01;03;41;14
Linc Markham
Met them actually Tim Rhodes during Covid. Anyway, what I'm doing with them now is part of what I'm doing with them is really goes back to the supplier management slash, how how are we performing and then how are we we we collectively performing and building some dashboards that show the different perspectives of that, working with some brilliant clients that are well along in their maturity but aren't getting.
01;03;41;14 - 01;04;15;15
Linc Markham
I used to talk to Doug Levy about this, a little bit about dark Data, and he agreed so wholeheartedly. We got so much data in the VMS world. How do we shine a light on that data? Of course, there was Beeline Analytics. So part of what I'm doing with Raise is on the dashboarding front again to show performance collectively and working with clients to make sure they're informed and see transparently how well things are performing or not, and where the root causes might be.
01;04;15;17 - 01;04;48;06
Linc Markham
Beyond that. I'm working internally with the account teams, with Rick Roberts and trying to both provide more consistency along the account management level of information that they can see so they can manage their accounts even better. So specifically to some strategic customers that we have, and then kind of working down to more mid-market customers with some of that.
01;04;48;06 - 01;05;16;03
Linc Markham
So it's account management visibility to so they can potentially see problems before we have them. And then you know, operationally within big larger strategic programs how well we're performing well being so right day to day. These are daily dashboards. These are dashboards you pull up once a month or once a corner. These are by the minute dashboards that they're they're using.
01;05;16;03 - 01;05;31;27
Linc Markham
So I like to call them heads up displays because just like if you're driving a car and I've only had I don't have it now. But I used to have a car with a heads up display and, you know, it was right there in front of you any time you looked. You didn't have to look around. It was right there.
01;05;32;00 - 01;05;32;17
Linc Markham
Sorry.
01;05;32;23 - 01;05;53;29
Jonny Dunning
No, no, I was going to say that's fantastic for for an organization like that to have that kind of input from you in terms of looking at excellence in performance, bearing in mind you've seen it from the other side, you've seen it from all of the different sides, really. So yeah, that sounds like a, a very good application of your experience and knowledge in the industry.
01;05;53;29 - 01;06;29;10
Jonny Dunning
So yeah, super exciting. And yeah, I'll be watching the watching the journey with interest. But listen, thank you so much Linc, I really appreciate you joining me. I think there's some super interesting topics that we've covered there. And I know, you know, you're experiencing your insights will be useful for other people that are starting to tackle this problem and are dealing with some of the issues that you've talked through, how you kind of worked around those type of things and ultimately, you know, partnering, collaboration, working together, whether it's suppliers, people within different departments, it all comes back to trying to get the job done, doesn't it?
01;06;29;11 - 01;06;40;25
Linc Markham
It does. It does. Well, I appreciate appreciate you having me on. And I hope all of the the clients or future clients that you guys might have, see that, see the value of what you're bringing to market.
01;06;40;27 - 01;06;44;19
Jonny Dunning
Are much appreciated. Thank you very much. Linc, I'll catch up with you soon.
01;06;44;21 - 01;06;45;18
Linc Markham
Take care. Jonny.