With Pete Donaldson, Head of Sales, EMEA & Americas, Resource Solutions
00:00:00 - Squeezing the balloon - focusing on getting the job done
00:11:50 - Skills audits
00:18:20 - The dark art of services procurement
00:20:45 - Diversity initiatives
00:34:00 - Balancing risk with innovation
00:38:40 - Undiscoverables
00:49:25 - Agility and managing change
00:58:15 - Agile workforce planning
01:04:40 - How will the MSP service change over the next 12 months?
Jonny Dunning: 0:00 Okay. We’re rolling. Pete Donaldson from Resource Solutions. How are you?
Pete Donaldson: 0:04 I’m good, Jonny. I’m good. Yourself?
Jonny Dunning: 0:06 Very good. Thank you. Really appreciate you joining me. Looking forward to discussing some interesting topics with you. We’ve got a rough working title that we come up with of Services Procurement and Statement of Work in the context of Workforce Engagement. I know you guys can... Yeah, not quite as snappy as maybe it should be. Well, the marketing department could look at it afterwards. But you guys released an interesting white paper recently called Six Steps to Build and Engage your Workforce, which I’m going to kind of reference a little bit in this conversation, because there’s a few points that you guys are making around workforce, in general, and workforce engagement, that I really want to just kind of spotlight in the context of services procurement and SOW and how that applies to the wider picture. But anyway, before we get into all that, could you, as it is customary, give a bit of an introduction to yourself, your background, what you’ve done in the industry, [and] how you’ve got to where you’ve got today?
Pete Donaldson: 1:03 Yeah, no problem, Jonny. So thanks. So my current role is the head of sales and solutions for the EMEA region and the North America region for Resource Solution. So working within that large scale RPO and MSP business on a global basis. Before that, I suppose, I’ve had various different roles in recruitment from solutions director within a BBO organization run sales teams. And I actually started out like many people in this industry as a recruiter, attempts recruiter, running attempts to ask and I’m really building my... That started really my passion for the contingent workforce. So instead of a self-confessed contingent workforce nerd, most people who know me know that I love all the nuances and intricacies you get when you work in the contingent workforce. And it seems to be getting more complicated the further forward to go. But some ways it just harks back to the same old thing. And prior to that, I ended up in recruitment completely by accident. So I’ve got a career behind me in the armed forces and currently serve as a reserve major within the armed forces. So I’m seeing stuff. And a lot of the change stuff we’re seeing in the armed forces actually is quite easy, coming across into that wider landscape because the army needs to transform as well as any other organization does. And I remember, I got back from Afghanistan, [and] I was looking for a job in [Inaudible 0:02:23] world and wasn’t sure what to do. Put my CV on ri.co.uk. I think it was one of the biggest job boards at the time. And yeah, I ended up getting a call and coming in and starting off as a temp’s recruiter in the education market. And really that was over 10 years ago. I’m gone through various different things to get to where I am now, kind of specialize within that contingent workforce environment working in vendor neutral direct delivery, the whole spectrum of paces, and really just the interest is growing over time.
Jonny Dunning: 2:57 So with the military career, I guess, in terms of the skills that have been transferable things like organization leadership strategy, what do you feel has kind of been the major things you’ve been able to take across?
Pete Donaldson: 3:11 I think there’s a number of things that have served me well in terms of just being able to get the job done. In some cases, you’ve got to look at what tools you’ve got at your disposal, and able to adapt and change it, and ultimately achieve the objective at the time. And I think that relentless focus, for me, on achieving outcomes, which is quite relevant as we’re talking about a statement of work here. But achieving outcomes is very important to me. And the resilience to understand that, you know, sometimes when you talk about it with contingent labor, if you put an elastic band around a balloon, it pops out the other end. And that’s kind of what we see across contingent workforces. You think I’m going to get my temps under control. My contractors believe they’re going to lock that down and services procurement spend pops up. And then somebody finds another innovative way. So such as employed consultant to bring people into the business and... So every time you try and do something, you’re going to get a problem potentially you didn’t foresee somewhere else. And I think that resilience to be able to work through those problems with clients and try and deliver the outcome, the end outcome of getting the work done, it’s a favorite topic of mine related minute work rather than worker, thinking about what needs to be done rather than necessarily the type of person does it. And the second thing is, it’s helped me management really is the leadership development you get from going through the Royal Military Academy [Inaudible 0:04:30] and various different courses in the army really set me up to it, but more recently, when I did Staff College, a lot of it focused on leadership, and it’s chartered Management Institute, you get your level seven out of the back of doing it through funded courses that actually that real focus on leadership and management and strategy in terms of tying all those things together with your subject matter expertise. It is really just a feel like it gives me a much more granular level and rounded exposure, really, Jonny, to everything kind of... You know as well as I do work in this world. We’re hit with problems on a daily basis from legislative changes all the way through to the fact that we deal with people based environment and people have choices. It’s not like selling products from a supermarket where the product has to be sold and you sold it. Its people have a choice here. And it’s working in that environment, which is always entertaining and challenging, sometimes in different orders of merit really.
Jonny Dunning: 5:28 Yeah, so one of the things you mentioned there was this concept of getting the job done, and work not workers, I think that’s extremely personal. And when you look at that kind of balloon scenario that you described, of a client trying to manage their contingent or control their contingent workforce population, and just other things popping up elsewhere, you squeeze the balloon here, big bubble pops out there. And I think that’s a really interesting conundrum at the moment, particularly with things like the growth of the gig economy, which obviously was happening before COVID hit, and then is probably being rapidly accelerated and evolved, in certain ways since the advent of COVID. But also things like the increase in outcome based work, remote work, [and] all this sort of stuff. Do you think the company should be trying to keep a lid on this stuff, or do you think their approach needs to be actually we should embrace the different channels, but if we’re organized enough, and we understand it all, then we can work out which we should use for a particular piece of work?
Pete Donaldson: 6:30 Yeah, it’s an interesting one. I think, keep a lid on is an interesting way to put it. Because I actually think it kind of comes into multiple different facets of... This is going to be the future of a lot of people’s work. So just to take a step back. We went from a world where we had campuses, people came to an office, came to work, and in certain circumstances, certain industries, as we’ve seen through the pandemic, people will still continue to do so for certain jobs. But in other businesses, we’re moving more to this. And somebody I know, calls it a federation of employees. Employees dotted all around the place. And actually, when you start to look at that need dwindling to come to one sort of central hub to do work and becoming more of a hub and spoke model, it actually lends itself better to balancing the contingent workforce and how you then engage the current contingent workforce based on the tasks that you need to do at a specific moment in time, because it also ties into a couple of other things, which is, your employee cost base is a fixed cost base. So you can’t get away from doing that. And actually businesses peak and trough. And therefore you want to try and hold a certain amount of skills within that part of the organization that a core amount of work. But as your business goes through digital transformation, as potentially your customers’ demands and needs change, you’re going to need to change the type of people you are doing that work with, what they’re doing, how they’re doing it, and necessarily shift focus quite quickly. And I think that that means that you need to embrace it a culture. So I don’t think it’s a case of putting a lid on it. I think it’s a case of visibility and data. And the data of not just what work needs to be done, but who’s in your business, what are they actually doing for you on a daily basis, and then where can that combine to? A task, I need x move to y, that’s a task. That’s where like gig economy really started within that sort of delivering, take this meal and give it to this person’s house, move this box from x to y, or dress this window for in a shot type scenario. You know, the outcome is based on, I need this project achieves, I need this implementation done, or this new service brought to market, or I need this transform. Then actually, could that be wrapped up in a fixed cost? I am just going to outsource it, [and] it’s going to be done. And then I’m going to pull it back in again. And all of these things are then nuanced in with legal complexity. So I know I’ve got a bit around the question in there, Jonny. But for me, it’s kind of like we have to embrace it. The millennial plus culture is looking at having multiple jobs, the research on the Gen Z employee said that they’re not going to stand the first job for longer than 550 days on average, which means if you don’t engage them, you don’t train them, you don’t bring them forward with you, they’re gonna leave sooner. And even if you do everything right, they’re still going to leave. So we’re still going to need to look at how we work in a place where people want to be able to choose pick and choose a bit more, they want to get the offer to employees. So you know, I can’t contingent work is not because a contingent worker, if they get something out of working for you, then they may be returned at a different time. And certainly that offer then may mean that they go to you rather than one of your competitors to do that work for you. And you end up further ahead from it. So I think it’s a very complex thing, but it certainly needs to be embraced.
Jonny Dunning: 9:52 I mean, you know, we’re touching on some really interesting points there. I want to come on to looking at the skills that organizations have and where those pockets of skills can be both internally and externally. And you mentioned really about the kind of appeal to use it in the context of employees and contingent workers. It also applies to service providers, particularly when you’re in areas of scarce skills, we can come on to the kind of employer value proposition and how that fits into it all. But you summed it up quite well now. And I’m totally in the same camp as you in the sense that I think companies need to embrace these different options. And I would say it’s horses for courses, you know, you look at the work, if you’ve got the options lined up effectively, if you’ve got clear channels to each option, and you can manage it, which is where digital transformation technology again comes in, and it is very important in that process, then you can achieve that objective of understanding what is the most effective use of all of your resources. We probably a little bit comes back to the some of the stuff you’ve done in the military as well, where you need to get the job done. You need to understand what your resources are, which are the best tools to use for each job. And to be able to achieve your objective, it also comes back to the core things around strategy, leadership, and the communication strategy, whether that’s to an internal employee base, external contingent workers, or an external supply base, who are effectively part of your extended workforce. If you haven’t got a clear company strategy and you can’t communicate that out to your workforce, you’re not going to get the results you want, and especially when you’re starting to deal in outcomes. So outcomes have become very popular. It’s something that’s really growing. But it needs to be done right. And organizations need to have a strategic approach, because it forces them to think about what do I actually need to get done? What does the business need to do to achieve? And what am I doing? And how does that work towards the overall goal? So I think these are some really, really interesting points there for us to cover off. Just going back to what you were saying about understanding the available skills within an organization, I know you guys touched on this when you talked about skills audits in your white paper. So can you just give me a little bit of your kind of opinion on that and also maybe a little bit of a window into what happens when you guys do that sort of thing in practice in terms of skills audit? Where to get the information from? How does that sort of thing start?
Pete Donaldson: 12:15 Well, I mean, so skills is one of those hot topics. And we attend a lot of events, as both of us do, diversity and inclusion is always a hot topic. Skills is always a hot topic. You’ve got all of these stats telling you that 90% of the UK workforce needs to be upscale by 2030. It’s going to cost the UK economy X amount of billion pound if it’s not done. And you’ve got companies like the Bright Network, who’ve just launched their sort of skill leaver and graduate training programs to upskill people in necessary tech things. So there’s quite a lot of focus really on upskilling them. And actually, where this came to light was we’re looking at the [Inaudible 0:12:57]. And there’s an area of their business where there’s automation, and ideally, like real estate closure happening now. So it’s like, we’ve got all these employees, and they’re really good people, and they really fit with the culture of the business. But we don’t need them in that guys anymore. We don’t need them in that role anymore. But we’ve got a boatload of tech vacancies over here. And its how do we see which one of these people has the potential to be upskilled into these new roles. And it got into the conversation of, one, you’re looking at a communications program and an employee comms program because you’ve got to engage the people, because part of the skills on it is getting the people to the point of doing it, so people can record their own skills, but also to push people through an assessment program, where you can start tracking what is their ability to learn tech skills, what is their personality tell you about where they’re best place. So they might not be the best person to go and suddenly become a cloud engineer, or do full stack development, but they might be the right person that could sit within your project management team, because they have the right analytical capability or potential to be trained on that and can help you deliver some of these products versus being one of the tech people. But understanding, [or] having a... There’s some companies who are really far ahead with this. And they have their workday talent marketplace set up really well. And they’ve got these learning pathways. And people can go and hold their skills and engage with it. And you’ve got companies who are well far behind it. The companies here are significantly far behind that are actually in the majority, because there’s very few people have this stuff absolutely nailed down. But by starting to understand what is in your business, and what the profile of those people look like, you create that data set, then it allows you to look at what your future skills jobs are, that are stable, just jobs rather than works there, and understanding what the core skills required or the foundations really for some of those. Well, if I take x person, add y train, I get Z. And it’s going to become much more common in terms of the speed at which skills are changing, the speed at which job requirements are changing, so start thinking about how do I hire and train rather than how do I try and hire the end package. You know, what is my x plus y, but how do I do that on my workforce? So let’s find out what we’ve got there. Look at what vacancies you’ve got trying skills, not the go actually, my population of actuaries who are all being automated the minute make really good data scientists by going through some sort of training program, and therefore I’m creating, and I’m building and it goes back into [Inaudible 0:15:41] to talk about. There you need to talks about that sort of how you engage your extended workforce. And the purpose of that, for me, that purpose actually becomes very important, because how you link in your purpose of what your business does, and how that employee employees? How that sort of offer really do you have your business resonates with people, because by getting that right, you get people to engage, and we’re having the right data analytics and assessment platform. You can start to understand what your workforce looks like. And then you can start to understand what your future skills requirement is. And then you match the two of those together. And you start doing your own trained fit program, which allows you to deliver those just in time skills as part of your internal workforce. And ultimately, hope that should keep you ahead of the competition. So that’s really where it came from. But we weren’t looking at it at the lens of extended workforce, contingent workers. This is very much for the people who are potentially facing redundancies or larger rescaling programs. And it’s how can we actually try and identify. If you’re going to invest in somebody, who are the people to invest in and who are right for the long term and have the potential to do it. But ultimately, it will identify gaps, and then you go, “Can I fill those with a variation of a contingent workers such as the employee consultancy model, which is very popular at the minute where we’re taking people and training them and deploying them and mentoring them through a program mentioning pilots and taking them on?” Or ultimately, where am I just not going to get those skills? And then where do I need to look to engage that workforce? And actually, is that a short term thing, Jonny? Is that like something that I just need somebody for? I need somebody next quarter one to come and deliver a project, therefore that’s an outcome and I should push that down a statement of work, versus actually there’s going to be a two year transformation. And then it’s still going to be done. So probably looking at some sort of longer term, contractor type engagement model. Who knows?
Jonny Dunning: 17:37 Yeah, really interesting. I think when you were talking about the scenario with the client that you mentioned, where they were saying that we got some great people here, but we don’t need them to do what they were doing, but they fit with the culture, and they’re really good people. I totally agree with that. I think from a business perspective, and running teams and hiring people, I’ve always taken the approach that the two most important things are attitude and attitude. And good people who are a good part of the team who can work with you towards an objective - if it’s communicated effectively - they’re massively valuable. And cross training people and giving people opportunities, thoroughly agree with that. And just going back a step. So obviously, you clearly know your stuff when it comes to all things workforce related. You spent a lot of time in the contingent workforce. How is that transition work for you with getting involved more with services procurement statement of work as well? Just talk me through a little bit about how that’s changed over time for you.
Pete Donaldson: 18:36 So I think if I go back to, maybe, three or four years ago, Jonny, I would have counted services procurement management is sort of the dark art, like magic that keeps going on in the background, because it was very well seen as big when you’re big for consultancy span. And then if you have this tail of consultancy suppliers, it didn’t really touch a lot of the MSP work that we did, because I think, because of the way that budgets are aligned within a lot of businesses, because of the way it goes up through the PEO system, it kind of sits in procurement. Multiple different business, loads of people hadn’t really got to the point of augmenting the spend. It was almost easier to see that you’ve got 20 traditional contingent workers in your department versus who’s coming in and doing consultancy work. And then it was only really, I think as companies started to get onto the body shop and it was occurring... You know, you’re in there as a consultant of our contractor till Friday and your 400~500 pound a day and then all of a sudden, you’re being billed at 1000 pounds a day because you’re coming through an external provider and you’re doing some of their work as effectively a worker through that consultancy program. So I think as businesses started to become more interested, it became more important. Form a service provider business, you kind of got involved with it. And I’ll be honest, Jonny, this isn’t to learn about this stuff. If you have to be in there, you have to spend time with procurement people to understand what it is they’re trying to achieve. You got to spend some time with the project managers, the IT project managers, the business change project managers, those people who are driving those transformation programs and understand how they’re going about getting their need. And then there’s an education program as well. And I find a lot of it was initially self-taught through interest, like, how does this work? I’m quite an inquisitive person and quite curious. So I kind of like to get into the detail of how it works. And then it was understanding where between direct award and mini-competitions and how the statements of work are created, and how people come in under various different terms and conditions, then who’s making the decisions and where stakes and actually, it kind of my knowledge is kind of built over time really for it and through work with tech providers, such as yourself and other people and work through those sorts of things. And I think it’s the future of holistic workforce management. And it goes back that point way right at the start. I’m a big believer in the work, not the worker. So we need to start looking at what is our business need to achieve? What is our strategy? And then how are we going to achieve that for the workforce? And because of that, it kind of said to me right, Pete, you need to get your head around Statement of Work, services procurement management, and at least be able to have a competent conversation with somebody when it comes to, “Hey, I’ve got this problem, how can you do something about it?” So, yeah, it’s probably because I’m a bit of a nerd, Jonny. And [Inaudible 0:21:29] time in this environment.
Jonny Dunning: 21:31 Yeah, like you say, curiosity goes a long way. And understanding the mechanics of how something works. And I think with statement of work, if you break it down to the simplest level of “I’ll pay you X to do y”, it can seem quite simple. When you peel back the layers, it’s obviously very complex. It has a huge amount of variation. But it has massively increased in importance. And I think, it’s always been important to procurement teams. I mean, I’ve had interesting conversations yesterday with a very interesting procurement lady who was talking about starting in services procurement back in the day before services procurement was kind of really even a thing. And it wasn’t really recognized as having particularly different requirements to the way that goods and materials were managed, where it is issues be nuanced and complicated in ways that buying goods or materials aren’t. And I think there’s also been a confluence of contingent workforce and statement of work or services procurement. I mean, even if you just look at RFPs, just the increase in the SOW being a fundamental part of large organizations, contingent workforce, MSP, RFPs, also, some of the research going on in the market at the moment. It is really kind of bringing the two together. Clearly, they are very different by their very nature. But there’s also this kind of crossover, this gray area, where you get this kind of confluence of hourly or daily based work time and materials crossing over with deliverables based on combinations and things like that. So I think it’s very interesting. But when we were talking about the kind of skills audit side of things, obviously, that’s primarily looking at an organization’s permanent workforce. But how can an organization factor contractors into that? But added to that, how can an organization factor in their wider services supply chain? Because effectively that is their extended workforce as well?
Pete Donaldson: 23:28 Yeah, it’s a good question. You make a good point about that sort of services, procurement management before it became a thing. And the difference between sort of goods and products and that sort of services, and specifically within human capital, I mean, my wife, I mentioned the term human capital, hates it, because you said it sounds very like... This is a very good [Inaudible 0:23:47]. You’re talking about people in that way. But I suppose that kind of nuanced piece of services procurement management, as we started to realize the goods and service versus outcome delivery stuff was different and require different skills and different touch. In terms of skills for the contingent workforce, really, I think, for me, there’s a couple of bits that are really... So there’s a history of a lot of long term contractors within businesses. And you often find that the role that people came in to do isn’t the role that they’re doing now. That’s one of the things. We’ve all seen 10 years north of five years in quite a lot of companies.
Jonny Dunning: 24:25 Not anymore.
Pete Donaldson: 24:28 Saying that, but they’ll still be very variations of a theme, as we all know, they’ll be variations of a theme. Because where there’s a will, there’s a way to get around the rolling a lot of places. But the one thing that did flight to me, and I was having this conversation with somebody, is actually skill features in the contingent population. So, if you have a certain amount of skills within a permanent employee organization, generally there is some sort of learning and development function, which is started upskill and trade off employees. And actually for some of the contingent workers because of the length of tenure and because maybe off trying to avoid IR 35 roles in the same way as we view the canteen or the Christmas staff party, it was a kind of, who the L&N function, we can’t give them access to L&D because then that opens a whole new can of worms and started to make me wonder whether there’s actually quite a large population of contractors that do have skill [Inaudible 0:25:20] and potentially upskilling as quickly as possible. And when you look at the amount of perm conversions through the IR-35, either to FTC or permanent headcount, for some of those people, it will be, because they needed access to the learning and development, because they needed to upskill, because actually, when they dip their toe back out, and the contractor consultancy marketplace, again, their skills weren’t as currently competent potentially, as they needed to be, depending on the organization they’d actually been working for the last X amount of time. So I think it’s important to understand how we validate those skills coming in. But I suppose for me, it comes back to the work again. To me, it’s like, you’re buying in the skill set. You’re buying in the work. And it goes to actually what we need is visibility and control, which a lot of people have across their MSP backgrounds at the minute. They understand who’s coming in and what they’re coming in today. But we don’t have as clear a control over services procurement. And the people being through with those various different service providers, what those service providers are coming from, what is their niche skill set. And it’s very often that you see that a project manager has used Jonny Dunning consultancy to deliver a project. And then he needs another project or one of his colleagues needs another project on and they say, “Oh give Jonny [or] get Johnny and he’s good for doing that.” And actually, it’s a completely different skill set or different... It may be a partner or similar area of the business, but you’re not the expertise in that specific area. But because you’re now into the business, you come in to do it. And you might do the job, but it might take you twice as long as a few changes there that go along the way in terms of your scope, deliverables, you know, there’s change requests, the procurement always love currency within the system. Or it may just not be done the same standard, and again, because we could be under a time and materials, SOW, which is always an interesting one for me, rather than fixed price of deliverables based. Because another problem. So a long way of answering, I think we’re pretty good at that was contingent because of the type of work and we bring it in. We absolutely need to be understanding our suppliers coming into our business and what their specific niche skill sets are, and then using them in the right way and making sure there isn’t that cross pollination or the bleeding edge of skills into a different area of the business.
Jonny Dunning: 27:49 I totally agree. I mean, you mentioned the visibility and control side of it. And it’s just nowhere near as mature in services procurement. It’s very immature in most cases. We’ve done some research in the market. And the feedback that we’ve had is that, effectively, services procurement is being left behind from a tech point of view, compared to for example, contingent workforce. It’s been very well established models, pretty well buttoned up programs. And obviously, there’s this crossover between HR and procurement, even when you look at contingent workforce. And when you talk about like skilling up contractors and or how that transitions and all this sort of thing, that’s a very interesting discussion, in and of itself, but I think with services procurement, the idea of visibility is so important, because when you’re talking about having a supplier that’s just used because they’re known, there’s also the other factor, which is an organization might have some fantastic suppliers that they’re just not aware of. So some individual within a department might be aware of a very good supplier, cybersecurity provider or something like that. Another part of the organization needs something that they just don’t know where to go for it. It’s exactly the same problem, as you would have on a contingent workforce basis, just a different engagement model and structured differently within organizations. But I think the organizations can really be missing out on a massive potential value there with things like innovation, and also encouraging diversity within the supply chain, different types of suppliers, more diverse suppliers, sustainable suppliers, it comes back to what we were talking about around this offer. So the offer of a company and that is inextricably linked to the organizations that are supporting that company. And it goes both ways. So if I’m a big organization or my offer is very much based around sustainability, and I’m using external suppliers that don’t have a good track record for sustainability, that’s not a very good fit. Likewise, if that supplier has a really strong message around sustainability, and it’s a really important part of their value proposition, and as a client, the organization doesn’t have it, that’s not a good fit either. So it all comes back to data. And it all comes back to having information to make insights. I think there’s a massive opportunity to procurement to leverage the current situation where they are very important. We talked about getting the job done. We look at COVID, if we look at what procurement teams have had to do around the world to just get the job done, deliver PPA, make it happen, that has elevated procurement. And with all of the kind of like cost pressures that as COVID has created, just being a budget isn’t good enough with things like services procurement, people are now looking at it and saying, “Okay, we’re spending millions, tens of millions, hundreds of millions on services procurement, what are we getting for this?” I know we spent X million with so and so provider, but what did they do? Did they do a good job, and actually, how’s it contributing to the business? And I find it very interesting to see some of these problems land on the doorstep of MSPs, where organizations just saying we just want to outsource the problem.
Pete Donaldson: 30:53 Yeah, diversity security on their journey and diversity in supply chain. So if you look at like what we’re seeing from a lot of RFS clients, because that generates individually that especially asset management and manage large portfolios. So they’re setting up these diversity funds to support female owned female led businesses, minority owned businesses, taking these big 8 billion pound investment funds and investing into these types of markets. And then you’re looking at their supply chain, and they’re looking for ethical commitments about the supply chain to your point around sustainability, around that ESG responsibility, that EDNI responsibility. What are they doing? How are they doing it? Because they know that by association, as we’ve learned through the media is that if your company is using another company, and they are wanting in some way, shape, or form, you’re quite quickly associated, and ultimately tried by media. And I think that with services procurement management, because of the multi-department spend, and how it can all be sort of fragmented, it’s quite a good way for companies to if they get the visibility and control but as you said, you could be easily talking. You might have 20 million pound contingent spend that you’ve got identified. But I guarantee you’ve probably got 40 to 80 million in consultancy that sat somewhere else in the world. And if you can wrap all that up, and you can tie that into the same supply chain ethics in the same partnership management strategy, you can get more bang for your buck. And actually, you can ensure that you’re protecting your business, the company’s user aligned and your purpose for driving that vehicle forward and driving you to the next sort of iteration. And you can really ensure that actually, the values that you want are being lived in your supply chain, and you’re representing the communities that you serve, and they represent the communities you serve, and you’re doing things in the right way. And I think that it’s kind of... We’re missing a trick here, because we’ve got all this spending, and we could really leverage it a lot better. But on the other hand, it’s like, we’ve got all this spend over here. And if we don’t actually know who we’re paying that money to, in one way, shape or form, then we are leaving ourselves open to risk and exposure. So it’s kind of a procurement where an HR, and wider CSR, when I think in a number of cases, never mind, the publicity that we’ve all seen in various news reports of all sorts of things with shift workers and gig workers. And this is the population that hits the media pretty quickly, actually, if something goes wrong with one of those populations, and you just don’t know, and I think it’s one of those things is, you better know, to at least get ahead of it.
Jonny Dunning: 33:19 Yeah, I agree. I think, when you look at things like diversity, I think diversity can be a big driver of innovation. And whether you’re looking at innovation within your workforce, people with different views, people from different backgrounds, or whether you’re looking at that within your contingent workforce, whether you’re looking at within your supply base. But with innovation, you’re going to have to use, for example, smaller suppliers. You’re going to have to take some risk. How do you think that procurement can effectively balance that in the risk control side of things, versus allowing innovation to flourish?
Pete Donaldson: 34:02 So the million dollar question that really latch on me in terms of balancing risk and innovation. I think, for me, you’ve got to start small in some way, shape or form. So well, how do you migrate risk? Well, actually mitigate risk realized versus the first one. So by getting your supplies chain under control, and setting terms and conditions are set in an ethical and fair way to engage in contract with the business, you’re automatically reducing the risk, you’re reducing the risk across the projects. And to go before those change requests by making sure they’re actually tracked by procurements. You’re starting to understand all those things up. So you’ve then got that, and then it’s about controlling the risk and looking at what areas of our business are going to be come back to that work, not work, or what areas of our business are going to be the real focus over the next 12 to 18 months? Where do we really need to innovate? And that’s where I want to be bringing in the suppliers. If we do nothing, we’re going to go backwards. In best case, we’re going to go slowly backwards. But if we really do something innovative here, and we really drive this transformation for that, it can really start business move to the next level. And if we get it wrong, is the impact of getting it wrong, worse and the impact of doing nothing at all, arguably not. So it’s about controlling that risk. And you control that risk with service providers, through milestones and deliverables. You’re looking at what needs to be achieved. You’re making sure that it’s commercially and contractually clear to everybody. And then if the milestones start getting missed, as deliverables are being met, then you’ve got an option then to stop what you’re doing, reassess it. This isn’t just controlling it, and you can’t control it without actually visibility, and knowing where to look. And I think that whole thing about visibility, having a workforce plan, having a purpose, and knowing where to look really tied you up to where am I going to go and double down on the risk. I mean, the one thing has always been drilled into me from a very early age is the biggest risk you can do is do nothing. And that’s where some of the services procurement stuff has got to. It’s too big. It’s too complicated. I don’t really know what to do. So I’m going to do the ostrich thing and stick my head in the sand. But I think that if you don’t innovate and you don’t do something about it, your competitors will. And that’s going to really fundamentally shift how you are as a business moving forward in the future.
Jonny Dunning: 36:19 Yeah, there’s been some great drivers that are acting as a catalyst for change around that. We’ve just looked at the UK, COVID affected everywhere in terms of driving remote work, outcome based work, just a focus on deliverables, doesn’t really matter where you are, what time you’re working, you’re balancing other things, most important thing is did the job get done well and on time. And then in the UK, obviously got R-35 driving this employee versus self-employed? Do I want to bring in time and materials labor? Or do I just want to get an outcome delivered? And obviously, Brexit as well. So in the UK, I think, he’s being pushed to the kind of tip of the spear as it were, with regards to outcome based work and statement of work and how that’s evolving. But the similar kind of rules are starting to shape up in places like Germany, France, and the US. COVID, obviously, affecting everywhere. So I think there are a lot of factors that are driving a force for change. And it’s been a big problem for ages. But like you say, it’s almost like so big people don’t know where to start. You’ve got all the issues of big strategic suppliers, having very close C suite relationships, procurement not really necessarily being part of that to a certain extent. But you think about the value that procurement can bring to their business, whether that’s directly or whether it’s working through an MSP, for example, to understand their services procurement supply chain. If they’ve got that data, and just being able to see which suppliers are doing which, what’s being delivered, how much it’s costing, ultimately, what it’s delivering to the top of bottom line of the business, that puts procurement in a very powerful position, and they should be strategic advisors to the business. And we see this all the time when you look at using systems like ours to provide automation, visibility of the control. Firstly, people suddenly have the veil lifted on what’s going on. You’re right. It’s all about capturing information at a granular level, milestones, deliverables, change requests, all that sort of thing flowing through the process. And but just having access to that information and control to push it up the chain in the business, it’s very valuable. Because it can also then be compared to other workforce methods. And as I said, it comes back to that question of what is the most effective use of our resources? To your point, it’s about what’s the best way to get this piece of work done? So we talked about struggling to find the right supplies, or understand what’s in your supply chain. One of the things that you guys talked about in the white paper more in line with kind of like permanent resource, was this concept of undiscoverable. So this was kind of what you were talking about when you were talking about people potentially having a real aptitude for a certain thing, whether it could be trained up, and you wouldn’t necessarily go out of the company. You’ve already got somebody who’s bought in, who’s very loyal. They’ve got the right culture and lots of other good attributes. So do you think the procurement face similar challenges when it comes to their supply chain? If they effectively, I mean, maybe it’s more of a challenge, because they’ve got much less visibility?
Pete Donaldson: 39:22 Yeah, I mean, I think that discovering who is actually in your supply chain, especially when we start to get down to the tail end of it is pretty difficult. It’s quite often software thing gone through manual invoicing checking with the procurement to try and understand what PEO is and what cost codes were actually associated back to what piece of work was being done. Was somebody really buying that much paper for their department? And producing it back to the point, I’m gonna give you a bit of a politician’s answer here, because I’m going to go back to the point you made before about procurement time and effort, because I think it’s related. So one of the advantages getting control of your services procurement spend is the time that allows back in the category managers day to get on with meaningful procurement activity. Being involved in the procurement and the construction of a statement of work for a one off piece of consultancy, or say a sub 100k SOW is not a meaningful use of that procurement person’s time. Having the time back to sit and look at the strategy look at supplier diversity, and to go back to that big four unassociated brands C suite relationship to get into that, to understand what work has been done, who is coming into the business how much are they charging, rather than the black hole that we’ve all witnessed within businesses where it’s an almost an untapped labor for coming in to condition work and procurement or on the catch up because they’re trying to write the SOW after the works been done almost. So for me, it’s about freeing up that time. And by freeing up that time, and it takes me back into the sensor it’s around, then that ties you into the undiscovered. So the undiscoveredles in our pieces all based on our accelerate proposition, which is employee consultancy, but very much targeted not on the typical graduate or first and second job of market, but very much targeted on social mobility, looking at people from the from areas and backgrounds who wouldn’t necessarily have the same opportunities to move into this type of work. And we work very closely with a company called infinity global to do that. It’s all around blind assessments. It’s very social media driven acquisition in terms of getting people to do the assessments, free assessments, see what people’s tech quote is, and their ability to be able to do some of these jobs. And ultimately, some people have actually learned a new skill while they’ve been at home on furlough, or they’ve been on maternity leave, or whatever the paternity leave, whatever the case may be, they may have been learning new skills, but they’ve got to reference more points to prove it. And that’s what it’s about doing. So if you think about that from procurer point of view, actually, it’s fairly similar. You will have in your supply chain, there is a tails, we all know it goes down into a long never ending tale, in some cases, and these consultancies might be delivering you one small piece of work for one of your locations somewhere in the UK or somewhere abroad. And they may be absolutely fantastic, or some of the recent cases that I’ve seen it, they’re actually overseas. They’re delivering the work that you need, in that employment without boundaries. They’re out in Poland or Estonia or Latvia, and they’re able to do some of this tech work. It’s more cost effective. It’s delivered quicker. And it’s better. Not always the case, but can be the case. And how do you uncover those little gems within your supply chain, that you then can give visibility and access to the rest of the business for, which allows you to move the business faster, make your relevant procurement savings if required, but ultimately, make sure there’s no over on the project spends, make sure that delivered on time, make sure it’s compliant, and everything follows the process. And you’re de-risking all the time there, while still giving yourself the opportunity for innovation to do things better. And I think, for me, it all comes back to the time, if you can automate some of the process, you can standardize some of it and you can give yourself visibility, you can start to see who is actually delivering the work to what standard, on what timescale, and at what cost.
Jonny Dunning: 43:26 You make some great points. And when you come back to the time aspect of it, and taking strategic procurement activities rather than transactional activities, it does come back to automation, it also comes back to, I think, maybe at some points in the past, procurement have been a bit protective. And I think that needs to potentially change, and people need to be more open. Because if they can control the information, if they can bring that information in, it just makes procurement more and more valuable. And even if you look at the C suite relationships with big consultancies - and by the very nature, they have the relationship with the C suite - that doesn’t necessarily need to change. But it procurement could inform the C suite on a much more granular level about what they’re getting from these suppliers, that even if the relationship stays primarily with the C suite, they can get more for their money. They can, maybe, understand and use them more because they’re actually delivering such good value to the business. And I think most procurement folks that I speak to, pretty switched on to the fact that they don’t really need to be scared of automation. It’s their friend. Because it’s all about automating the things that should be automated. And if you’ve got a procurement professional, there’s all these skills, all of these relationships skills, negotiation, financial planning, strategic and analytical skills, but that having to spend 80% of their time transacting with a manual process to put statements of work in place, it just doesn’t make any sense. And therefore, also they’ll have a lower perceived value in the organization because they’ll just be beings seen as transacting. And I had a real interesting conversation yesterday where someone was talking about the Deloitte CPO report. And it was basically saying that the top tier of CPOs still spend something like 60% to 70% of their time on transactional work rather than strategic, which is just crazy when you think about it. So if you automate the things that should be automated, give procurement more information, then that’s an absolutely strategic part of the business. And absolutely, that chief procurement officer, I religion chat with the CPO of [Inaudible 0:45:34] recently, and he was talking about this just in terms of the CPOs roll around that board table in the C suite of providing information and the flow of information in procurement is incredible because there’s so much external information coming in. But it’s also external information that is about your business as well. When you’ve got consultancies coming in and service providers coming in, they can give incredible feedback on what’s happening in the business. They can identify things from a very objective point of view that they see when they’re coming in and doing piece of work, interacting with teams, seeing how the business is structured, seeing log jams, and trying to solve problems. And I think if procurer can get more time, can go down this digital transformation path and get more time to spend, use their skills addressing issues like that, then there’s a massive value that can be created out of it.
Pete Donaldson: 46:27 I mean, the benefit of getting information from suppliers, Jonny, is massively overlooked, and especially these consultancy service providers, they’re coming in to your company to their piece of work. They go into other people’s companies to definitely sell work. Are we tracking their opinion of what it was like to get that piece of work done here? Was that harder than our competitor? Was that easier than our competitor? What made us good to work with? What didn’t make us? What should we change about our processes? Because we, all by very nature, like to look inward. We like to go, “Oh, this is only a problem here, or this is the issue here, or this is just specific to our company, or our whole industry is like this, we’ve all been there.” But actually, by getting soliciting feedback from these third parties, from the suppliers that come into our business to do this, the service providers, we can actually be within procurement in a really good position, because we could start to look, we could start to advise HR, we could start to advise the business on where some of our processes potentially are archaic, are stopping work getting done, are putting roadblocks in the way. And it can allow us to really derive a best in class way of working. So the next time we bring a consultant in, they get to the solution quicker, or they find it easy to work with us. And therefore, by very nature where there are more productive organization. And you start thinking, they’re the sorts of things that we are starting to really add strategic value through insight, rather than, as you mentioned, transactional output of create the SOW, email and to get contracts to change rather than the likes of a duck size. It’s quite quick. Change requests coming through how many levels of approvals are they going through, if any. And even that type of stuff, it’s all of those things, it’s like maximizing your relationship closer a real partnership. But you can’t do that if you spend all of your time head down in your email or in contracts.
Jonny Dunning: 48:18 Absolutely. And its incredible how many procurement teams, how many procurement professionals we see that are stuck faced with that. And you’ve got these RK processes. You know, if the C suite come calling and say I want some information on what supplier X has delivered, they’re literally digging out contracts from a shared file that may be well structured, may not be well structured. This should hopefully be a contract there. But it might have milestones, it might not. Stuff might have changed along the way, won’t necessarily be measured against what was originally... It’s just a complete nightmare for them. So but there’s definitely light at the end of the tunnel, there’s definitely hope, both in the opportunities to use technology to solve these problems as part of the solution to work with technology, but also in the appetite of not just procurement, but organizations to address this spend, and to put solutions in place. I guess, I definitely feel like the role of procurement and the value of procurement has been particularly highlighted over the last 18 months. And so one of the other things that we’ve kind of touched on a little bit just in terms of the different workforce channels, but I know that you covered it in the white paper where it is talking about agility. So it’s all about managing change and different skills, things changing rapidly customer requirements changing rapidly, the rate of innovation, the rate of digital transformation is just exponential. And so if we look at outcome based work, now obviously that’s a separate channel. So there’s inherent agility and having access to that channel gives you another way to get things done. And but do you think the model of a statement of work, do you think there’s a potential to be agile within that framework?
Pete Donaldson: 50:05 I think there’s, I think there’s a potential to be agile. Anyway, Jonny, but you’ve got to have the right mindset, and you’ve got to have the right way of looking at it. So we need to build ways of working that work for everybody. And as we said before, with the ability to draw down a call off POs, the flexibility of our clients, we’re seeing clients, even just within a transactional recruitment basis, say, Well, I kind of need to hire these people this year. But it could be a little bit here and a little bit there. And it’s kind of the same thing, when you’re looking at some of these projects. Actually, how I got the flexibility to engage a consultancy under an overarching statement of work. But can I then build in the milestones which might be slightly timed out deliverables? So like, in terms of a delivery, so this bit I need done now? Let’s get that done. But I can’t engage you again until x, y, and z has been done by either another party or an internal or a mixed work team. Can we do that sort of thing? Can we build up flexibility and then as soon as that’s done, I’m going to ring you up. And I want you to deliver this within a time period of whenever I give you the notification. So you can start building your own workflow/ workforce planning, that inherently will create some of the agility. But I think the real future for me is within these mixed teams like these work teams of where you’ve got permanent employees, potentially fixed term contractors, potentially even task based workers. And consultancies coming in, like, effectively squads coming in to do specific change programs that drive it forward. And I think that’s where you’re going to get the agility through. And how do you actually control that? Well, that’s going to have to be through a really good procurement processes, a really good technology awareness, and workforce planning, but your parent employees are providing constant. Your contractors are delivering you a certain proportion of a niche or skill set work or potentially just augmentation. They’re just pure staff augmentation. I need more bodies on the ground for the first six months to day, this then only nothing for three months. And I going to need another big six months bunch of people to take the project forward. And then I’ve got my consultancies coming in to give me real niche expertise at certain points in times. And it all fits under the one team and the one project management. And I think, to create true agility in the businesses, we’re going to need to start looking at how we work in an agile culture where we’ve got multiple teams on the multiple different employment contracts. But we’re thinking very much about what do we need to achieve? What skills are going to be required to achieve that, and the timeline for delivery and how we get through that? So I think that’s probably where I see agility coming into it. And these real building teams like these workforce teams through multiple different contracts, and if we don’t have your services procurement, and your task based workers on the rack, you’re going to really struggle learn to generate how that team works.
Jonny Dunning: 52:56 Yeah. I mean, if you haven’t got services procurement under control, you’re going to have risk, you’re not gonna be able to leverage it properly. It’s not going to be an effective part of that overall strategy. It’s interesting you talk about kind of squads there in terms of getting something done. I’m just going back to a point you made earlier about looking at the way that the military is, as it had to evolve. Its kind of resourcing strategy or how it gets things done. I mean, talk about complex teams and organizations having to interact. That’s massively complex in the military. So when it comes to this kind of transformation, so the military has to have agility in getting things done, stuff changes, situations on the ground change all the time. And when you compare that to the kind of the civilian world and the business world, what do you think are potentially the lessons that the organizations can learn from the transformation that’s had to take place in the way the military get things done?
Pete Donaldson: 53:58 Well, I think in some cases, what I’ve seen, Jonny, is some things never change in the military, some things always change, but there’s a new defense review about how the... You can see a lot of the language coming through in the new mid strategic defense review around, agile, digital battlefields, fighting the war on multiple fronts, because that’s how the whole way of working and doing a race change but also the nature of how the day engage reserves and consultancy. So there’s now opportunities in the army to effectively do a short course and come in as a tech specialists and never really be in the army as such be called on to fight and use to their cyber warfare programs and real cutting edge tech skills. Because it was about how do you [Inaudible 0:54:42] some of these... Some people might not want to come in and as a man shave every day, do all the fitness for around the art stuff, but they might be really good at in terms of the skills that they use. So it’s about how you create an offer for those people. And then looking at the reservists, there’s number of different levels of reserves. From those reservists which come in as individual augmented, so that my unit about to go on a deployment. So how do I increase my manpower across specific skill sets generate the lower end the real volume work, but I’m going to use individualized mentees from a reserve. But then how do I potentially need? I need someone who’s a real cultural engagement specialist to go work in environment. Well, actually, I don’t need that requirement all the time. Or if I do, it’s a very, very small piece of my team. But I need to have that on call. That’s another reservist’s thing. But there may be specialists. They’re in a much lighter commitment to those individualized augmentees. They’re on slightly different contracts between specialists and full time, allowing them to maintain a base level of ability, but be called upon to come in and do their specific task. They’re not going to be running around in the front line. They’re going to be engaging in different activities. And I think that if you look at it from that methodology, they’re still getting it right. But there is the power of being able to tell somebody what to do in that organization versus asking somebody to do it, which are all personnel, civilian roles. But the idea is the same: have your core bank of people, have a bunch of reserves. They’re your contractors. They’re your people you suck in give you real horsepower when you need it, and then let go when you don’t need it. How do I engage my consultancies and my service providers to give me real expertise on a specific project for a specific moment in time? Now, how do I retain that relationship, and learn about what else they’ve learned what other projects they’ve done? There should be a case of where those people can be submitted. I’ve just gone and done this amazing project somewhere else. And he’s like, “Oh, that’d be really good to share with our business. Where are those case studies from the service providers? And how we use those when we go into competitive bid?” We’re probably not sucking up anywhere near enough information where competitive bid, we’re going, this is my work, how cheap can you do it? Rather than this is my work? How well can you do it? What extra can you add? Where’s my innovation? And then holding that against the cost versus outcomes basis.
Jonny Dunning: 57:04 So if you look at it in a military context, it is fascinating. Because ultimately, it’s about getting a job done. And if you look at the military context, it’s like ultimate pragmatism. There’s no kind of fluff around the edges. This [Inaudible 0:57:17]. I’d say much more mandated. But applying that to a business environment is very interesting. When you get something like the pandemic, for a lot of businesses, suddenly, they really up against it. All the niceties, or [Inaudible 0:57:34], but they’re on a war footing, everything else goes out the window, they’ve got to get the job done to survive and to be able to thrive. And that just sharpens everything up for everybody. But in terms of the decision making process and the strategic approach to that, where does that sit within the military? For example, when you’re looking at all these avenues, and how you get things done, where does that sit in terms of lining that up and rolling it out to the places where it needs to go? Because in organizations, I see a real kind of mixture of opinions and a maybe a bit of confusion about... Some organizations have got strategic workforce planning functions. But there’s factors like, I think, actually, within your white paper, it talks about, agile workforce planning. And it’s taking it kind of to a different level. What can the business world learn from where those decisions are made in the military complex?
Pete Donaldson: 58:35 I don’t really know if that’s... I get the point. And I think this is the kind of the external lens versus the internal lens. I don’t think that whether that stuff is overly relevant. What I would say is learning from experience in terms of what I have seen work and what our habits work. So the Agile workforce planning is, it’s Adam Gibson, he speaks quite a lot about and I’ve known for a couple of years. And he wrote that content in the white paper for us. I bought his book, Jonny. And I bought his book when he wrote me a bit of an article. So we talked about strategic workforce planning is something you’ve mentioned now, if you work in some industries, where potentially the tail you can see 10 years out what ships I’m going to build or whatever else I’m going to do, you can start to plan ahead in terms of really be like that, versus some businesses, we don’t even know where we’re going to be in a year, 5 or 10 years. And the concept of Agile workforce planning from all of this is, not just looking at the single horizon, you know, in year, the operational workforce planning, maybe two year out and strategic workforce planning 2, 3, 4, whatever yours are, but it’s no can how you can plan across multiple horizons and look at it from short, medium or long term. And I think that’s where we need to try and get to as a business in terms of thinking right. I have to deal with a here are now. I have to be thinking about next year. I’ve to be thinking about the future. Well, actually data analytics, predictive models, everything we come back to, and everything that’s needed to be done is like, what skills am I going to need? Where those skills are need to be deployed? What is the delta between those two skills? And how can I build? How can I bridge that gap? What do I build by borrow, have bot, in terms of the automated or what built done in the business? They’re the sorts of things that we need to be starting to think about and where that message comes from. I’m a firm believer, and we’ve just gone as a business, we’ve been lead accredited, and we’re lead accredited to actually deliver training to our clients. So we went through a lot of process around wastage, time emotion wastage, moving to that lean methodology. And I think that’s going to be really key for our business and moving forward, because there is a lot of wastage in everything we do. And if you can create local change agency, you can use that. That’s what we’ve done with lean. Use those people, you train them, you create change at the local level that then impacts change holistically through the organization, top down change never really work. So unless you’re in some sort of real authoritarian review/regime, and a bottom up change is hard to do, because the exact sponsors in it, and it’s kind of thought you end up with this: it goes was described to me as middle management permafrost. Because bottom wants to change, the top isn’t really bothered and is issuing controversial directions, and then you get this middle bit. Like, this is my job. Do I really want to change? Do I want to get involved with it? And the two sides, unless you bridge that gap can’t meet. It is that permafrost. It never gets broken through. And that’s where a lot of change programs stall. CEO says, “This is what I want to do.” People on the bottom go, “Brilliant, let’s do this.” And in the middle of this, like, “There’s been difficult this. Don’t really want to do. It not really going to get involved.” And I think so when it comes to driving some of these change programs, I think you need to do an education piece or communication piece. And then you need to look at how you create change within local business, within the localized business unit. Because if you’re IT, if you’re change, if your data departments or wherever, I’m up for it, don’t have that local change agent, there will be resistance to it. And you’ll end up meeting that permafrost. And you’ll end up never really getting the full success of the program.
Jonny Dunning: 1:02:33 So when you say local, what do you mean by that?
Pete Donaldson: 1:02:36 I suppose I mean, to localize business unit kind of level. So within a business, there are people who have effectively no power, but there are people who have political power, position of power. And it’s the position of power as you can tell somebody wants to do, but the real power people are people who have that political power, the people to change the shape and influence teams and buy behaviors. And within an IT, if you have a couple of really good scrum masters, IT project managers, change managers for the business, who hold up capital across the whole department, they’re able to impact change. And if you can get them on board with a story, you can get other people on board of the story. It’s very similar to [Inaudible 1:03:17] at a time when I work with and that sort of warehouse high volume environment. If you didn’t have the shift managers bought in, you didn’t get the program success. You had to get. It didn’t matter what the top said, it didn’t even matter what the sort of holistic sort of overarching manager thought, it’s more about like, “Did those shift managers [Inaudible 1:03:39]?” The fact they can get me the right people quicker. It’ll turn out with the correct PBA, deliver the shop, I hit my outputs for the day. And that’s what needs to happen. Now, if you get the change from those, they encourage their friends and the other people on the other shift, potentially excuse it. And then that starts where you get the program buy in, and then you start creating efficiencies. By also listening to the feedback of those people, you can create the iterations to the program that make it better, because we will never get it right when it’s first deployed. We have to take the impact of the business. And in a very agile way, we have to iterate it, but we have to start. We’re never going to get it perfect. We have start and then fix it. Start and fix it. And create those iterations.
Jonny Dunning: 1:04:22 Yeah, interesting. And it comes back to what you were saying earlier about just getting started, getting moving with something. Of course correct it as you go. Okay. So just to kind of like bring things together and round things up a little bit. You obviously seeing the change within what you’ve been dealing with in a contingent workforce, bringing services, procurement, much more into that remit and the two kind of coming together, from an MSP kind of service provision point of view, What are your thoughts on how you see that type of offering developing over the next 12~18 months in light of what’s going on at the moment?
Pete Donaldson: 1:05:04 Well, I think there’s programs have to be are probably going to become more strategic. So some of the research that we’ve seen in the market at moment and what we’re seeing happening is, we’ve seen that [Inaudible 1:05:14] went to this real strategic place workforce planning, embedded internal mobility, everything. And now as almost because of the impact of COVID, it has almost become more transactional again, and will probably turn back to being a bit more strategic. I think procurement and contingent labor is at that the nexus point, as were up where it was where. You know, MSP has been reached of all value now. So it’s at the lowest sustainable point, in most cases. We’re seeing when you deal in a marketplace, you’re talking about double digit points of represented, difference in suppliers in terms of what they’re doing their payroll while they’re doing the MSP, there will be slightly further automation, but you can’t really offshore anymore, you can’t rent out payment terms anymore, you can’t do anything else, in fact, a real approach across the companies lobbying the private sector to agree a payment terms in line with the public sectors payment terms to actually because cash flow is becoming ridiculous, and the cost of cash, you know, people are worried about that with inflation, with everything that’s going on in the world. You just never know what could buy you and 90 day payment terms could then you see out of pocket quite a bit. So I think, MSP as a traditional vehicle is as commoditized as there’s going to be, and there’ll be some tweaks and nuances over time, I think the ability to go and find, train and deploy some of these niche timescales is where it’s going to be. And I think that even from a procurement basis, for services procurement management, I think that just tracking off the headcount and who’s in the business is going to be the thing that everybody wants as standard. It will be the next thing you know. And I would say within a period of 18 to 24 months that will largely in big companies become commoditized, because it’ll become part of the service and same as MSP. And their real value will be given from the sport of this sauce, the contract and driving forward at all books deploying, as a contingent work was provided, deploying almost your own procurement category managers who are specialists within certain areas of human capital procurement and understand how it works, unknown real value to the business, and how we deliver that for what, I think that’s going to be the real change. I think that for the next 12~18 months, volumes will remain reasonably static. I don’t see most of that change. And I think we’ve gone through the IR-35 dip. And there’s a number of different things that are going on across it now. But certainly within the UK, I think that it will continue to flat line almost, and then people will be really looking where my value at is now? Well, my value is in services procurement, because I can’t rent this anymore. If we look at the Americas, then finally direct sourcing is becoming the conversation out there now. I think that they will quite quickly catch up with and potentially leapfrog some of the European businesses, because they’ll want to get statement of work under control at the same time.
Jonny Dunning: 1:08:20 Yeah, very interesting. Yeah, direct sourcing is always a funny one. I think there’s many different interpretations of that. And I think a lot of companies when they’re talking about direct sourcing, they wouldn’t necessarily have the same idea about it as I might have. And there’s been a lot of kind of lip service paid to direct sourcing. I think, in some cases, it kind of doesn’t necessarily align with the kind of MSP model. Whereas I look at statement of work and services procurement, and I just think it’s a Greenfield opportunity. There’s so much value that can be created for and so much savings. And you’re right, when you talk about MSP offering. It’s a very mature offerings. And they have been kind of driven down to the lowest common denominator offensively where they’re very, very efficient services. And they’re low cost. And ultimately, when you’ve got it all buttoned up, it’s pretty difficult to keep continue making more savings every year. That’s a pretty difficult task to do. But there’s just so far to go with services procurement. And I would expect it to follow a similar type of evolution to the contingent workforce, both from a technology point of view, where it’s at the early stages, but common adoption will happen quite rapidly. And things like COVID will help drive that. But also from an MSP provision, for a lot of companies, it’s just going to be easier for them to get someone to help them with this first than necessarily even think about trying to do it themselves. And actually, in the long term, that might be the best way for them to do it to have a provider who’s just kind of the custodian of what’s going on bringing in technology and bringing in expertise and process to help them do that so that it feeds that procurement function. They can take all the information. They can put the strategic insights into help drive the business in the right direction. So I think, it’s gonna be a hugely exciting time. And I think, as I say, the big changes that have happened, it just pushes things along.
Pete Donaldson: 1:10:10 It does make and if you think about what people are trying to achieve with the services procurement, in the most simplistic layman’s terms, it’s a bit like the first days of MSP where you didn’t know what to do. So you brought in a vendor neutral MSP, technology and a process. And for some people, that is how they’re going to get over services procurement, bringing the technology in a process. And then instead of direct sourcing, start looking at capacitive bid and running those processes properly. And under understanding the tail the spend, and where it goes in. I kind of explain it in layman’s terms. A lot of people that think about the first time you did an MSP, it’s as scary as that, but it’s largely the same simplicity now that we know much more about it.
Jonny Dunning: 1:10:56 Yeah, wise words. And I think, very much the sort of thing that we’d echo in the sense of get started, keep it simple, do something, make it easy for everybody. If you’ve got people doing things already, just automate it, get visibility, but you don’t have to make it get in the way of everybody doing what they need to do by managers and the suppliers. Just get the information and start to understand what’s happening. But yeah, I think there’s some amazing opportunities coming up in that space and, and some great attention on it, which is really exciting. But anyway, listen, thank you so much for your time. I really appreciate that. Some really excellent insights there, some great anecdotes, and just really interesting to get your opinion. Really appreciate your time.
Pete Donaldson: 1:11:36 A pleasure to be here tonight.
Jonny Dunning: 1:11:38 Excellent stuff. We’ll wrap it up there. Have a good rest of the day. And hopefully we can catch up again soon.
Pete Donaldson: 1:11:44 Yeah, no worries, mate.
Jonny Dunning: 1:11:45 Thanks a lot. Bye bye.