More than ever, current trends are driving a need for companies to re-evaluate the right work location for non-employee labor and to efficiently re-balance their extended workforce location strategies – to save costs, increase contract worker engagement and improve business outcomes.
In our most recent webinar, Brightfield’s Director of Customer Education (Elizabeth Slack) and Market Director (Jill Norris) discussed what makes for an effective extended workforce location strategy.
For definition, location optimization is the practice of identifying the optimal location to source and hire qualified talent. The specific goals of location optimization can vary depending on program needs and objectives, with many programs utilizing multiple strategies to best blend cost saving and sourcing opportunities without sacrificing quality.
Enhancing location optimization strategy has become more critical than ever as companies are looking to navigate the changing worker landscape. Understandably, between February and July of this year Brightfield’s Active Contingent Workforce Index showed a slight dip in active contingent worker assignments due to COVID-19. Between August and November, however, we saw a slight increase in the number of active contingent worker assignments compared to January 2020.
From an IT perspective, out of the top 10 fastest growing metropolitan statistical areas where we’ve seen net growth in IT assignments between June and November, Minneapolis and Raleigh-Durham saw the greatest increase in new IT contingent worker assignments. Conversely, traditional IT hubs such as Silicon Valley and New York did not even make the top 10 list.
Elizabeth and Jill also discussed three of the most common barriers that get in the way of deploying an efficient location optimization strategy which include:
- An outdated or unmanaged global taxonomy, making internal location rate comparisons impossible
- Limited access to global market rate data for benchmarking location rate comparisons, leaving leaders unequipped to determine cost efficient locations
- Unreliable information on speed and quality benchmarks, rendering leaders unable to determine tradeoffs between cost and quality
To fully understand how a well-developed location optimization strategy can serve companies, our speakers provided an example. A F100, U.S. technology company with a large, globally dispersed contingent workforce was suffering from cost overruns due to inefficient location-based hiring practices. Using Brightfield’s $400B in transactional data, we were able to identify sourcing optimization opportunities to transition work to traditional staff augmentation in lower cost locations, generating $25M in realized savings. Furthermore, we identified $100M in potential savings through moving future resources offshore.
In order to best achieve location optimization in your organization we recommend starting by harmonizing your global taxonomy to align job descriptions with titles. Then, identify roles with location flexibility, to hire in more cost-efficient areas. Finally, be mindful of the relationship between cost and performance factors, as cost cutting, independent of performance, could cause unintended consequences in the long term.
Brightfield can offer companies automated taxonomy management, assignment and skill-based global rate data, and on-demand performance benchmarking across 35 countries, including 40% of the F100. If you are interested in learning more about location optimization, Request a Demo or view the entire webinar recording here: Location Optimization.