How is your crystal ball working lately? If you are budgeting next year’s contract labor expenses, planning for the future may seem harder than ever for several reasons:
· Billing rates are changing rapidly and will most likely continue to do so well into 2021.
· Demand for specific skills is shifting quickly (especially in IT) and will continue to be unpredictable in the near term – read our latest blog on Demand for U.S. Contingent Workers.
· Publicly available labor market data is not reliable, and many economists don’t have access to real, transaction-based data to base their predictions on.
Given that the extended workforce is a top-three spend category for most large companies, improving contingent worker cost projections can unlock better planning for the full enterprise. Brightfield helps our customers reduce guesswork on the two key drivers of this spend: how many resources they will need, and what the workers’ hourly rates will be.
Projecting Worker Quantity by Role & Skills
Budgets are often based on last year’s gross spend or worker counts and average hourly rates. The data and trends from last 12 months aren’t going to be help much for 2022. These summary projections are marginally better than nothing but fall short because both rates and worker demand are highly volatile for many roles in this labor market.
Brightfield’s analysis begins with importing historic assignment data into our TDX platform. Using skills and job descriptions from actual requisitions, TDX normalizes job titles between the company’s current assignments, historic worker records, and the marketplace. (See our post on how TDX delivers a pain-free way to update your workforce taxonomy.) When like-skilled workers are labeled accordingly, companies can evaluate their recent usage of specific roles—even if naming conventions have changed or been inconsistent.
With standardized role titles in view, leaders can adjust projections for organizational factors: special events, projects, or strategic shifts that will impact the size and mix of the contingent worker program. Expected growth may be high for some roles, and steady or negative for others.
Using the Best Available Rate Information
Staffing levels should be considered in tandem with rate projections so that total cost can be considered in the planning process. Because the roles have been normalized, they now align with Brightfield’s universal taxonomy and database of current transaction data from 40% of the Fortune 500 companies. TDX provides current rates and applies AI to a database of over $400 billion historic transactions to model expected future rates.
From the solid foundation of expected usage and market intelligence, Brightfield experts work with customers to finalize projections and bring additional insights and best practices to the planning process. No budget is perfect, but through data and process we can dramatically reduce the guesswork.
How Brightfield Can Help
If your budgeting process feels like a shot in the dark, you are not alone. But help is available. See how Brightfield can shine a light on your extended workforce program spend for the coming year by leveraging TDX, the world’s largest source of reliable global data on the extended workforce.
If you would like help with budgeting your contingent worker needs, contact Brightfield now!