You’ve Optimized the Manufacturing Supply Chain—What About the Talent Supply Chain?

Just as effective management of the manufacturing supply chain has been critical to OEMs’ success in recent years, optimization of the talent supply chain is also important to organizational performance. As device makers face a convergence of market challenges, ensuring they have the right people at the right time for the right cost will provide the agility and skills needed to overcome such difficulties.

Against a disruptive backdrop of slowing healthcare spending (as a percentage of GDP),¹ aging demographics,² and growing demand for innovative devices and diagnostics, the medtech sector is rebalancing workforce composition to achieve an ideal mix of employees, contingent talent, gig workers, and services procurement. For some, this has meant embracing more non-permanent resources. Such an approach enhances cost-effectiveness, agility, access to specialized skills, and assurances for business leaders that resources will be available to support their growth initiatives.

This is unfolding at a number of global OEMs Randstad supports, where workforce optimization has become a linchpin of their value creation strategy. Indeed, some employers are achieving considerably better returns than competitors in ways beyond savings. For instance, requisitions are filled more quickly, reducing opportunity costs. Access to in-demand skills is expanding, enabling contingent workforce leaders to better serve internal customers. And through externally managed services programs (MSP),³ these organizations are more compliant and have greater visibility of their flexible resources.

The talent supply chain is pivotal to these gains and to achieving contingent workforce excellence. However, companies often fail to recognize all of the key elements that make this happen. Strategic and agile partners, proper governance, timely market intelligence, and the right technologies are essential to a world-class flexible talent program. OEMs must align each of these to their goals for success.

Doing so is also beneficial to the permanent workforce. Many medical device employers consider their MSP and contingent workforce program to be an excellent and sustainable feeder pool for permanent hiring, which can result in lower recruitment costs, faster time to productivity, and shorter fill times. To establish such a win-win model, consider some of the critical elements of a successful talent supply chain.

Strategic Talent Suppliers

Just as electronic component manufacturers, extrusion providers, and sterilization specialists are key vendors to device manufacturing, the suppliers of contingent talent are also integral to an effective contingent workforce. Beyond fulfilling requisitions, a strategic supplier also serves as an advisor that can greatly influence program goals and outcomes. For instance, a master vendor may manage other talent providers to ensure timely and cost-effective fulfillment. Moreover, strategic partners often instill best practices for talent attraction, compliance, cost avoidance, candidate diversity, and more.

A strategic partnership, however, takes time to cultivate and shouldn’t be regarded as a typical vendor. Rather, trust, reciprocating benefits, and a commitment to transparency are fundamental to good outcomes. While this requires considerable commitment on the OEM’s part, our experience shows these partnerships deliver value many times over the effort it takes to make them successful.

It’s worth pointing out that strategic talent suppliers are increasingly challenging to establish, yet more critical to the contingent workforce. According to Staffing Industry Analysts’ 2024 Workforce Solutions Buyer Survey, 68% of employers are consolidating their talent supply chain, but 50% are exploring new vendors as well⁴—two seemingly opposing trends. What this indicates is employers are dissatisfied with existing partnerships but are open to finding new ones. It’s a problem that OEM procurement leaders grapple with in other parts of their supply chain but may require more consultative support when it comes to talent.

Program Governance and Compliance

Contingent workforce program complexity is rising due to a number of factors, including scope expansion, regulatory pressures, utilization of alternative work arrangements, and others. This means companies must be more rigorous around workforce compliance and governance, especially when utilizing flexible resources. Ensuring talent supply chain practices adhere to regulatory and company mandates not only minimizes risk but also leads to economic benefits such as reducing rogue spending and establishing standardized rates.

One of the biggest concerns for contingent workforce leaders is the misclassification of talent, which can lead to significant fines under the Fair Labor Standards Act and other regulations. Additionally, employers must always be vigilant about the source of their flexible talent to comply with child or forced labor laws. Effective supply chain governance provides the right risk mitigation through avoidance, reduction, transfer, or acceptance, ensuring both buyers and their vendors adhere to best practices.

Talent Intelligence

Organizational agility hinges on market intelligence. Knowing whether talent is available for any particular market and what the demand is for certain skill sets, as well as local rates, geographic preferences, and other insights helps contingent workforce leaders make better, informed decisions. Such intelligence facilitates decision-making on whether to “buy, build, or borrow”5 labor for their needs at a particular time. In recent years, data aggregators have enhanced market information to enlighten human capital leaders on the talent supply chain, including huge data sets on job postings and candidate profiles. Such knowledge also provides an advantage when negotiating with suppliers on rates and other terms.

Beyond external data, companies have become more effective in creating insights from internal workforce data. Even so, contingent workforce spend is often hidden from the view of human capital leaders, especially regarding statement of work expenditure. This is why it’s important for organizations to better track, categorize, and manage flexible labor costs.

Program transparency has a significant impact on supply chain strategies, and it’s one reason why most companies (61%) surveyed by Randstad in our 2024 Talent Trends research are investing more in predictive analytics and external market intelligence.⁶

Technology Enablement

Effective management of the talent supply chain is only possible with powerful tools and systems. According to Staffing Industry Analysts, 81% of buyers surveyed currently use a vendor management system to administer their contingent workforce program, and another 16% plan to seriously explore the implementation of such platforms. A majority (60%) have also invested in talent analytics and benchmarking tools while 52% have purchased online job advertising platforms.⁴

It’s not surprising most companies have made significant investments in innovative technologies to support their talent supply chain strategies. In our experience supporting contingent workforce programs at many global enterprises, human capital leaders recognize the positive impact innovation can have on various aspects of the talent supply chain, including vendor management, talent marketing, direct sourcing, talent pooling, candidate assessment, and others. In fact, 98% of companies we surveyed through our Talent Trends research say technology adoption has enhanced the attraction, engagement, and retention of talent.⁶

As medical device makers face growing market challenges, talent will be central to executing on their ambitions and goals. At a time when adding headcount may not be feasible, the use of flexible resources is an ideal way to meet business demands without the overhead. Companies that go down this path, however, are most successful when they optimize the talent supply chain, are clear about their contingent workforce strategy, and make sure they do so in a compliant and risk-neutral way. 

References

1. tinyurl.com/mpo241041
2. tinyurl.com/mpo241042
3. tinyurl.com/yc83d5xs
4. tinyurl.com/mpo241044
5. tinyurl.com/bdezp2tx
6. tinyurl.com/mpo240636

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MORE FROM THIS AUTHOR: Talent Experience: Medical Device Firms’ Next Competitive Advantage

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Ruby van den Hoff is the managing director of EMEA-based global accounts and life sciences for Randstad Sourceright, part of Randstad Enterprise. She works with Fortune 500 companies to develop and deliver solutions that improve and drive strategic access to talent. van den Hoff has more than 15 years of experience in recruitment and workforce consulting with major global clients and has worked more than 10 years delivering contingent and permanent solutions for major life sciences companies. The emphasis has always been on improving the quality of her clients’ talent acquisition strategies.