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2019 was the year of compliance, 2020 will be the year for more

In 2019, there were immense changes to Australia’s staffing industry including:

  • Significant challenges with implementation of Labour Hire licensing

  • Legal and compliance requirements for recruitment owners greater than ever

  • Global gig worker economy estimated to be valued at $4.5 trillion

  • Spend on statement of work in Australia is said to be four to five times that of contingent labour

In 2020, we can expect:

  • Continued influence of procurement on labour supply chain

  • Burden of complex reporting requirements only set to increase

  • Expectations of a national labour-hire framework

  • Maintaining commercial footprint will be more about speed (and accuracy) to market

As we draw closer to year’s end, this time of year certainly provides us a great opportunity

to reflect on the challenges we have faced and conquered this year and prepare for the new “unknowns” that may be forthcoming in 2020.

This year has, not unlike years past, again given rise to significant changes for the staffing industry in Australia.

We have seen the introduction of Labour Hire Licensing in three Australian states, the ATO’s Single Touch Payroll roll out and increased focus on governance and compliance around all industries.

We have seen large enterprises named and shamed for under-payment of wages, some which I’m sure shocked us all. Celebrity chef George Calombaris was arguably the highest profile individual caught up in claims and charges of non-compliance.

The steady emergence of online employee/contractor engagement platforms continue to raise questions around the “what is the way and what is the wrong way” in the way B2B and B2C transactions play out.

Foodora, Deliveroo, Airtasker, Upwork and Uber Eats are common apps we use on a daily basis but there remain questions in this heavily legislated area of our country around how the employment/ employee/ contractor model fits in to our economy?

Clearly there is a demand for these services and as consumers, convenience is what everyone wants. But how do these companies meet their legal obligations? Who is managing this and who is it impacting on?

At Ratescalc we noticed a surge of PAYG fixed term (or as I used to call it Limited Tenure) quoting and engagements in readiness for a change of government, which accounted for as much as 25% of all quotations flowing through our platform.

The WorkPac Vs Skene court case caused shock waves across all industries, in particular ours, and started many conversations with business leaders who are developing new supply models causing a monumental shift for us.

There is no doubt that the procure-to-pay model is having a significant effect on our industry and it is very clear that this will be more evident in 2020.

Risk mitigation and de-risking the relationship between the principal and the supplier has been evolving and, as with other countries around the world, it is driving the behaviours of engagement.

In my view the emergence of “statement of work” and “task-based outsourcing” will accelerate in 2020.

We have witnessed many industries head down the path of engaging master and neutral vendor models, including all levels of government and the health sector where vendor management and the use of MSP technologies dominate these markets.

The end result of this is more work, more governance, less margin and more headaches as an important cog in the wheel of the supply chain eco-system.

This is where we as an industry need to get more savvy around managing costs, the cost of delivery and really understand the “new world” of supply.

The stock standard offering of supplying of temps and contractors will not disappear entirely, but I can see an increased focus on task and project supply where even the smallest business will be driven more to a purchase order supply model. Companies engaging in procurement will continue to run with the mantra of de-risking the relationship.

What this means for our industry can be summed up as:

  1. Agencies will need to have systems and processes in place to meet these needs to win work and evolve as a true contracting organisation;

  2. Have the ability, enabled with the use of the appropriate technology, to interact with these procure-to-pay systems;

  3. Review current pricing processes and policies around these; the costs of delivery are on the rise and our procurement friends know it;

  4. Despite the transactional feel of the new world, it’s just a change of process and does not remove the skills and ability we all have to be the best at what we can be - we just have to pay more attention to the detail and the commercial realities;

  5. Invest in business intelligence (BI) and reporting capabilities as it is an area you need to be on top of moving forward and it has to be accessible, accurate and flexible; and

  6. Be careful what you say yes to when dealing with new clients or submitting tenders. The tricky introduction of mark-up instead of margin commenced several years ago, however the focus on PSAs requesting specific pricing delivered their way, has been designed to benefit the purchaser not the supplier.

My view is that as the complexities of supply continue to evolve business owners and leaders also need to set time aside (Yes, more time aside!) to really understand the new realities we face.

For our business at Ratescalc, we continue to meet the market requirements aligning our technologies to the variables as it is constant and ongoing and will continue to shape the future of work as we know it.

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