Companies using temporary contract labor can reduce expenses by as much as 30% by adopting spend management techniques that better organize and rationalize the employment process, according to a new report by Aberdeen Group, a leading research and consulting firm serving major corporate technology end users around the world.

"As companies in every industry look for opportunities to improve operations and achieve greater efficiencies, many have turned to contract labor as a way of relieving employee overhead costs and liability," said Christa Degnan, Aberdeen's supply chain research director and author of the report, Category Spend Management: Contract Labor.   "However, by not properly managing the sourcing, hiring, managing, paying and tracking of contract labor, the process can become an unwieldy and costly proposition - diminishing its returns.  

"Our research has found that companies can reap substantial benefits by applying rigorous spend management strategies similar to those used by manufacturers in production procurement to non-production spend categories, such as temporary labor," she added.   "By doing so, companies increase their negotiating leverage, are able to make informed buying decisions and won't pay more than they have to."

According to the report, enterprises with strong category spend strategies can save 5 to 30 percent in overall contract labor spending by adopting processes that help

  • Identify a broader range of qualified candidates
  • Reduce inconsistent hiring processes throughout the company or "maverick" labor spending
  • Reduce individual candidate sourcing and hiring cycles
  • Provide better analytics on spend rates and trends
  • Reduce the process costs for labor requisitions.

Category Spend Management: Contract Labor is designed to help business executives assess the maturity and competency of their contract management model and identify how improving their category management strategies may help. The report also provides actionable strategies to determine the right approach for an enterprise and how best to implement category management strategies to maximize and sustain total cost savings.
To obtain a free copy of Category Spend Management: Contract Labor, please visit

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