For Sourcing & Vendor Management Professionals

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	June 23, 2009 Take A Back-To-Basics Approach When Renegotiating Contingent Rates by Patrick M. Connaughton with Andrew Parker, Philipp Karcher	Average: 9  (2 ratings)

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Executive Summary

Current global market conditions have sourcing and vendor management professionals asking if the contingent labor rates they negotiated a year ago are still competitive, if other companies have had much luck getting new discounts, and how to best approach suppliers whose rates have already been beaten down over the years. Overall, our interviews unearthed good news for sourcing teams — contingent staffing demand has fallen in many countries, rates are dropping, and negotiations are going smoother than expected. There's not some magic formula for success either — SVM pros are taking a back-to-basics approach in negotiations by setting realistic goals, pushing for supplier margin transparency, and ensuring a competitive environment exists. The results? Expect rate reductions ranging from 3% for administrative type roles up to 10% for higher paid IT resources.

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