August 24 - 25, 2021
Here's How Maverick Spend Can Be Managed in Your Multi-Channel Talent Strategy
Brought to you by WBR Insights
The freelance economy has been a hot topic for a few years now.
It started with freelance service providers such as Uber and Deliveroo, but is now expanding to all levels of industry. Of course, temporary staffing has always been around, but the modern digital world is making it more ubiquitous and practical than ever before. These days, thanks to a host of contingent talent platforms, it's easier than ever to hire a professional for a single job for a limited period.
However, with these new levels of simplicity comes a new threat which can see carefully-planned budgets go out the window - maverick spend.
In a nutshell, maverick spend is any expenditure of business funds which is either poorly managed or not managed at all.
Sometimes known as rogue spend, this expenditure falls outside of normal budgetary planning. It should be clear to anyone with a modicum of business sense that any spend which is not properly planned and/or accounted for poses a potential risk to the ongoing financial health and prosperity of a company.
"Maverick spending can be intentional, such as when individuals simply refuse to follow the proper procurement process," writes Purchase Control in a blog post. "It can also be accidental, due to miscommunication in your supply chain, poorly structured workflow, or a lack of an effective procure-to-pay program. Whatever the reason, maverick spend can harm your business by creating unauthorized expenditures, creating logjams in your workflow, and draining resources."
Contingent staffing is particularly susceptible to maverick spending. As challenges arise in the day-to-day running of a business, it is often necessary to react quickly to solve them, and this often means hiring extra people on the spot.
For example, if a catastrophic error occurs with your online portal and you don't have a website designer on staff, you will need to acquire the services of one quickly to avoid lost revenue from the page being down, or arguably more serious concerns such as data leaks.
This often means there's little time to go through the normal approval procedures, and will regularly result in a manager making a snap decision to go ahead with the hire. The money laid out for the contingent staffing will then be designated as maverick spend.
However, while it may be tempting to crack down on maverick spending with an iron fist, it could be beneficial to take a more open-minded approach.
First, technology can be deployed to cut down on the need for maverick spending. There are many digital platforms available which can streamline the process of authorizing discretionary spending and create a process-led, multi-channel talent acquisition path. When additional people are needed in an emergency such as the one described above, it becomes much easier to gain authorization and to create an official paper trail for it.
However, one should also look at the reasons maverick spending occurs in the first place. Often, maverick spending occurs because a need exists in the organization which is not being met by the current talent structure.
"Ultimately, rogue spend should be looked at more as an unmet need, instead of being an issue of non-compliance from stakeholders," writes Nick Heinzmann for Spend Matters. "When requisitioners go off the ranch to find freelancers or services, it's because they have a requirement they need to meet quickly. So, when internal stakeholders contract for work through online intermediaries, they're trying to solve a problem that they feel the available options can't."
This means decision makers can look at the reasons for maverick spending and make sure the tools and/or people are in place to ensure its use is needed on far fewer occasions.
Maverick spending is clearly an issue which needs to be addressed, especially when it comes to contingent staff procurement. However, rather than eliminate it entirely, it can be effectively managed with technology. In this way, instead of being a headache, it can become another useful channel in your official talent strategy.
Maverick spend and multi-channel talent strategies are set to be hot topics at Contingent Staffing 2019, taking place in July at the Hyatt Regency Minneapolis, MN.
Download the agenda today for more information and insights.