pharmaceutical enterprise saves $2.5 million and identifies $50 million in rogue spend in just 6 months with new contingent workforce model.

powered by talent intelligence, a flexible contingent workforce cost model maximizes savings and engages specialized talent amid fierce competition

client 
A healthcare, pharmaceutical and biotechnology enterprise

challenge
The company needed to deliver $2.5 million in cost savings in one year while filling highly specialized roles in life sciences, technical and manufacturing amid rapid technological change.

solution
A managed services program (MSP) delivered by Randstad Enterprise introduced a bill rate model for contingent workforce management, offering more flexibility than the traditional markup model, where markups are contractually fixed. This bill rate model allows for customized rate negotiations and competition among suppliers, resulting in cost savings, access to specialized talent and a reduction in rogue spend.

key results
The company saved $2.5 million in half the projected time, engaged 89 workers (65 scientific and 24 professional), achieved 8% average savings per hire, identified $50 million in rogue spend, and improved supplier engagement and cost control.

balancing savings and specialized hiring in a fast-changing landscape

A global healthcare, pharmaceutical and biotechnology enterprise faced dueling challenges: to deliver $2.5 million in cost savings within one year while simultaneously filling highly specialized roles. The company had to balance aggressive cost control with lean growth in an era of accelerated technological transformation. How could it dramatically reduce costs while hiring the niche life sciences, manufacturing and clinical talent it needed to develop life-saving vaccines?

With high stakes and high demand for specialized talent in a fiercely competitive market, quick innovation was essential. The company — wanting only novel solutions driven by market intelligence and data analytics — sought external experts to devise a new approach to achieve its complex, contrasting goals.

bill rate model: flexibility, cost control and competitive pricing

To transform its talent acquisition strategy, the company implemented a managed services program (MSP) with its long-standing talent solution partner, Randstad Enterprise. Chosen for its sophisticated talent intelligence, extensive supplier network and global insights, the MSP was tasked with delivering innovative solutions to meet the company’s ambitious cost-saving goals.

After analysis of the company’s cost structures, the MSP recognized that its fixed-rate markup model was insufficient for the unique requirements of hiring specialized technical and creative roles. A more flexible solution would help the company achieve its aggressive goals: the bill rate model.

The distinct differences between the two cost models reveal why:

• markup cost model
  The company pays a fixed percentage margin for all roles, regardless of the role's complexity or the time to fill. This can lead suppliers to overpay talent, inflating the company’s overall costs.
• bill rate cost model
  The company sets a maximum agreed-upon rate for each role, allowing suppliers to negotiate with candidates and compete with each other. This gives the company full control over costs and encourages competitive pricing.
  
  

A bill rate model delivers substantial advantages for specialized technical talent suppliers. Specialized talent is hard to find and competition is fierce, which significantly increases the time and effort required to fill the role. To compensate for their investment, talent suppliers are incentivized to pay contingent professionals as much as possible to make placements profitable. In a markup model, without the flexibility to negotiate, firms may overpay candidates or turn down unprofitable searches, leading to higher talent costs and time to fill for employers. Even lowering markup percentages can create an illusion of cost savings, as suppliers may raise wages, further distorting the actual cost of talent acquisition.

To overcome these obstacles, the bill rate model offers flexibility using wage analytics and historical cost data to set fair maximum rates for specific roles. This gives talent suppliers the flexibility to negotiate with candidates to compensate for their investment without inflating the costs. By aligning with actual market value and enabling flexibility, the model fosters cost-effective sourcing, prevents overpayment and promotes healthy competition among suppliers, leading to higher-quality candidates and reduced overall costs.

Another key advantage is the model’s ability to adapt to market shifts. As supply and demand fluctuate, organizations can capitalize on lower rates when there’s an oversupply of workers. Unlike a fixed-rate markup model, which locks in prices, the bill rate model allows flexibility to adjust to real-time market conditions, ensuring competitive rates that reflect current labor dynamics.

Additionally, by increasing access to niche suppliers, companies can expand their talent pool of candidates for specialized technical roles. The model also provides greater transparency by offering visibility into rogue statement of work (SOW) spending, helping control costs and reducing co-employment and compliance risks.

With regular rate card updates, the bill rate model ensures continuous benchmarking against market conditions, helping control wage inflation and drive long-term savings. This dynamic approach balances the need for specialized talent with cost-saving strategies, positioning the company for success in an evolving marketplace.

$2.5 million savings in 6 months — a game-changing approach to cost control and talent acquisition

Armed with the right talent intelligence, the pharma company was able to make a smart transition to the bill rate model, using a data-driven approach to identify roles with the highest cost-saving potential. Jobs with significant pay variability, where the gap between the lowest and highest rates was wide, were prioritized for their ability to offer more competitive, consistent rates.

By blending new market data with historical wage insights, the model sets minimum, maximum and recommended rates to ensure precise cost-saving targets while keeping pay rates competitive. For example, Software Engineer roles, with a 60% pay variability, benefited from this model, allowing the PMO to leverage both market trends and historical data to negotiate consistent, cost-effective rates.

The switch to the bill rate model for specialized roles proved transformative. In just six months — half the projected time — the company achieved $2.5 million in savings, engaged 89 workers (65 scientific and 24 professional), and saw an average savings of 8% per hire. Additionally, the MSP helped the company identify $50 million in rogue spend, further enhancing future cost control.

The bill rate model provides a dynamic approach that balances the need for specialized talent with cost-saving strategies. By adopting this model, companies can secure top-tier talent, manage costs effectively and position themselves for success.

For the pharmaceutical enterprise, transitioning to a bill rate model reduced costs, improved supplier engagement and enhanced hiring manager satisfaction. Through its enhanced contingent workforce strategy, the company is engaging niche talent at market-aligned rates, ensuring continued success in an ever-evolving global landscape.