The way organisations approach contingent labour in procurement is changing, but not at the same pace for everyone.
Some organisations have already made a deliberate shift away from traditional, seat-filling contingent models and towards flexible, fractional and outcome-based specialist capability. Others are still operating largely as they always have: engaging contractors for extended periods, often inside IR35, embedded like employees and at increasing cost.
What we’re starting to see across the market is a growing performance gap between the two.
Those that are redesigning their approach are gaining access to better talent, delivering outcomes faster and retaining far greater commercial control. Those that aren’t are increasingly at risk of being left behind.
The Legacy Model Is Starting to Show Its Limits
Historically, contingent labour in procurement has often been used to backfill roles or provide continuity – effectively replacing permanent headcount on a temporary basis.
In today’s environment, that model is becoming harder to justify.
Procurement leaders are being asked to deliver targeted cost reduction, manage supply risk, deliver against ESG agendas, lead transformation programmes and support broader business change – often all simultaneously. These challenges don’t always require long-term additional headcount. Often, they instead require deep expertise applied precisely, over a defined period, against a clear objective.
Yet many organisations are still defaulting to engaging generalist contingent resource for extended durations, at rising day rates (particularly where IR35 has pushed roles inside scope) and with limited clarity on outcomes.
What Leading Organisations Are Doing Differently
More progressive organisations are actively redesigning their contingent labour strategies around capability, not capacity.
Instead of asking, “Who can we bring in?” they are asking, “What do we actually need to deliver? And by when?”
This is driving increased use of:
- Niche procurement specialists engaged against a defined scope of work
- Fractional senior practitioners providing oversight, leadership or challenge without full-time commitment
- Outcome-led consulting-style engagements delivered by hands-on practitioners rather than traditional consultancies
Examples we’re seeing include:
- Category specialists leading time-bound sourcing or renegotiation programmes
- Transformation practitioners supporting P2P or operating model change
- Supplier risk or ESG experts addressing specific regulatory or governance gaps
These individuals are plugged in quickly, deliver against agreed milestones, and exit once the work is done, leaving behind stronger capability rather than ongoing dependency.
IR35, Cost Control and Smarter Engagement Models
IR35 has sharpened focus on how contingent talent is engaged, and for many organisations it has exposed inefficiencies in legacy approaches.
Long-term, inside-IR35 contingent roles often result in:
- Higher day rates to offset tax exposure
- Reduced flexibility around working models
- Individuals effectively operating as employees, but without the long-term value equation stacking up
By contrast, well-structured specialist and consulting engagements:
- Can usually be legitimately and compliantly delivered outside IR35
- Allow organisations to pay only for the days, phases or outcomes required
- Avoid unnecessary headcount inflation
- Reduce reliance on expensive, long-running contingent resource
This is about engaging talent in a way that is commercially sensible, compliant and outcome-focused.
The Risk of Standing Still
Not every organisation has made this shift yet, but that is precisely where the risk lies.
Those still relying heavily on traditional contingent models may find themselves:
- Paying more for less specialist capability
- Struggling to attract top-tier talent who prefer outcome-based engagements
- Carrying contingent cost for longer than intended
- Falling behind peers who are delivering faster, leaner transformation
In a market where procurement capability is a genuine differentiator, workforce strategy should no longer be a back-office decision. Instead, it should be a commercially motivated and competitive one.
A Strategic Opportunity for Procurement Leaders
This isn’t about replacing permanent teams or removing continuity. It’s about designing a blended workforce that combines:
- Permanent leadership and core capability
- Interim and fractional support during transition
- Plug-in specialists for defined, high-impact, initiatives
The organisations that get this right are building procurement functions that are more agile, more resilient and better aligned to the realities of modern delivery.
From what we’re seeing across our client base, this shift is already underway but it’s far from universal. And that gap is only likely to widen.
If you’re reviewing your contingent strategy, building transformation capability, or exploring how to deploy interim, fractional or consultancy solutions more effectively, I’d welcome a conversation and am pleased to offer advice without obligation- just send me an email to jack@procurementheads.com, or call on 01962 869838.
See more about how we can support your organisation with interim hiring.
