With outsourcing affecting almost every aspect of corporate business these days, what has been the impact on the meetings industry? And, at the same time, where do independent meeting planners and third-party meetings management firms fit into the shifting culture of today’s corporations?
These questions loom large at a time when more planners than ever are choosing to forsake the corporate routine for the rewards and challenges of working as independents.
“Everybody and their dog wants to be an independent planner right now,” says Amanda Joiner, CMP, CMM, Toronto-based event and meeting management instructor at George Brown College and president of Canadian Conference & Events Management. “I just started my class, and of the 50 people in there, over 30 of them want to start their own company, and that is probably understating it.”
At the same time that their ranks are swelling, independent planners are facing increasing competition for corporate clients from large meetings management firms. Complicating the situation further for independents are the stringent accountability requirements that are altering the way corporations meet and conduct business.
The Independent Life
Just as the meetings industry has evolved since its inception, the role of an independent planner keeps changing as well.
Dawn Penfold, CMP, president of The Meeting Candidate Network, a New York-based executive search firm that specializes in permanent and temporary meeting planner placements, says job functions and the number of in-house planners versus independent planners in the corporate sector is directly tied to the economy.
“I can always tell when the economy is taking a dip with the hiring freezes,” she says. “[At that time,] corporations will not replace a planner when they leave, and the next phase is to hire independent contractors or freelancers.
“When the economy gets better, they get to the point where they start hiring people,” she adds. “I saw that from the recession in the early ’90s, but during the second recession, many of the companies laid off people and then never really rehired. They had the same amount of work, but they began outsourcing various aspects of the job.
“I have seen more corporations go the independent route,” she adds. “They bring in one to 15 meeting planners to handle heavy periods and short-term projects. A lot of it is because of economic growth, but companies also don’t have the head count to increase staff.”
As far as an independent planner’s responsibilities, Joiner has found that each corporation has its own set of house rules.
“I see [meeting planners’ job duties] widely diverging,” she says. “Either you are completely responsible for the whole event or [companies] are just outsourcing the pure logistics. It is either completely full-service or just about taking a little design piece.”
Joiner also notes that an increasing number of companies are outsourcing the planning of VIP meetings.
“I see a trend for the higher-end or executive events,” she says. “Even if there is an in-house capability, I see a lot of my clients outsourcing those events because they need a higher level of service with those events. We can give them the personalized service when the in-house planner can’t afford the time to do those.”
Third-Parties
While the nation’s economy ebbs and flows, inevitably affecting almost every industry, Howard Feiertag, CMP, CHA, CHME, instructor in Virginia Tech’s Hospitality & Tourism Management Department, notes that events ranging from national tragedies to corporate corruption scandals have dramatically transformed the meetings industry, helping to speed along the birth of a new entity: the third-party meeting planning company.
Those companies, including major firms such as Experient (formerly Conferon) HelmsBriscoe and ConferenceDirect, are basically defined as organizations that often employ independent meeting planners and contract with corporations to help them manage meetings in a wide spectrum of ways. Many meeting management companies specialize in site selection, while others offer full-service planning.
Because of today’s greater need for expense transparency, largely a result of Sarbanes-Oxley (SOX) stipulations, some corporations are more comfortable hiring large third-party companies rather than independent meeting planners.
“When you talk to corporations, not as many are using independent meeting planners, they are using third-party companies,” says Sharon Marsh, CMP, CMM, vendor relationship manager for the Global Meeting Solutions Department at Cisco Systems in San Jose, Calif. “With SOX and with tightened IRS regulations and the need to better regulate cost management, it is easier to track and monitor the spending. Therefore, the fewer companies you are paying, the easier it is to track the spend.”
Marsh says her company farms the logistics of its meeting planning to a third-party, but maintains its strategic operations in-house. She adds that using third-parties is becoming more and more popular among fiscally conscious corporations.
Ethics Questions
Even with all of their perceived advantages, some in the meetings industry call into question the ethics of third-party meeting planning companies in conducting business for their clients if they are on a commission basis.
The subject doesn’t sit well with Feiertag, who says some of the companies that specialize in site selection have preferred vendor agreements with various hotels, thereby causing them to choose hotels that may not be the best fit for their client’s needs. The site-selection firms earn a percentage of the deal, sometimes from 10 percent to 50 percent, he adds.
“It is a question of ethics,” Feiertag says. “Who does the independent really represent?”
However, not everyone believes that unethical behind-the-scenes scheming is happening to any significant degree.
“Based on conversations I’ve had with hotel executives from a higher level, I kinda don’t believe it,” Marsh says. “The reality of it is, there are ethical individuals in every company and there are unethical individuals in every company. I do believe that there are some business models that I personally don’t like, and if the pricing is not transparent, I don’t want anything to do with them. I would rather pay on a fee basis than on a commission basis. If I am hiring a company to do registration for me, I am going to pay a price for it. Transparent pricing is what we [Cisco] prefer.”
Quality Control
Whether or not corporations decide to use independent meeting planners or third-party meeting management companies, the question that inevitably arises is, How does a corporation maintain the quality of its meetings when the people organizing and managing those meetings are not its employees?
“It is very difficult,” Penfold says. “Corporations expect the same high level and commitment [from an independent] as they do from a permanent employee. But at the same time, they are not willing to sacrifice benefits to this temp. It is very difficult to strike that balance, and many companies are having a difficult time.”
Sheryl Sookman, CMP, principal of The MeetingConnection, a Novato, Calif.-based executive recruiting company specializing in meeting professional placements, says that in order to keep the quality of the meeting on par, corporations are tightening the reins on their independent planners.
“There are companies that are now requiring that an independent planner work in-house so that they are able to have more accessibility to what is going on,” she says. “There are more levels of accountability that the manager of the department has to put in place to make sure that they keep the integrity of the meeting and event in the area that they want it to be.”
Benefit Concerns
For independent meeting planners who serve a variety of corporate clients, including some that require a tremendous time commitment and level of responsibility, problems can arise with regard to appropriate compensation and employee benefits.
“There is the constant dilemma that planners have to shell out their own money for health insurance, life insurance and their own pension plan,” Penfold says. “If you constantly have all of these independent contractors running around, eventually these contractors will be retiring without pension plans.”
The topic took center stage a few years ago when independent contract workers filed a class action lawsuit against technology giant Microsoft for treating them as permanent employees, but failing to pay them benefits.
At the time, the contractors were being paid without benefits, but were expected to perform the same duties as permanent employees. In the end, the employees won and corporations are now not allowed to order their independent contractors to do the same work of salaried employees.
The case forever changed the way corporations view and treat their independent, temporary workers. As a result, independent meeting planners are now more likely to be hired through third-party companies and given responsibilities not shared by in-house employees. In some cases, they may be handling logistics or, if the company has no internal meeting planning department, entire events.
“As a result of the lawsuit, a lot of companies had to reassess how they treat independent contractors.” Sookman says. “It has changed the nature of the relationship between companies and independent planners. A manager, who two years ago found an independent planner and worked with them directly, now has to go through more hoops to work with them now.
“Instead of paying them directly without any taxes taken out, what ends up happening is that a lot of companies now end up putting contractors through a temp agency situation,” she continues. “It presents a cleaner process to it. Contracting is not going to disappear; the nature of how it works is different.”
Industry Trends
Although some companies are demanding that independents work on-site, Penfold observes that independent meeting planners increasingly want to do the opposite.
“More planners are asking to work in a remote situation,” she says. “What independent planners are asking for is the flexibility to work in their home. And I haven’t seen those two forces meet yet. The reason an organization is hiring a temp in the first place is because they are in a crisis mode. If you can’t see them, you don’t know if they are giving 100 percent.
“If a corporation is having a hard time finding a good temp, they may want to be flexible with the office situation,” she adds. “My advice to temps or independent contractors is that they may need to work in an office environment more than what they had planned on.”
Sookman agrees.
“I’m seeing that, oddly enough, it still goes back to individual management style,” she says. “There are a lot of companies that have policies that allow telecommuting, but it is left to the decision-making of the individual manager.”
Join the Party?
If what Joiner says is true, that everyone is vying to become the next great independent meeting planner, industry veterans have a few words of wisdom before eager individuals jump into the fray.
“An independent planner is their own sales and marketing team,” Penfold says. “That is what independent planners need to realize. They have to do a good job, be a member of that team, give 100 percent, so they are brought back for repeat business or brought back to work on a permanent basis by the company.”
Marsh adds that the best way for independent planners to stay in the game long-term may be to work for a third-party meeting planning company.
“I think they have to start going through third-parties to get business,” she says.
Yet, Marsh’s nugget of advice begs the question: With third-party companies multiplying and taking a bigger share of corporate meetings business, are independent planners facing a daunting challenge?
“I think their skills are still needed, but they need to sell themselves differently,” Marsh says. “As an independent planner, you can’t rely on one company.”
