New research from SAP Fieldglass and Oxford Economics shows significant reliance on contingent labour in today’s modern workforce to get work done. Yet, the lack of adequate management rigour prevents organisations from reaping the full value of contingent labour and creates risks in security, compliance and more.
According to the research which has gone into the report: Contingent Workforce Insights 2019: Expertise in Full Force the external workforce, including contingent workers and services providers, is key to helping organisations achieve a broad range of business goals from boosting organisational agility as cited by 63 per cent of respondents, to increasing speed to market (61 per cent). It also acts as a vital source of skills as 62 per cent of executives say their external workforce is important or extremely important in meeting business needs for specialised new IT and digital skills. On average, 42 per cent of total workforce spend is on the external workforce, and more than half of that is on contingent labour.
Wendy Stenger, global lead, External Workforce Programs, Thomson Reuters, explains, “We are on a journey to better manage our external workforce, which is a vital source of the skills we need to compete in the digital era. With SAP Fieldglass, we have clearer visibility as to the basics of who is doing the work, which of our internal systems they can access, and their quality of work. That helps us make better decisions about things like governance and who we re-engage – and ultimately and most importantly, better serve the lines of business in getting work done.”
A global shift in the way work gets done is well underway. Two converging forces are driving this – companies seeking talent with highly specialised skills and individuals who increasingly choose to pursue more flexible options. As Cynthia Moore, sourcing lead consultant & procurement solutions at Allstate, observes: “People want to be engaged the way they want to be engaged, meaning it’s not always going to be the traditional FTE.” Non-payroll talent works across the enterprise – from corporate staff to field services and more. And, many people with industry-specific skills choose contract work such as nurses, offshore oil and gas workers, and insurance claims handlers.
“Contingent workers play critical, high-value roles operating at the heart of the enterprise to deliver value to customers and drive business success,” said Arun Srinivasan, newly appointed general manager at SAP Fieldglass. “Our research confirms this, but it also reveals the significant need to better manage this sizable workforce to maximise value and minimise risk.”
Contingent labour provides much needed skills to enable companies’ success and has become increasingly important across industries and geographies. Yet in spite of their importance, contingent workers are frequently under-managed. For example, as the report indicates, only 47 per cent of executives are highly informed about non-payroll workers’ contract terms, and just 31 per cent are highly informed about their quality of work. With such limited insight into the contingent workforce, it’s difficult for executives to manage it effectively and have confidence in value delivered.
Beyond maximising value, this lack of sufficient management is cause for other concerns including security and compliance issues. For example, 47 per cent of executives report digital security breaches with non-payroll workers sometimes, frequently or nearly every engagement. Forty per cent say the same for compliance issues, and 36 per cent for worker misclassifications.