TOTAL WORKFORCE MANAGEMENT24 March 2015Thomas Otter, VP of Product Management for Employee Central, SuccessFactors5

In the fifth and final webinar of the current series of 20-Minute Master Classes, SuccessFactors’ Thomas Otter highlighted that while for decades, HR has focused on employees, your top talent today might not be on your payroll, and your biggest legal risks may lurk in your contingent workforce. He reflected on why globalisation and changing workforce demographics mean that HR needs a total workforce strategy.

Today’s workers no longer believe in the hierarchical command-and-control structures of the past. Contingent workers are currently the fastest-growing segment of the US job market. In organisations with a just-in-time workforce, such as the extractive industries, over a third of the talent pool is typically comprised of contingent labour.

Change is in the air Full-time

Employees

Contingent Workers

30-50% of total workforce is

comprised of non-employees

Temporary/AgencyWorkers

SOW Consultants

Independent Contractors

CONTINGENT LABOUR SPEND IS GROWING DRAMATICALLY WORLDWIDE:

• $3.3 trillion is spent annually on non-payroll labour – that’s one-third of the total workforce

• 41% increase in contingent workforce spending in the past five years

• Two-thirds of new jobs created this year were temporary positions

With decades of accumulated HR practices behind them, organisations must now look to simplify and standardise processes across the total workforce to increase flexibility. But this can be a challenge when contingent labour has fallen between the cracks of HR and Procurement – and not necessarily managed properly by either.

What does the law say about your relationship with contingent workforce? Contractors are people too @SF_EMEA @vendorprisey #20MMC

It is important to induct Contractors into your company culture as they represent your company as much as employees do! @SF_EMEA #20MMC

Health & Safety Liabilities are the same for Employees and Contractors - HR needs to consider how to manage this @vendorprisey #20MMC

CONTRACTORS ARE HUMAN, TOO!

In the eyes of the law, if an independent contractor is treated like an employee, they are an employee. Lawsuits can have serious financial impact on organisations in terms of benefits and taxation.

Health and safety regulations for employees must also be applied to contractors for whom organisations are liable. For example, longer term health impacts arising from unanticipated workplace exposures may involve companies having to financially compensate site contractors in future.

There are learning management and on-boarding implications for contingent workers too – organisations need to consider their duties and obligations to their total workforce.

Contingent Workforce Management

Back in 2010, research by the Human Capital Institute revealed that 4 out of 10 organisations believe contingent workforce management is a shared responsibility among HR, functional managers and Procurement.

That may be true in software companies and retailers, which regularly or seasonally use contingent and temporary labour, but in organisations across most other industries, there still needs to be a strategic coming-together of HR and Procurement leadership. These functions need to understand the mutual implications of purchasing as a hiring approach.

It’s not just a strategy for managing individual workers, either, but often complex relationships with large contingent labour providers.

Why is it so important? Because organisations that can foster innovation at the intersection of domains – in this case between employees and contingent workers – will be better placed to succeed.

In 5 years, leading organisations will have a strategy to holistically manage their workforce. @vendorprisey in #20MMC

From a mess to a VMSToday, the relationships between hiring managers and contingent labour suppliers are often a tangled web, leading to poor visibility, inefficiency, high costs, and quality and compliance issues.

A vendor management system (VMS) can enable organisations to better manage their non-employee workforces at scale, including temporary staff, independent contractors and services arranged through statements of work. The result? Companies can achieve the total multinational workforce visibility they need to reach their cost, compliance, quality and efficiency goals.

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