The contingent workforce process challenge
Businesses have dramatically increased their use of contingent workers over the past decade as they struggle with rising labor costs and the need for a workforce that can quickly adapt to market conditions. Contingent workers are people who are not on the company payroll but provide services to an organization, such as contractors, consultants, temps and advisers Like in many business also at my customer there was not always an clear visibility on how much external workers are hired and in many cases the onboarding process was not running smoothly without clear compliance rules in place. Non-payroll labor is largest spend category at most companies spent annually on non-payroll labor is one-third of total workforce. We are talking about more than 3.4T € Business worldwide and there is a lot of money to save to make the process more consistent and efficient with a better visibility. At my customer this total spend of external workforce was more than 1 B € so we are talking about a big spend category and this means there is enough opportunity to save money.
Context and challenges at customer
At my customer there was also a need to replace the custom build procurement system which was handling the contingent workforce process. At the start of the project it was not clear who was the overall process owner of this contingent workforce process within the organization. The procurement department thought they were the owner because we are talking about spend and the HR department thought they were the owner because we are talking about skills, people, talent sourcing. The project which started as a replacement of custom build procurement software ended up in one of the biggest business changes which I have been part of especially if you look to the brought mix of stakeholders :
- HR department,
- Procurement department,
- A/P department,
- Security department,
- Authorization department,
- Temp workers,
- Financial and controlling department
The customer decided to use FieldGlass for the CV sourcing/ SOW part and decided to use SRM/SAP for the procurement processbecause this process for indirect procurement was already in place. It was also a Cloud meets on premise integration challenge also from IT point of view. The big challenge was not implementing the Cloud solution FieldGlass including integration with SAP on premise but was more on the business site. Do the stakeholders in the “supply chain” from “Resource request” till invoice payment which contains 12 steps understand the dependencies in this “supply chain”. In the beginning of the project everyone was working in cyclo’s to manage their own part but at the end after a lot of alignment everyone understood the bigger picture.
After implementing the contingent workforce solution this customer had not only more visibility on their external workforce spend and headcount but also had more and better internal alignment within this “Supply chain” process cross all different departments which are involved. The customer has now an enterprise-wide visibility into external workforce headcount and rates by location to make more informed strategic decisions and eliminate current lack of insight into end-to-processes. Also they optimized the external workforce utilization by streamlining & standardizing HR & GPO E2E processes for temporary labor like better onboarding process, data management, link ID and costs. In the Logistic and Industrial business this “supply chain” thinking is already developed from the 90’s but in the world of contingent workforce there is still a lot to improve. After finishing the project the departments HR, Procurement, Security, Finance and control continued to align on Monthly period to improve and better understand the challenges of each department in this “Human supply chain”.
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