The C-suite discussion of the contingent workforce may save an organization millions of dollars, provide it a competitive advantage in talent acquisition, play a vital part in D&I activities, assure effective risk mitigation, and keep the enterprise agile.
FREMONT, CA: According to research by Intuit, 80 percent of large U.S. firms intend to grow the usage of a flexible workforce in the future, with contingent workers comprising over 40 percent of the entire workforce. In addition, according to the "State of Contingent Workforce Management" report from research firm Ardent Partners, 62 percent of businesses view contingent labor as a crucial component of their workforce. Numerous companies recognized they could transition from full-time in-office employees to a hybrid model with employee and non-employee remote workers. The pandemic accelerated this trend.
Including the "full range" of contingent labor, expenditures are frequently the second- or third-largest category of indirect enterprise expenditures for several organizations.
Despite its magnitude, contingent labor has frequently been linked to "non-core" company operations. However, this mindset is shifting among numerous industry leaders. The reality is that this workforce is increasingly comprised of highly trained people who are indispensable in the firms' war for talent, which costs billions of dollars.
As a result, CHROs, CFOs, CPOs, and CIOs play a greater role in the decision not only to outsource the non-employee management function but also to deploy a technological ecosystem to leverage machine-based learning, data, and intelligence to propel their businesses forward as part of their overall workforce and human capital strategies.
Financial Impact: The "Workforce Solutions Buyer Survey—2020 Americas Results" by Staffing Industry Analysts reveals that 84 percent of firms have saved money with managed services programs (MSPs), and 76 percent have saved money with vendor management systems (VMSs). This influence on the bottom line will be necessary to stakeholders for programs involving tens or hundreds of millions of dollars in contingent workforce expenditures.
Talent Acquisition: According to a recent survey, the top internal stressor for C-suite executives is hiring and keeping outstanding people. Since highly skilled non-employee labor is a crucial source of talent within the business (including full-time conversions), its inclusion in the highest levels of workforce planning is essential.
On organization-critical projects, non-employee labor can be utilized to give organizational flexibility, which is crucial in uncertain times. Additionally, contingent labor influences diverse and inclusive (D&I) projects and enables firms to implement innovative talent acquisition techniques. Using low-risk contingent labor, for instance, firms can "pilot" remote work in new or more diverse markets, creating new opportunities to hire more black, indigenous, and people of color (BIPOC) applicants, working parents, and disabled candidates, etc.
Additionally, contingent workers directly impact an employer's brand by revealing how the labor market perceives a company—for instance, by rating their experiences on Glassdoor, etc.
Spend Centralization: In the previous year, businesses spent more than $500 billion on services procurement. Despite this substantial expenditure, many firms are either not capturing it or attempting to manage it with inadequate methods.
This investment is frequently kept distinct from typical "staffing and direct sourcing" engagements for various reasons, resulting in inefficient processes, unpleasant user experiences, higher compliance risk, less talent, and millions of dollars in increased spending.
This group of labor services can provide the most workforce value-driving opportunities through cost reductions and insight into work accomplished and suppliers paid. Since this spend is often safeguarded at a high level, driving this change typically needs a conversation at the executive level.