“Nearly 38% of the global workforce can now be considered “non-employee”, which includes contingent workers, freelancers, gig workers and temporary staff – an increase of 30% over a five-year period.” – Mehmood Khan, Chief Operating Officer at SAP Africa

The shift in workforce demographics to a higher percentage of contingent workers has demanded that the HR function take a more proactive approach to managing and engaging the external workforce. Integrated  Core HCM and external workforce management technology can impact and support an external workforce strategy for the HR function.

Sharing Knowledge Impacts the Bottom Line

According to a recent study, Fortune 500 companies lose around $31.5 billion per year by failing to share knowledge. With that in mind, employers have been seeking to find ways of ensuring their staff communicate effectively and efficiently, with both peers and management. This has led to a surge in investment in the internal communications market.

By engaging the external workforce with these knowledge sharing technologies, businesses will mitigate the risk of losing proprietary information when these external workers leave the business.  In line with the second annual Future Workforce Report, we recognize many of these externals will be working remotely. That would suggest there is an ever-sharper focus on ensuring user adoption from a technology standpoint. There are many tools for collaboration available, including SAP Jam.

Related: How SAP Jam Facilitates HR Transformation

Workforce Planning in a Skills-Based Economy

Future of Work research would indicate we are operating in a skills-based economy. Furthermore, the motivation for companies needs to be aimed at leveraging solutions that will allow the capture of skills and competencies of each external worker. This powerful data will feed into workforce analytics that will allow companies to make well informed decisions on staffing in short term potentially for upcoming project or longer term it could trigger a recruitment campaign or a shift in learning focus.

For example, if a technology company notices its artificial intelligence (AI) function is staffed primarily with externals, HR leaders may commit to a recruitment drive to reduce that dependency and invest cross training in the AI area for current staff.

The external workers in question may also be candidates to fill those internal openings.  With better visibility into the total workforce, an organization now can determine how best to fill an opening, potentially leveraging internal bench capacity, internal talent pools and external supplier pools to find the best fit. Successful organizations look for the best talent acquisition path with less focus on the type of employee, driven by visibility into all potential candidates.

End to End External Worker Technology solutions

Traditionally, organizations have focused investment and resources primarily on the candidate to employee experience to achieve high levels of employee engagement. The same possibilities exist in the contingent workforce space with a surge in tools like SAP Fieldglass.

Contingent workforce tools cover key areas such as recruitment, worker onboarding, offboarding, worker timesheets, headcount tracking, employee evaluation and invoice. The seamless onboarding of this segment of workers will drive higher levels of engagement and the “one stop shop” that will decrease costs of integration by leveraging IT investments into back office integrations.

Holistically with certain applications, organizations can control both internal and external workers on connected platforms, example being SAP Fieldglass for external workforce with SAP SuccessFactors as primary platform for employee related processes and data.

Defining Responsibility for Managing External Labor

Historically, there has been a seismic struggle to confirm ownership of the external workforce. Is it legal, HR, procurement, or accounts payable? Technology implementations require conclusive workflow participants, so it tends to push companies to have these difficult conversations by means of delivery workshops.

Who will initiate a requisition for a contingent worker? Who is responsible for securing the required equipment for the new contractor? The automation of these processes is only feasible if the stakeholders are agreed upon.

Ensuring Compliance

The legal and compliance regulations for this group of workers can be vast and complicated depending on local labor legislation. The most comprehensive vendors will possess built-in compliance to ensure stringent checks are conducted and there is a smooth audit trail associated with the process. Manual onboarding processes for externals will result in duplication of data and a high risk that the company is not on the right side of regulatory and compliance standards.

HR Leadership is Key

These new advanced, multi-faceted vendor management systems provide businesses with the ideal opportunity to engage and manage the external workforce.  They have been designed to cater for the nuances of disparate local process, knowledge sharing and compliance ramifications. I am of the opinion that HR leadership must be a central cog in deploying this technology to the wider business.

For more on the topic of external labor, check out our webcast “SAP Fieldglass and the Future of Work.”