The Powerful Workforce That’s Not on Your Payroll

Contingent workers now represent nearly 25 percent of total workforce spend.

Navigating the Skills Shortage

Do you have the talent you need to stay competitive? Connect with your customers in a 24/7 world? Harness new technologies to drive more business value?

To achieve these goals, organizations need to source fresh talent and new capabilities. That’s easier said than done. To put things into perspective, in 2009 there were 6.6 job seekers for every vacancy in the US. By July 2018 that figure had fallen to 0.9, meaning there are now more job openings than unemployed people. The result? It’s increasingly hard for organizations to find the skills they need. 

Our new research found that many organizations are already experiencing significant skills shortfalls. Just 31% of executives say their organization has enough skills in newer technologies (such as AI, automation and robotics). Only 29% have enough skills in cybersecurity.

To source sought-after skills, many organizations are turning to the external workforce, which includes:

  • contingent labor (also known as non-payroll workers), such as independent contractors, freelancers and temporary staff
  • services providers (companies that supply services delivered by people), such as consulting firms and marketing agencies

Our research found that the external workforce helps organizations to achieve a broad range of business goals. Most executives say the external workforce is important or extremely important to operating at full capacity/meeting market demands (74%) and improving the customer experience/client satisfaction (67%).

>>Read more: How much do you know about your invisible workforce?<<

Insights into Contingent Workers

Our study revealed valuable insights into contingent labor. For example, did you know that non-payroll workers account for nearly 25% of total workforce spend? They work across the enterprise – as consultants, in IT, on production lines and so much more. Many of them access sensitive data and internal systems, and some have customer-facing roles.

In spite of this, contingent workers are under-managed at most organizations. Only 47% of executives are highly informed about non-payroll workers’ contract terms, and just 31% are highly informed about their quality of work. With such limited insight into contingent labor, it’s difficult for executives to manage effectively and have confidence in value delivered.

Incidents involving contingent labor are widespread. For example, 47% of executives report digital security breaches with non-payroll workers sometimes, frequently or nearly every engagement. 40% say the same for compliance issues, and 37% for overcharges and duplicate payments. These findings are concerning, and the incidents are likely a symptom of under-management.

The risks of under-management go even further. Organizations that under-manage contingent labor cannot reap the full value of this powerful resource. That can result in unsatisfactory business outcomes.

>>Calling All CPOs: The Risks Associated with Under-Managing Services Providers<<

Our research presents four key actions organizations can take to better manage contingent workers. These actions can help companies to maximize the value of their non-payroll workers, achieve better business outcomes and reduce risk. 

To see more findings about contingent workers and the four key actions, check out the research.

Molly Spatara, Global VP, Brand Experience, SAP Ariba and SAP Fieldglass

Molly Spatara is the Global Vice President of Brand Experience for SAP Ariba and SAP Fieldglass. She has extensive BtoB and BtoC marketing and product development experience across multiple industries as well as a strong track record of designing and accelerating digital-first, data-driven capabilities yielding robust business outcomes. Previously, Molly transformed global marketing and communications for SAP Fieldglass, helped build and scale Accenture Digital, created Accenture’s digital marketing capability across global market units, and led marketing for Accenture Analytics.

Molly inspires her teams and others to develop creative, omni-channel programs that drive measurable awareness, engagement, and preference across audiences, underpinned by compelling thought leadership. A strategist and business operator at heart, Molly has a passion for incubating and scaling new capabilities, developing her teams, leading large-scale change, forging consensus across stakeholders with oftentimes competing priorities, and simplifying complexity. She is curious and believes challenges more often represent untapped opportunities.