The number of workers who are “contingent is growing rapidly. Brian Hoffmeyer from IQ Navigator, a procure to pay solution, spoke today at IBM’s Empower event on this trend, and the implications for procurement. I had the opportunity to sit in on this presentation and get some takeaways…
Several factors are driving the move towards contingent labor. Contingent labor spans everything from temporary warehouse workers, consultant, and project workers. Baby boomers are retiring. For a variety of reasons, they want to stay connected and want to continue working. Many retirees want to have a “hobby” – and still stay connected with their work! Millenials are a huge part of the workforce – 30% – and they want to move to expand their skill set, maintain a strong work-life balance – and research shows that they mov around a lot, and on average work only for 16 months or so at a location. The third factor is there is a shortage of college-educated workers. There will be 30-40m shortage of workers – and 2/3 of companies believe this will impact their bottom line.
Companies themselves are also looking for flexibility and agility that the flexible workforce gives them. This allows them to deal with surges in demand, especially in retail and other industries where a temporary workforce is needed.
There is demand for contingent workers on both sides of the equation – supply and demand. But 60% of the workforce is not well managed and unaccounted for in financial planning, budgeting and forecasting. Companies that Brian talks to can’t answer basic questions on how many people, who is accessing their systems, and can’t answer strategic questions on whether I’m paying the right amount for a project manager. How are our performers performing? There are data breaches, contract workers who set fire at airports, and misclassified workers resulting in fines. The worse example was the NSA hiring Snowden despite his resume discrepancies, and some clear red flags on his resume. He was a contractor, and the NSA didn’t follow contract procedures.
IQN Compass is an approach to vendor management system that involves a SAAS solution to integrate with corporate systems that is easy to implement and operate. It helps to manage the procure to pay process for contingent labor – and helps to manage workflows. This creates a consolidated invoice based on their assignment – and the off-boarding system occurs so they can no longer badge into building – and reporting and analytics are used to monitor and manage workers.
Brian mentioned several case studies. A leading multinational banks wants to be able to have greater control over non-employee workforce. They had no visibility into billing rates, no hiring manager access, no third-party invoicing, and no visibility into managed services resources. They were able to reduce back-office headcount and saved over 1000 person hours through process automation, and show billing accuracy,
Contingent labor management will continue to be an issue that will impact the procurement landscape going forward.