Understanding Why The Contingent Workforce Is Now An Executive Imperative

As we speak, the flexibility to rent and retain expertise is prime of thoughts within the C-suite, with greater than three out each 4 executives saying it’s probably the most important issue to attaining development. Because the give attention to expertise has elevated, so has the usage of the contingent workforce, with over 80% of executives reporting growth in leveraging contingent, seasonal, intermittent or guide workers.

Contingent workforce applications assist handle these staff, however the tactical method that’s traditionally been taken isn’t sufficient in immediately’s extremely aggressive, risky market. Optimizing financial savings, velocity and high quality requires top-level involvement and endorsement of a extra strategic perspective.

Listed here are 4 adjustments which might be accelerating this elevation of the contingent workforce to government management discussions:

1) The looming recession has elevated give attention to price financial savings and workforce agility.

Many contingent workforce applications embody tons of of tens of millions of {dollars} – even billions. Organizations can save two to 5 occasions extra with an built-in method to managing the prolonged workforce, however attaining these outcomes with out sacrificing employee high quality requires aggressively pushing innovation and mandating program governance – causes executive-level dialogue is important.

Additional, the necessity to improve enterprise agility to higher climate any potential financial fallouts can also be fueling higher consideration to optimizing workforce flexibility. By making planning and enhancement of a combined workforce a precedence, executives will help jump-start a corporation’s agile workforce transformation so it might probably extra simply scale to handle altering market calls for.

2) The battle for expertise is fiercer than ever.

Based on a latest survey of board administrators, elevated competitors for expertise is the highest pattern impacting corporations. Since contingent labor provides organizations a vital “attempt before you purchase” answer for constructing the expertise pipeline and probably changing high quality staff to full- time workers, together with it in workforce planning on the C-suite degree is crucial.

That is much more true immediately with spend on mission-critical “skilled staffing classes” – IT, healthcare, engineering, finance, and many others. – rising by 70% from 2018 to 2022. Spend on these data staff is greater than double the spend on lower-skill industrial staffing staff, additional eradicating the notion that the contingent workforce revolves round momentary staff enlisted to finish routine duties. More and more, the talents, skills and advantages contingent staff convey are garnering government consideration as leaders strategize on the advantages packages, company cultural experiences and different operational perks that may assist in hiring and retaining these staff.

3) Misclassification of unbiased staff is a rising problem.

Whereas the contingent workforce has at all times offered tax and profit dangers associated to employee misclassification, these challenges have grown with the explosion of distant work, accelerated growth into new geographies, elevated emphasis on range and inclusion, and shifting insurance policies round know-how and knowledge.

In consequence, use of IC compliance companies has considerably elevated, from a three-year common of 54% in 2019 to 70% in 2022 in accordance with SIA. The subject has grabbed the eye of growth-minded executives, with respondents to a PwC survey citing compliance and regulatory danger as the best risk to their firm’s skill to develop.

4) Executives need extra visibility and management.

What may very well be extra related to government management than having a full understanding of their workforce composition by geography, labor sort, and many others.? Near 70% of enterprise leaders need to handle key gaps for higher protection of the whole workforce, however practically 60% of organizations at the moment depart the non-employee workforce unaccounted for.

To deal with this hole, savvy leaders are more and more realizing that their contingent labor applications have to be as data-driven as different areas of the enterprise. Which means empowering the group to faucet into the huge knowledge ocean out there whereas leveraging each cutting-edge know-how (machine studying, predictive analytics, and many others.) and human experience to validate the info and make sure that it’s actionable.

Evolving the Enterprise

Because the workforce panorama evolves, that is now a excessive strategic precedence on the senior government degree for organizations. It not solely impacts CHROs and the human capital technique they’re chargeable for, but additionally CFOs and past because it’s now a prime 4 spend class, shifting earnings per share. And, because the tech layer turns into extra data-related, coupled with knowledge regulation and the danger related to worker knowledge privateness, and many others., it now impacts the CIO.

Finally, growing the sophistication of a contingent workforce administration program can drive tens of tens of millions in price financial savings, however accelerating this development by means of the maturity curve requires government involvement and endorsement. As such, leaders who act now — and strategically — to optimize the versatile workforce might be higher positioned because the labor market continues evolving.

For extra insights on contingent workforce administration and the way your group can stay agile throughout occasions of financial uncertainty, obtain our e-book.