Freelancers and outsourcing staff represent on average 44% of total labor costs in large companies.
The management of recruitments, contracts and assignments involves purchasing managers, CIOs, operational directors and more rarely HRDs. Moreover, these “externals” do not have access to the HR tools of the company they work for.
How to put in place a powerful management system which gives a vision of all the resources of the company, as internal and external?
What are the Profiles of External Resources?
External staff can take different forms:
- Consultant: Consultants are strategic external partners who put their skills and knowledge at the service of companies.
- Temporary worker: In some sectors, the use of temporary workers is the best way to meet a seasonal demand or respond to a temporary increase of activity.
- Freelance: According to Crème de la Crème, a freelance networking platform, the number of Freelancers in France has grown 110% over the past 10 years, reaching almost one million of freelancers in 2019.
- Service Company: Cleaning, security, customer support are examples of activities that involve external staff within a company.
The development of the use of “external” responds to the demand of a market seeking more availability, flexibility and expertise from its workforce.
Why Use External Staff?
In recent years, the “Gig Economy” embodies a new trendy model: this new collaborative economy where everyone is, in theory, free to work where he wants and when he wants. This refers mainly to collaborative platforms like Uber or Deliveroo which do not employ employees but work with self-employed workers (micro-entrepreneurs). The benefits of these temporary jobs are flexibility and low costs.
For higher value jobs, recruitment processes are becoming longer, with profiles often sought and coveted by many companies. This lack of talent in the market has created a new way of recruiting and working.
There are several reasons that can drive a business to work with external resources:
- To access certain skills unavailable internally: Indeed, some profiles with specific knowledge and skills are sometimes very difficult to hire because they are very desirable. To overpass this problem, some profiles make available their skills as freelance or consultant, for a limited time. This allows the company to access a rare resource, without recruiting them in the long term.
- Strengthen a team on a project: In a very specific project, such as the digitization of a company’s processes, internal resources may be lacking or not be competent or qualified enough. Thus, the company can involve one or more external resources only for the duration of the project. The company hires experts, who focus on the management of a specific project until its completion.
- To cope with a sudden increase of activity: When a company is experiencing a rapid increase in activity, it must be able to quickly find the resources it needs to keep pace with its development. Recruitment processes are often lengthy, so the company needs to find a way to quickly integrate staff into his teams.
These external resources are quickly operational, without the need to be trained and know how to work flexibly.
Therefore, one of the biggest challenges of companies is to manage and control these resources which are not part of their workforce. The current HR solutions are not adapted to the management of this workforce and companies lack visibility on many aspects such as:
- The tasks performed,
- Their profiles and identities,
- The teams, the sites, the countries where they work,
- Their costs,
What Solutions for Managing the External Workforce?
In most ETIs and large groups, an HRIS is already in place for the management of internal employees.
What about external collaborators? Unfortunately, few organizations know that a Vendor Management Systems (VMS) also exists for them. While purchasing departments often have their own tools, VMS offers a wide overview of their activity. These piloting tools gather information that is at the crossroads of finance and operations: team, contract, qualifications, tools access, daily rate, mission duration, etc.
The challenge now is to be able to manage external resources and internal resources in the same way.
SAP Fieldglass, the Flexible VMS Solution that Adapts to Business Needs
SAP Fieldglass is an innovative cloud solution for an efficient search, selection and management of external resources. Fieldglass tracks the external workforce at two levels: at the individual level for the self-employed (the fields to be completed are close to those of an HRIS), and at the level of the enterprise for subcontracting partners (administrative compliance and progress of milestones, in particular). The database is used, on the one hand, daily to follow the work of the contingent workers and, on the other hand, in recruitment contexts to carry out queries and find relevant profiles.
The online collaborative module facilitates exchanges and interactions between employees, managers, external workers and suppliers.
In addition, it offers a process of automating billing, leave & day off management, professional expenses or overtime.
In summary, SAP Fieldglass, integrated by ARAGO Consulting, is a complete and integrated solution for managing all processes related to external workforce management.
Integrate HRIS and VMS: for what benefits?
Time savings, better visibility on the global workforce and projects, more efficient management, compliance; the integration between these two solutions offers many advantages:
- Homogeneous information for internal and external workers: CVs, accreditations, rates, start and end dates, team, manager, availability, invoicing and payments. Integrating VMS with HRIS, such as SAP Fieldglass with SAP SuccessFactors, allows HR and management teams to gain visibility on the talents and their assignments. Moreover, they can better support “externals” throughout their mission.
- Facilitated daily performance: With a single point of entry for managing all internal and external resources and automated processes, the day-to-day tasks of the HR and Purchasing teams are facilitated.
- An overview of reliable and real-time talent: to drive, anticipate and prepare the company for the challenges of tomorrow.
The integration of the HRIS and the VMS follows the strategy of “extended enterprise”, which recruits, accompanies and gathers its internal and external resources with the same requirement. This is what we call “Total Workforce Management”.
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