Today, the use of external resources represents 44% of the total workforce of companies and will represent half of the workforce by 2020.
This external workforce contributes to the activity and the well-being of the business, but there is no HR data on it since it is not generally integrated into your HRIS.
How to have a good visibility on these “external resources”? Who are they? What are their missions? Where are they located? Do they have some security accesses within the company? How much do they cost to the company? What are the risks for the company to hire these external resources?
What is an external resource?
An external resource (or External Workforce) is people who work for a client company, without being considered as a permanent employee of this company.
There are 2 types of external resource:
- Contingent workers: freelancers, consultants, temporary or seasonal workers, interim…they are non-employed people, but they are supervised by the customer company for a mission.
- Outsourced staff in services purchasing: the company allocate a scope or a project to a service provider. Workers on the project are therefore not managed and supervised by the client company, but by an external entity (the service provider).
The state of the external resource
According to the study called External Workforce Insights 2018 by SAP Fieldglass, 69% of companies agreed on the fact that using external resources allows them to effectively manage:
– The project demand,
– The seasonal demand,
– The size of their workforce.
Today, 44% of the budget allocated to the management of the payroll is spent on external resources. In addition, 40% of companies use external workers to fill the skills gap of their permanent employees.
Despite these promising numbers, the use of external resources generally causes some issues for companies:
- Limited visibility on spending,
- Unoptimized demand management,
- Errors in payment of invoices and payroll payments,
- Bad management of the activities of external resources,
- Rogue Spending: Expenditure with the external provider outside the pre-negotiated contracts,
- A lack of data.
This last point is crucial to know precisely the scope of activities of your external resources.
The data you need to know about your external resources
In order to manage these external staff as efficiently as possible, it is essential for you to answer the 5 following questions:
Who’s working for you?
As these external workers are not considered as employees of the company, they do not appear in your HR data or in your HR information system (HRIS). However, you need to know which person is currently working for your company.
What they’re doing?
After referencing the external people working for your company, it is indeed essential to know what they do, what project they work on, in which department, with whom…
Where they’re located?
Now, you have to know in which city or in which country these external resources are currently working. You must be able to locate each of your external collaborators at any time.
What facilities they’re accessing?
Do your external employees use a computer or a phone belonging to your company? Do they have a private access to files, applications or software? Having access to this information will allow you, at the end of each mission, to collect back everything that belongs to your company and reduce security risks by removing access to these people.
How much you’re paying them?
Finally, and this may be the most important piece of information for a business, how much do your external resources cost? Knowing this data allows you to be transparent in terms of budget, to know exactly where your expenses are going and to be able to optimize and manage your budget accordingly.
All the data that responds to these questions can be collected, managed and stored through an HRIS adapted to external resources management.
What solution for a complete management of external resources?
SAP Fieldglass is a cloud-based HRIS solution that enables organizations to engage, host and manage external workforce while respecting corporate policies and rules.
The SAP Fieldglass platform offers a very wide flexibility of configuration to suit the needs of any business. This tool is equipped with:
- Real-time management: These live analysis tools help managers and suppliers to make the best decisions and better manage the activity of external resources. Managing this information in real time can optimize the company’s results.
- Online collaboration tools: Instant messaging to encourage collaboration between employees, managers, external workers and suppliers to allow everyone to work in a unique environment.
- Tasks automation system: It is possible to automate the payroll system, travel & professional expenses or overtime.
In addition, SAP Fieldglass, which is fully compliant with laws, allows the optimization of commercial agreements while reducing the costs of managing external resources.
Read also: Total Workforce Management during COVID-19 pandemic: Manage your externals with the same rigor and care as your employees!
Listen also: Intelligent and Strategic Procurement – HR an often forgotten procurement category (podcast)