External Workforce Management @apsolut

What is Workforce Management?

Workforce management is the process and systems used to control what activities workers do, when they do the activity, what outcomes are expected and what performance they deliver. It also includes how workers are paid and by whom. It also includes how workers are paid and by who.

In workforce management, a distinction is made between internal and external workforces. Internal Workforce staff are permanent employees on the payroll of the organisation. External Workforce are non-permanent employees who are not included on the payroll of the organisation. It may also be used to describe workers with an explicitly defined or limited duration of employment.

Some of the use cases for external workforce deployment are employee leasing, outsourcing solutions, interim management or service contracts. Whether they are internal or external workers, they need work equipment such as laptops and mobile phones or access to internal systems and company sites, as well as training. They may need to reimburse expenses as part of their payments.

[Workforce management is] used to describe any person who works in or for a business but who is not employed by that business or on their payroll. It may also be used to describe workers with an explicitly defined or limited tenure.

(Staffing Industry Analysts)

Benefits of Global External Workforce Management

The goal of external workforce management is efficient management of all external resources. This goal pays off for the success of your organisation because:

You increase profitability both by saving time thanks to efficient processes and by managing business expenses, e.g. salaries and expenses.

You can quickly flex external staffing levels to respond to changing business needs and growth opportunities

You avoid risks through regulatory-compliant processes

You gain information and site security through managed access to all data and company sites (Who has access to my system or site? When do permissions need to be granted and removed?)

You can meet government reporting requirements. (How does this person work for you? What is the person's contract? Can we rule out bogus self-employment?)

You can compare and evaluate roles for future investments. (How and where can I outsource this task)

You can track external employees. (Has this person ever worked for me before?)

You can create documentation, e.g. to prove social security contributions and the right to work.

You can do payroll. (How do we pay? How do we track this? Are there taxes to pay? Are there fees and expenses to pay?)

Areas of (external) workforce management

The above diagram describes the four key divisions SAP uses to manages separate data and process flows for external workforces. These four key divisions are:

Contingent Workforce Management
Service Procurement
Worker Profile Management
Assignment Management.

The priority or importance of these four areas will depend on your organisational needs.

External Workforce Management Process

42% of workforce spending is on the external workforce. Because the external workforce can help restart and sustain momentum.

(Services Procurement Insights 2019: The Big Reveal)

External workforce management processes and procedures are mostly the same in every organisation.

Needs assessment
Establish job posting or RFP/RFQ with needed expertise
Issue RFP to suppliers
- People/expertise: view resumes and finalize decision
- Services: Evaluate offers Establish contracts

And yet, this process brings many challenges. You know you need additional expertise in an area. You send emails with the details to service providers who can offer you with experts in that area.

Over the next week, you get sporadic emails from different providers sending you different documents. You need to compare all of these. Some documents are PDFs, others Power Points, sometimes Excel. With some you must follow up, with others you still have questions...

And after 4 weeks you have already forgotten which suppliers have answered you at all. Does this sound familiar? External Workforce Management is often a time-consuming process that is difficult to track unless you use a tool that allows you to see the status at any time.

At what point does a workforce management tool make sense?

A workforce management tool helps you:

make decisions
prepare data
make data comparable
view histories
work more efficiently
store data in a DSGVO-compliant manner

There are different approaches. Often a workforce management tool makes sense for companies that employ more than 100 external staff or whose external workforce management costs exceed 10 million euros per year. A tool in this area can also be useful earlier in the case of high legal requirements.

What content is stored in a workforce management tool and why?

A Workforce Management tool contains at least the following data content:

Company organisational and user access data
Supplier data, including supplier address, contact information, category expertise, tax status, payments made, and workers hired
Job related data including pay rates
Employee data, including CV information, work locations, agreed pay rates and working conditions hours worked, and payments made
For service contracts, deliverables and milestones are tracked as well

Collecting and organising this content enables users across organisations to access the content at any time according to their role and receive standard information on job vacancies or job descriptions, standard rates or benchmark rates. Pre-setting job posting information and identifying preferred suppliers with standard rates allows the user to focus on entering key information about the role, such as required qualifications and experience. It automates the distribution and management of job postings to the right suppliers.

How does an external workforce project work in practice?

In practice, workforce management projects are often first introduced in one area (e.g., one country) to establish and optimise processes before the system is rolled out to the remaining part of the organisations.

Which scenario makes the most sense and is most effective must be determined individually for each organisation. Senior project stakeholder can come from any business area, but usually from procurement, human resources, IT and finance.

Trends in workforce management

More and more organisations are linking their workforce management data with their HR systems in order to get an overview of requirements. This link is also known as Total Workforce Management.

You can answer questions like these via this link:

What would I save if I moved my department from London to Liverpool or achieved margin transparency?
Where do I have the most talent for an area?
How do wages develop internally and externally?
How many internal vs. external employees do I have in an area?

Due to its industry leading and comprehensive workforce management solutions we primarily work with SAP Fieldglass.

To discuss the topic further and see how we can help your organisation, please visit our LinkedIn page or contact our expert team.

Our workforce management expert: Erika Thier LinkedIn profile

Latest news on workforce management: apsolut Group LinkedIn profile