External Workforce Management @apsolut

What is Workforce Management?

In workforce management, a distinction is made between internal and external workforce. Internal workforce are internal employees who are directly employed by a company. External workforce are employees who are not paid through the company payroll.

This can be the case, for example, through employee leasing, outsourcing solutions or service agreements. Nevertheless, these employees require work materials, such as laptops and cell phones, or access to internal systems.

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 Workforce Management

The goal of workforce management is to get an overview of all internal and external employees. This is important for your organisation due to several factors:

  • Government inquiries (How does this person work for you? What is the person's contract? Can we rule out bogus self-employment?)
  • Role comparisons for future investments (How and from where do I outsource this task?)
  • Information security (Who has access to my system? When do permissions need to be granted and removed?)
  • Tracking (Has this person worked for me before?)
  • Documentation (Proof of social security contributions)
  • Payroll (How do we pay? How do we track this?)

The goal of workforce management is the traceability of relevant data of all employees. This in turn leads to faster and more efficient decision-making. In addition, costs are saved because quotations can be compared more easily.

Areas of (external) workforce management

External Workforce Management can be divided into different areas.

In the graphic above, you can see the division as SAP does it. There are four major supercategories

  1. Contingent Workforce Management
  2. Service Procurement
  3. Worker Profile Management
  4. Assignment Management

Depending on the organisation, certain categories and areas will have a higher or lower priority.

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.

  • Assessment of demand
  • Job posting or RFP/RFQ with required expertise
  • Issue RFP to suppliers
    • People/expertise: review CVs and finalize decision
    • Services: Evaluate offers
  • Establish contracts

And yet, this process comes with many challenges.

You know you need additional expertise in an area. You send emails with the details to service providers who can provide 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 have to 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, if you don't use a tool where you can track the status at any time.

At what point does a workforce management tool make sense?

A workforce management tool helps you to

  • make decisions
  • prepare data
  • make it comparable
  • view histories
  • work more efficiently
  • store data in a GDPR-compliant manner.

There are different approaches. Often, a workforce management tool makes sense for companies that have more than 100 external employees or have external workforce management costs of more than €10 million per year. But also in case of high legal requirements, a tool of this kind can be useful.

What information is stored in a workforce management tool?

In a workforce management system, not only the information of freelancers and external employees is recorded, but also information on service providers and agencies.

This means that stakeholders from various departments can access this information at any time and know which agencies are best to contact, since they meet all the requirements and have already provided professional experts in the past.

How an external workforce project works in practice

The stakeholders of such a project usually come from the Procurement, Finance, HR and IT departments. We also recommend to involve at least two key stakeholders from the department that will later primarily work with the system in the project, so that they can help shape processes in the initial phase.

In practice, workforce management projects are often first introduced in one local area (e.g. a country) to establish and optimize processes, before the tool is rolled out on a large scale. There are also companies that roll out their projects in a specific department first. Which method makes most sense and is most effective must be decided individually for each company.

What is certain, however, is that we do not recommend rolling out a workforce management tool directly across the entire company (big-bang), but rather implementing it first within a specific framework.

Trends in workforce management

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

Through this link, you can answer questions such as:

  • What would I save if I moved my department from Southampton to Manchester 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?

We work primarily with SAP Fieldglass when it comes to workforce management.

If you are interested in diving deeper into the topic, you are welcome to look at other resources.

Our workforce management expert: Erika Thier LinkedIn profile

Latest news on workforce management: apsolut Group LinkedIn profile

Ihr persönlicher apsolut-Ansprechpartner

Your personal apsolut contact

Erika Thier
Erika Thier
Partner External Workforce Management

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