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Insights into non-payroll workers | SAP Fieldglass

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How much do you know about your non-payroll workers?

Only 31% of executives are highly informed about the quality of work done by their non-payroll workers. That is just one finding from SAP Fieldglass’ latest global research study with Oxford Economics.

To get work done, organizations increasingly turn to non-payroll workers such as independent contractors, freelancers and temporary staff. Non-payroll workers account for a major share of total workforce spend. Yet many organizations under-manage them, preventing them from reaching their full potential, as well as putting their organizations at risk.

View the SlideShare to discover four key actions organizations can take to unlock more value from their non-payroll workers and mitigate risk. The SlideShare also looks at Pacesetters – organizations that excel in managing non-payroll workers – and shows how their strong management capabilities pay off in superior business results.

About the research
SAP Fieldglass collaborated with Oxford Economics to survey 1,050 senior executives in 24 industries across 21 countries about their use and management of the external workforce. One-third of respondents are C-suite leaders, including Chief Procurement Officers and Chief HR Officers. From a qualitative perspective, Oxford Economics also conducted in-depth interviews with multiple executives to capture their insights and reactions to the survey findings.

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Insights into non-payroll workers | SAP Fieldglass

  1. 1. INTERNAL Insights into non-payroll workers Compelling findings from SAP Fieldglass’ latest research with Oxford Economics Research in collaboration with
  2. 2. © 2019 SAP SE or an SAP affiliate company. All rights reserved. The drive to retain market share and break new ground in the digital economy has stoked companies’ appetite for talent and new capabilities. © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  3. 3. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Yet, organizations increasingly find that the skills they need are in short supply. 58% 56% 50% 56% 57% 61% 29% 31% 33% 38% 42% 48% Cybersecurity New product development Data-driven decision-making User experience Design thinking Newer technologies (AI, machine learning, blockchain, automation, cloud, Internet of Things) To what extent does your organization have the skills it needs in the following areas now and expected in three years? “Enough skills" responses Today In 3 years Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  4. 4. © 2019 SAP SE or an SAP affiliate company. All rights reserved. How are organizations getting access to these skills? They are increasingly turning to the external workforce to get work done. Meet the modern workforce Internal workforce External workforce Employees Workers who are on the company’s payroll, typically receiving traditional employment benefits. Non-payroll workers Also referred to as contingent labor, these individuals are engaged by an organization to do work on its behalf, but not as employees. They can be contracted via staffing agencies, through freelancer marketplaces, or directly by the company. Examples: Independent contractors, freelancers and temporary labor. Services providers Companies contracted to get work done, typically on a project basis, via a Statement of Work (SOW). They provide services delivered by people. Examples: Consultancies, IT outsourcers, marketing agencies, law firms, facilities management companies, call-center operators and accounting firms.
  5. 5. © 2019 SAP SE or an SAP affiliate company. All rights reserved. How important is the external workforce in meeting the following business goals? “Important” and “Extremely important” responses The external workforce is critical to organizations’ success. 56% 61% 61% 63% 66% 67% 74% Improving the customer experience/client satisfaction Managing costs Increasing organization agility Reducing risk Increasing speed to market Developing or improving products and services Operating at full capacity/meeting market demands Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  6. 6. © 2019 SAP SE or an SAP affiliate company. All rights reserved. The external workforce is essential for organizations to thrive in the digital age. of executives say the external workforce helps them compete in a digital world say it is important or extremely important in meeting business needs for specialized new IT and digital skills What’s more, the external workforce accounts for 42% of total workforce spend. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  7. 7. © 2019 SAP SE or an SAP affiliate company. All rights reserved.© 2019 SAP SE or an SAP affiliate company. All rights reserved. Despite the immense size and importance of the external workforce, few executives have fully incorporated it into their talent strategy. 17% 29% 33% Our organization has a talent strategy that encompasses employees and the external workforce Within our HR department, we look at our workforce strategically and holistically, including employees and the external workforce When starting new projects, we consider all types of labor, including employees and the external workforce “Strongly agree” responses Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  8. 8. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Why are non-payroll workers important? They account for a significant proportion of external workforce spend, and they fulfill important roles across the enterprise – in IT, finance, marketing, legal, field services, manufacturing and more. Narrowing the lens to focus on non-payroll workers: © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  9. 9. © 2019 SAP SE or an SAP affiliate company. All rights reserved. In many organizations, non-payroll workers are under-managed, which means there is untapped value as well as potential risk. How much do you know about your non-payroll workers? © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  10. 10. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Illuminate your invisible workforce See your contribution in a new light Rise above the silos Manage with rigor Four actions to gain more value from non-payroll workers
  11. 11. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Illuminate your invisible workforce
  12. 12. © 2019 SAP SE or an SAP affiliate company. All rights reserved. 33% 34% 38% 39% 39% 47% Who is doing the work Where they are located Contract terms Access to systems and confidential company information Compliance with required licenses and certifications Responsibilities (what they are doing) Many organizations lack visibility into non-payroll workers. How informed are you personally about the following details of your non-payroll workers? "Highly informed" responses Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  13. 13. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Quality of work and individual performance are surprising blind spots. of executives are highly informed about the quality of work of their non- payroll workers are highly informed about individual performance of their non-payroll workers 31% 16% Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  14. 14. © 2019 SAP SE or an SAP affiliate company. All rights reserved. With such limited insight into details about non-payroll workers including work quality, it’s difficult for executives to manage effectively and have confidence in value delivered. © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  15. 15. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Manage with rigor
  16. 16. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Many companies do not apply sufficient rigor in managing non-payroll workers. Security breaches, compliance issues and maverick spend are worryingly widespread. How often does your organization experience the following with regard to its non-payroll workers? “Sometimes,” “Frequently” and “Nearly every engagement” responses 37% 37% 40% 41% 47% Overcharges and duplicate payments Compliance issues (e.g., certifications, workers exceeding tenure, etc.) Digital security breaches (e.g., confidential data or information) Unauthorized spend without approval of Procurement Rates that deviate from an agreed-to rate card or master services agreement Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  17. 17. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Management rigor drops off through the life of the engagement. How well does your organization manage non-payroll workers in the following areas? “Well” and “Very well” responses 78% 78% 67% 67% 53% 51% Workforce planning Measuring performance against stated goals Sourcing Onboarding Offboarding (cutting off system and facility access) Re- engagement given positive experience Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  18. 18. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Lack of effective management may result in unsatisfactory outcomes. © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  19. 19. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Rise above the silos
  20. 20. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Collaboration is beneficial to achieving optimal business outcomes. How effective is cross-functional collaboration (between Procurement, HR, IT and lines of business) with regard to your non-payroll workers? “Effective” and “Highly effective” responses 79% 67% 67% 65% 58% Workforce planning Spend management Performance management Governance Sourcing Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  21. 21. © 2019 SAP SE or an SAP affiliate company. All rights reserved. We want to foster an even greater collaborative relationship between HR and Procurement that acts as a catalyst to help the business get work done. Cynthia Moore Sourcing Lead Consultant & Procurement Solutions, Allstate Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  22. 22. © 2019 SAP SE or an SAP affiliate company. All rights reserved. See your contribution in a new light
  23. 23. © 2019 SAP SE or an SAP affiliate company. All rights reserved. There is room for improvement in terms of non- payroll workers meeting goals and objectives. Approximately what percentage of non-payroll workers at your organization meet their stated goals and objectives? 7% 11% 18% 22% 42% Less than 60% 61-70% 71-80% 81-90% 91-100% % of non-payroll workers %ofrespondents Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  24. 24. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Everyone who works with non-payroll workers plays a role in helping them meet their goals and objectives. Given the significant footprint of non-payroll workers in the enterprise, there are ample opportunities to contribute and add value. © 2019 SAP SE or an SAP affiliate company. All rights reserved.
  25. 25. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Learn from the Pacesetters who are leading the pack Around 11% of organizations that responded to our survey outshine the rest. These “Pacesetters” have much more rigorous approaches to managing and extracting value from their external workforce – including non-payroll workers. Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  26. 26. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Pacesetters stand out in three important ways: Visibility of the external workforce Effective management of the external workforce Competitiveness in a digital world Let’s take a look at how Pacesetters compare to others… Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  27. 27. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Pacesetters have superior visibility. How informed are you personally about the following details of your non-payroll workers? "Highly informed" responses Pacesetters Others 40% 32% 36% 27% 31% 34% 44% 32% 41% 56% 59% 61% 66% 67% Contract terms Responsibilities (what they are doing) Access to systems and confidential company information Compliance with required licenses and certifications Who is doing the work Quality of work Access to facilities Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  28. 28. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Pacesetters manage non-payroll workers with more rigor and realize dramatically different results, except in the case of digital security breaches. How often does your organization experience the following with regard to its non-payroll workers? “Sometimes,” “Frequently,” and “Nearly every engagement” responses Pacesetters Others 42% 45% 46% 41% 48% 1% 4% 6% 7% 34% Overcharges and duplicate payments Unauthorized spend without approval of Procurement Digital security breaches (e.g., confidential data or information) Compliance issues (e.g., certifications, workers exceeding tenure) Rates that deviate from an agreed-to rate card or master services agreement Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  29. 29. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Pacesetters collaborate better across functions on various aspects of managing non-payroll workers. How effective is cross- functional collaboration (between Procurement, HR, IT and lines of business) with regard to your non-payroll workers? “Effective” and “Highly effective” responses Pacesetters Others 96% 88% 83% 76% 76%77% 54% 63% 66% 66% Workforce planning Sourcing Governance Spend management Performance management Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  30. 30. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Pacesetters report substantially better performance regarding their non-payroll workers. Pacesetters Others 1% 3% 8% 88% 20% 19% 24% 37% 70% or less 71-80% 81-90% 90-100% Approximately what percentage of non- payroll workers at your organization meet their stated goals and objectives? % of non-payroll workers %ofrespondents Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  31. 31. © 2019 SAP SE or an SAP affiliate company. All rights reserved. What can we learn from the Pacesetters? Management rigor pays off. Pacesetters cite fewer management challenges and better performance of their non-payroll workers. Companies must view and manage non-payroll workers as an extension of their workforce. Greater visibility will help executives realize better business outcomes and mitigate risk. Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  32. 32. © 2019 SAP SE or an SAP affiliate company. All rights reserved.© 2019 SAP SE or an SAP affiliate company. All rights reserved. Here’s how to capture more value from your non-payroll workers: . Gain visibility of your non-payroll workers to drive better outcomes and mitigate risk. Manage your non-payroll workers with the same rigor as your employees. Improve cross-functional collaboration between Procurement, HR, IT and the lines of business in managing non-payroll workers. Ensure your leadership has visibility into the scope, impact and spend on non-payroll workers. Get the support you need to manage effectively: purpose-built technology, executive sponsorship and strong governance. Services Procurement Insights 2019: The Big Reveal Unlock more value from your invisible workforce
  33. 33. © 2019 SAP SE or an SAP affiliate company. All rights reserved. Another huge opportunity … The findings we have shared about non-payroll workers in this presentation are an excerpt from our latest research study, Services Procurement Insights 2019: The Big Reveal, which focuses on how companies can unlock more value from services providers such as strategy firms, marketing agencies and IT outsourcers – an “invisible workforce.” Organizations spend billions on these services every year. Yet because they frequently under-manage services providers, they are unable to maximize value from these engagements. To find out more how to improve business outcomes, boost ROI and mitigate risk, read our report: https://www.fieldglass.com/services-procurement-insights-2019
  34. 34. © 2019 SAP SE or an SAP affiliate company. All rights reserved. SAP Fieldglass collaborated with Oxford Economics to conduct a comprehensive telephone survey with 1,050 senior executives about their use and management of the external workforce. Respondents were from mid-sized to large companies in 24 industries across 21 countries in five regions. Oxford Economics also conducted in-depth qualitative interviews with multiple executives in the field to capture their insights and reactions to the survey findings. About our research

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