Managing contingent workers on a global scale requires special attention. Technology can help.
By Debbie Bolla
As you know, more and more organizations are continuing to leverage contingent workers as part of their overall talent strategy, so much so that contingent talent on a global level is taking off. Recent research from Ardent Partners shows that by the end of 2017, 45 to 50 percent of the total global workforce will be considered non-traditional or non-employee.
The benefits earned from contingent labor are universal: flexibility, scalability, and access to key skill sets. While there are similarities in the ways to manage and approach contingent labor on an international level, there are also important differences to take into consideration.
“Building a global baseline in the United States and expecting it to lift and shift into other countries causes a very difficult rollout,” advises Michael Magevney, vice president of global strategy for vendor management system provider Beeline.
Why? Maturity of markets varies greatly, and there can be grave differences in labor laws, tax laws, and data privacy laws. “Canada and the United Kingdom are also mature markets, but they have different statutory requirements than the United States, especially concerning taxes and Agency Worker Regulations. Organizations must plan for these difference,” he says.
Christopher Dwyer, research director and VP of operations at research firm Ardent Partners, agrees. “Most companies that maintain a global workforce are finding that each region holds its own unique laws, regulations, and guidelines,” he explains. “It’s becoming crucial for these enterprises to leverage automation and third-party expertise in not only wading through the specific regulations of these new regions, but have the proper understanding of how to attract talent (and) engage new skillsets.”
There are several steps organizations can take when planning a contingent labor expansion on a global scale. Drill down to a country-by-country level, says Brian Hoffmeyer, vice president of product marketing for vendor management system provider IQNavigator. “Consider the scope and saving from the implementation and use that to decide what countries you are going to go into,” he says. “Look at size of spend in each country and the ease of implementing in each country.”
How can technology help? Vendor management systems (VMS) offer platforms and dashboards to automate global workflow processes and better manage international workers and suppliers through data and analytics.
“With the help of a VMS, organizations can take a more systematic approach to complying with laws and local practices no matter the country or the regulations,” says Anna Burke, director of global marketing and communications for Fieldglass, a software company that provides cloud-based vendor management platforms and acquired by SAP in May 2014. VMSs can help ensure proper process, pay rates, and compliance—major steps to growing globally. In fact, Ardent Partners research has found that VMS users are 55 percent more likely than companies not leveraging VMS technology to have formalized plans and strategies for contingent labor expansion.
How? Magevney says data from VMS reports provide a clear picture of worker dynamics across an organization. Reporting can offer:
- Total number of workers per country;
- Total number of workers per job title;
- Number of open position requests per country;
- Number of open position requests per job title;
- Bill rate metrics by job title;
- Spend by supplier globally;
- Spend by supplier by country; and
- Time to fill cycle time.
“Companies that aren’t considering analysis and reporting across the entire workforce are missing the boat,” says IQNavigator’s Hoffmeyer. Proper analysis of data can deliver the transparency organizations need on pivotal basics like total headcount by country and pay rates, as well as bigger picture issues like impending workforce trends.
“With a VMS enabled global contingent workforce management program also comes centralized visibility into labor availability, workforce costs, program performance, the supplier network, and other important program data,” says Joan Davison, president of Staff Management | SMX. “This visibility
provides the ability to make more effective decisions on where and how work is performed. It also enables the identification of opportunities for best practice sharing between end-users that are managing similar projects or facing similar challenges.”
This technology helps to streamline processes in several ways:
- Manage requests. Processing all worker requests through one system allows transparency. A VMS provides organizations with a consistent way to submit and approve worker requests, to select and onboard candidates, and to track the amount of time worked.
- Consolidate invoicing. Magevney says a VMS can house all invoices under one roof, helping to reduce paperwork and manual processes.
- Build rate cards. Organizations can struggle with accounting for the various pay rates by job type and market. “A VMS allows you to better manage rates and easily adjust when job titles and markets change in certain geographies,” says Magevney.
Fieldglass’s system has a manage pay parity feature to oversee pay entitlement rights per local legislation requirements. Its pay rules engine also allows complex rate modeling for country, local, and client specific bill rates.
- Comply with worker tenure. Some countries have statutory laws around contingent worker tenure that must be followed. VMSs often provide information around worker tenure, cooling off periods, and scheduling assignments.
- Ensure data security. VMS technology can protect corporate confidential information across borders.
One factor that should not be overlooked is cultural nuances. “Temporary work has had a negative connotation, particularly in many parts of Europe, so to counteract these misconceptions, many countries have enacted legislation to protect the interests of temporary workers and grant them equality not just in terms of pay, but also for working conditions and benefits,” says Fieldglass’s Burke.
Burke recommends a few factors to take into consideration:
1. Business practices. Being conscious of local business practices will be viewed by locals as a sign of respect. For example, in France, China, and Japan the manner in which organizations conduct business is very specific and locals have a strong sense of pride in maintaining those values. Technology and program adoption rates will increase as a result of
respecting cultural nuances.
2. Locality. Enlist worker assignments to be consistent with country-specific considerations, including holidays, work hours, languages and time zones.
3. Due diligence. Some regions have specific and complex local legislation that drives how a process can be performed. Be sure to research and ask for assistance before building out a country-specific platform.
BOX: Global Matters
Anna Burke, director of global marketing and communications for Fieldglass, offers country-specific nuances that should be taken into consideration when expanding contingent labor on a global level.
Europe. In 2008, the European Commission (EC) implemented the Agency Workers Directive (AWD) that aims to protect the interests of temporary workers and grant them equality not just in terms of pay, but also for working conditions and benefits. The UK implemented the AWD directive in October 2011 as the Agency Workers Regulation (AWR). The AWR mandates that after a qualifying period of 12 weeks, a worker is entitled to equivalent pay of a permanent worker in the same role.
Japan requires complex overtime structures based on a worker’s monthly overtime activity. It can even differ depending on the time of the day and day of the week. This can cause a considerable amount of payroll and invoicing errors. Japan also has very strict regulations around candidate anonymity and the interview process.
Sweden requires very complex rate calculation and allocation rules based on shifts, time of day, and days worked that affect the contractors’ final rate.
France not only has complex, and dynamic pay rules but also other legal requirements. For example, it requires a three way electronic contract between the client, agency, and worker. They also have particular invoicing requirements and data archiving standards.
Netherlands and Belgium have complex rate rules that can vary by labor type, distance traveled each day, hours worked across shifts, meal vouchers, and time off aggregation for temporary blue collar workers. Plus trade unions require a full reporting of hours worked by blue collar workers for compliance to tenure limitations related to trade union rules.
Germany requires an hours report, design approval, and related items to a government-mandated work council for approval. The work council may have representatives on site at a customer location, and they review and approve the company’s estimated number of hours spent on temporary labor and ensures company compliance to temporary usage regulations.