We’re in a challenging economic and business climate requiring organizations to move quickly and decisively to navigate complexity. If you can’t flex your workforce suddenly, you will not have the responsiveness that’s critical in an uncertain market. Yet, many leaders still lack the visibility they need to understand their complete workforce — and without visibility, true business agility is impossible.
Most organizations have small windows of insight when it comes to third-party talent. They often have contingent labor oversight — headcount, location and perhaps some cost data. But the picture is murkier when it comes to other third-party workers. Workers can be hidden behind a statement of work or unconventional hiring manager agreements; they might only be visible as a transaction on a purchasing card. These unseen third-party workers aren’t showing up in HRIS or vendor management systems, which should be a huge concern for leaders. Poor workforce visibility represents an acute organizational and financial risk and means a business cannot operate efficiently and effectively.
A contingent-only focus misses the big picture. Contingent workforce insights are important, but focusing attention here misses the big picture. Leaders need to be able to see any labor that’s not full time — their entire third-party labor category. In terms of complexity, temporary and contingent labor is the low-hanging fruit for improving visibility; the messier, more complex third-party labor such as gig workers, contractors, consultants and others are much harder to track, but just as important. Organizations must ask themselves, “Where are the areas where we use non-perm labor, and how do we see it more clearly?”
Choose a technology partner who helps you see further. Agility and investment in visibility-boosting technologies is closely linked. Our 2023 Kelly Global Re:Work report discovered that the most successful organizations — those that report better customer satisfaction and profitability — are also the most agile. We call them “Workforce Resilience Leaders,” and 73% use technologies that give their leaders visibility of contingent and permanent talent and the impact of this mix on business costs (compared with 57% of other organizations).
It’s vital to ensure that any technology investment gives more than a surface level view of your workforce. Some technologies can produce headcount visibility and not much else. That’s a good place to start, but it leaves a lot of risk on the table. Leaders need to know who has access to their facilities and computer systems, how workers are classified and how much they are paid. Look for a technology or workforce solutions partner who can help you see deeper — this will offer more opportunities to reduce risk, lower cost and boost workforce agility.
Don’t let risk concerns keep you in the dark. There is genuine concern that collecting too much data on a third-party worker will put a company at risk of co-employment. Of course, information should always be collected mindfully, but just ignoring a significant section of the workforce is a mistake. Conversely, if you don’t know who is in your workforce, it can increase risk — making it impossible to classify workers appropriately.
Businesses that have been on visibility journeys have changed the way they use labor. They are reclassifying workers to mitigate risk; they are driving down bill rates in problem areas; they are enacting smarter policies based on a real-world view of the people that power their business. These leaders can respond with agility and move faster because they understand their true labor capacity and where flexible talent can effectively fill gaps.
It’s tempting when budgets are tight to focus on the permanent workforce or to ask hiring managers to fill jobs however they can without worrying about the details. When you can’t see your entire workforce, you will always be at a disadvantage — regardless of your business goals or challenges. The only way to strengthen an organization and ensure it stays agile is to understand it. Shining a light on the third-party workforce isn’t a nice-to-have or something to get around to; it’s an essential investment for organizations that must be agile enough to face an uncertain future.