I came across an interesting article by Taleo CEO Michael Gregoire, where he cites research showing that almost a third of US companies have no idea how many--or what kind--of contingent workers they're hiring or who's supposed to be enforcing good financial and management practices for these contracts. Here's an excerpt:
"21% of Fortune 500 companies could not estimate their company’s annual U.S. contingent labor spend. Additionally, 33% could not report which, if any, department holds primary responsibility for minimizing their contingent workforce risk and liability. Another 50% of the Fortune 500 didn’t know if their company has ever defended itself against a contingent labor lawsuit."
If true--and my own experience says it probably is--that ought to be appalling to SOMEbody, right? How many companies could say the same about inventory or shipping costs? Or their employees? Not many, I'll bet. And given today's Sarbanes-Oxley requirements (which is really the point of Michael's article) that's not exactly a little "oops."
But here's the really scary part: Virtually every report I've read (and our own experience at HotGigs) says that corporations have really jumped on the contractor bandwagon in the last five years...and the use of contract workers will grow even faster over the next five. If we don't understand how we're using these guys and what we're spending on them today, what in the world are we going to do five years from now?
Michael has some suggestions for fixing that and notes that companies can save millions of dollars by implementing better CW management practices and tools. That's been our experience, too--companies that use our ContractCentral contingent workforce management systems are finding they have a better handle on what they're hiring, who they're hiring from, and what they're paying. That gives them a lot of leverage going into staffing vendor negotiations...and it also helps them stay in compliance.
Do you agree with Michael's article? How do you manage your contract workforce? (Or do you?) Have you run into problems with compliance auditors over staffing practices (and if so, how did you solve them)?
Post a comment, or drop me a line--this is an important topic worth discussing.
Cheers--
--Doug
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