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Determining program ownership: The case for other functions

CWS 3.0 - Contingent Workforce Strategies

Determining program ownership: The case for other functions

Peter Reagan, Frank Enriquez
| November 8, 2023

Main Article

In our two previous articles in this series on who should own your contingent workforce program, we looked at the case for HR and the case for procurement. While together the approaches account for 89% of programs in EMEA and 88% in the Americas, the balance of contingent workforce programs is owned by other functions. Here are the cases for the most typical of these.

The Case for Finance

Cost management/reduction. Skilled in budgeting and cost control, finance can effectively manage the costs associated with contingent labor, ensuring that the organization gets the best value for the money. This includes negotiating rates and contracts to keep costs in check. With their expertise in financial analysis, finance departments are well positioned to identify areas where cost reduction is possible, such as reducing reliance on expensive contingent labor or optimizing workforce utilization.

Financial reporting. Generating financial reports and analytics. With finance in charge of the contingent workforce program, it’s easier to track and report on the financial impact of contingent labor, enabling better decision making and resource allocation.

Compliance and risk management. Finance departments are generally well versed in regulatory compliance and risk management. Given that CW programs often involve complex legal and compliance issues, finance will often have the authority to help ensure that the organization complies with labor laws and manages associated risk effectively.

Resource allocation. Finance professionals, if suitably committed to the category, can help align contingent workforce spending (via budgeting/forecasting) with the organization’s strategic goals. They can assess where contingent labor is most needed and where it can be scaled up or down to meet changing business demands.

Efficiency and accountability. Finance departments can implement financial controls and processes to monitor the productivity and effectiveness of contingent workers, leading to improved performance and cost efficiency.

Data analysis. Finance departments can analyze historical data and trends related to the contingent workforce to make informed decisions about hiring, retention and workforce planning.

Strategic decision making. Finance can bring a strategic perspective to the contingent workforce program, considering factors such as return on investment, overall labor costs and the alignment of contingent workers with the organization’s goals.

The Case for IT

Faster onboarding. IT departments are familiar with the tools, software and systems used within the organization. This knowledge can help in the smooth and expedited onboarding of contingent workers, reducing the learning curve.

Security and compliance. IT departments are responsible for data security and compliance. With IT’s involvement, they can ensure contingent workers follow cybersecurity best practices and adhere to data protection regulations, reducing security risks.

System integration. IT can oversee the integration of contingent workers into the organization’s IT infrastructure, such as providing access to necessary systems, tools and networks.

Project management. IT often manages complex projects, and contingent workers are frequently hired to support project-based work. Having the IT department oversee the CW program can help with project management and resource allocation.

While having the IT department manage the contingent workforce program offers these benefits, collaboration with other departments, such as HR and procurement, is crucial to ensure a holistic approach to workforce management.

The Case for a Dedicated PMO/CoE

Cost control. A program management office/center of excellence can closely monitor and control costs associated with the CW program. By standardizing processes, negotiating favorable contracts and optimizing resource allocation, the PMO can ensure that the organization gets the best value for its investment in contingent labor.

Quality assurance. The PMO/CoE can establish standardized quality control measures and performance metrics for contingent workers. This ensures that the workforce meets the organization’s quality standards and performance expectations, contributing to improved deliverables and outcomes.

Efficiency enhancement. A dedicated PMO/CoE can streamline and centralize the management of contingent workers, reducing administrative overhead and improving operational efficiency. It can also implement best practices, workflows and tools to enhance the hiring, onboarding and management processes.

Risk management. CW programs often come with legal, compliance and security risks. The PMO/CoE can implement robust risk management strategies, ensuring that contingent workers adhere to regulatory requirements, cybersecurity protocols and data protection standards, thus reducing potential risks to the organization.

Scalability and flexibility. The PMO/CoE can adapt the CW program to meet changing business demands, ensuring that the organization can scale up or down as needed - whether for project-based work, seasonal demand or other fluctuations.

Vendor management. The PMO/CoE can effectively manage relationships with external vendors or staffing agencies that provide contingent workers, ensuring that these vendors align with the organization’s process and policies.

Continuous improvement. The PMO/CoE can conduct regular assessments and evaluations of the contingent workforce program, identifying areas for improvement and implementing changes to enhance cost-effectiveness, quality and efficiency while reducing risk.

Data-driven decision making. PMO/CoEs can leverage data and analytics to make informed decisions about the contingent workforce. Data-driven insights can help in resource allocation, workforce planning and optimizing spend.

Compliance and auditing. The PMO/CoE can oversee compliance with labor laws and regulations as well as internal policies. They can also conduct audits to ensure contingent workers and vendors are adhering to the organization’s standards.

Consistency and standardization. A dedicated PMO/CoE can establish standardized procedures and guidelines for hiring, onboarding and managing contingent workers, ensuring consistency in processes across the organization.

Overall, a dedicated PMO/CoE brings structure, accountability and strategic oversight to the contingent workforce program, aligning it with the organization’s goals and ensuring cost-effective, high-quality, efficient and compliant workforce management.