Key Considerations: Contingent Workers – An Overview in SAP SuccessFactors
The global use of contingent labor may be a growing trend in the workplace, but how are companies leveraging technology to manage this group of workers?
Contingent labor is a group of workers who provide services to an organization on a non-permanent basis. Some common terms used for this labor group are:
- Independent Contractors
- Sub Contractors
- Temporary Workers
We continue to see companies struggle to get their arms around this elusive workforce. What work they are performing, where they are performing it, who is overseeing the work and most importantly, are they in compliance with country specific labor regulations as pertains to contingent labor?
Additionally, companies may be hesitant to include these workers in their HRIS systems, as they are not paid through payroll, differences in employee data vs contingent worker data, not subject to typical employee lifecycle processes such as performance management, and may already be housed in a vendor management system such as Fieldglass.
SuccessFactors Employee Central offers a Contingent Workforce Management capability that enables a complete view of the workforce in the same manner as the permanent employee workforce. Additionally, SuccessFactors Employee Central integrates directly with Fieldglass allowing a seamless interaction between the two applications, leveraging the capabilities and differences of each.
Pros for using Contingent Workforce Management in Employee Central
- Provides one place to house your workforce, permanent and contingent, for use in workforce metrics and reporting, identifying labor related trends in your organization and provides a wholistic view of labor for executives and HR professionals.
- Enables contingent workers to be included in select HR processes, such as the assignment of courses from an LMS system, or a specific onboarding experience tailored to the contingent worker. (Connection to SuccessFactors Onboarding is on the roadmap for Q3 2018 tentatively not confirmed)
- Integrates with Fieldglass. Fieldglass can manage the intricate details of SOW, Requisition process, Vendor details for this workforce, while Employee Central can include this workforce in manager personnel actions (MSS), workflows, permissions, position management, and reporting.
- Open Contingent requisitions can be created from EC if using Position Management.
- Provides for visibility into the Statement of Work for the contingent worker.
- Managers have easy access to any contingent workers that are under their responsibility and are able to take action on these records in the same way they would for any permanent employee, or as desired.
- Contingent workers are easily identified in Employee Central with a special label when viewing the profile, org chart or when searching on employees/contingent workers. Additionally, they can be included or not included in workforce reporting where needed, by using a filter on the Is Contingent Worker field in Employment Details.
- Allows for the filtering of non-essential personal or employment related fields, that may not pertain to a contingent worker either by rules or by the use of role based permissions.
- When contingent workers convert to permanent employment, the same Employee Central record can be used to maintain the full history of that employee under one employee id if desired.
Cons for using Contingent Workforce Management in Employee Central
- The Work Order drives the contingent worker record, so that if the end date of the contract is reached, the contingent worker record is automatically terminated unless the end date is extended.
- The HR function does not normally manage the contingent worker process, so access to process owners at time of implementation may be troublesome.
The following items should be taken into consideration when deciding to use Contingent Worker Management:
- Who owns the company’s contingent workers? Is it legal, contract compliance, procurement, accounts payable or HR? This is a common question that companies often struggle with. We recommend assigning an “owner” for the contingent workers, who will oversee and/or redesign necessary processes for the accurate and timely management of contingent worker data for use in Employee Central.
- What is your company’s definition of a contingent worker? This should be clearly defined before implementation in order to facilitate decision making and engineering of your processes.
- Using your existing Employee Central configuration, decide what fields are relevant for the contingent worker and what fields should be hidden in Personal Information, Job Information, Biographical Information and Contact Information.
- Certain areas commonly used for employees in Employee Central are not present for the Contingent worker, such as, Profile, Time Off and MDF objects such as Alternative Cost Center Distribution. Plan your data accordingly.
- To convert a contingent worker to a permanent employee, the contingent worker record should be terminated and then “rehired” in the system as a permanent employee. They will have same Person ID but different User ID. User ID is for each employment e.g. Global Assignments, Concurrent Employment & for Conversion between EE to CWK or vice-versa
- To convert an employee to a contingent worker, they should be terminated and Add Contingent Worker feature enabled. Termination step is mandatory to hire employee as CWK
- Will you be integrating the contingent workers with Fieldglass or another VMS? Ensure that the VMS system requirements are known upfront so there are no surprises during implementation.
- Finally, this goes without saying, but we’ll say it anyway, compliance regulations for contingent workers are many, sometimes complicated and differ depending upon the country where you are using them. Knowing what is required to stay in compliance and avoid the nasty DOL audits, or worse, penalties, should be a priority and should drive decisions and process design during implementation.