[Publisher’s note: Our upcoming CPO Rising 2014: Convergence report will be released early next month and it has many interesting findings, trends, revelations including the typical Chief Procurement Officer’s newest areas of focus and responsibility. Hint: One major area is also the focus of today’s article. More on that soon, but for now… installment three covering the State of Contingent Workforce Management, Ardent Partners’ landmark new research study. In this series, report author and Ardent Partners’ Research Director, Christopher J. Dwyer, will highlight key findings from his report and outline just how much this space has evolved. If you are interested, copies of the report can be found  here, here, and here.]

Ardent’s new State of Contingent Workforce Management research study has discovered that contingent labor is expected to grow by nearly 30% over the next three years, a figure which accurately represents the growing reliance on the non-traditional workforce. While there is inherent value in leveraging contract talent, such as flexibility and access to high-level skillsets, many enterprises frequently ignore the risks in utilizing this type of workforce.

I’ve spoken about the dangers of avoiding onboarding and offboarding here at CPO Rising in the past, as well as the various risks associated with the utilization of one of the three major categories in the Contingent Workforce Management Framework, independent contractors. There’s been a recent market shift to better “control” contract talent due to the fact that it’s growing rapidly and touching all avenues of the average enterprise.

The concept of “identity management” has risen as a viable challenge in the contemporary scope of contingent workforce management. Contractors, consultants, temporary workers and services all often have access to enterprise systems, sensitive data and information, and various business locations and hardware. It is critical to control this talent and ensure that proper steps and measures are taken to combat the loss of intellectual property or sensitive intelligence (such as financial information).

The State of Contingent Workforce Management research report has discovered that while nearly 64% of organizations institute regular reviews of contract labor compliance against requirements (federal, regulatory, etc.), only 43% include detailed, written assumption of risk (company vs. supplier) of work completion ownership in SOWs and other agreements. This lapse can present a significant issue of risk management in an adverse event (supplier / service goes bankrupt, shuts down, etc.) and leave critical enterprise projects in the wake.

Also, although nearly 70% of enterprises have visibility into system access by SOW-based service workers and contract talent, a mere 44% have implemented proper compliance measurement during the offboarding phase. It’s important to note that maintaining current visibility is not enough; it is critical for organizations to ensure that temporary IDs, usernames and passwords to enterprise systems (such as ERP, A/P, general ledger, etc.) are deactivated to mitigate the risk of losing intellectual property or sensitive financial information during the offboarding phase for all contractors and services.

While there are often cost and quality concerns in the greater utilization of contingent labor, lapses in identity management capabilities can have dire effects. In this new “state” of contingent workforce management, this aspect should be top-of-mind in any CWM program.

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Welcome to the New “State” of Contingent Workforce Management, Part I: Quality!

Welcome to the New “State” of Contingent Workforce Management, Part II: The Framework

Tagged in: Ardent Partners Research, Christopher Dwyer, Complex Categories, Contingent Workforce, People, Strategy