Editor’s note: Interested in learning more about how the contingent workforce will continue to evolve in the year ahead? Make sure to join us on Tuesday, February 17 at 2pm for a webinar (sponsored by Beeline) that will highlight the necessary best practices for managing this category. Click here to register for the webcast. You won’t want to miss this event!
The Chief Financial Officer (CFO) of the typical organization is now tasked with more than ever before, often asked to be the “savior” of enterprises that struggle to maintain a clear picture into total cash and corporate finances. CPO Rising is pleased to present a series that highlights the “CFO’s view” of various functions and categories within the contemporary enterprise. Today’s article: the CFO’s perception (and ultimate involvement) in the management of contingent labor.
The world of contingent workforce management (CWM) is growing in stature, size, and strategic corporate importance. The very notion of “non-traditional talent” is one that is actively forcing the modern enterprise to place more emphasis on how they are controlling, managing, and utilizing this talent, especially considering its expected growth (30% increase in utilization over the next few years). In the midst of this strategic uprising in the world of non-traditional talent, there is often a question of responsibility for operations, processes, and capabilities. And, typically, the burden falls on either procurement, human resources (HR), or both.
However, what’s often understated is how the CFO and the finance function fits into all of this. What’s his / her role? What can finance add from a value perspective? How can CWM evolve into something “more” from the CFO’s involvement?
- Visibility is the key for finance in regards to CWM. There’s no more obvious aspect to finance’s involvement or impact in CWM than “visibility.” Nowadays, most contingent workforce programs “touch” realms beyond procurement and HR, often aligning with IT, treasury, supply chain management, and, of course, finance. Visibility is key in understanding the greater ramifications of contract talent, and finances play a critical role in that level of visibility. The CFO is often the leader of visibility enhancement efforts, and it’s imperative that this role be involved in CWM from an intelligence perspective.
- A link between cash and talent. The “talent” here can take many forms, from freelancers to independent contractors to traditional temporary labor. In any case, most forms of non-traditional talent are tied to enterprise projects due to the specialized skill sets required by these initiatives. Milestones, delivery dates, etc. are often linked payments, further aligned to project budgets, and this is where finance / the CFO fits into CWM. While supplier management initiatives often assist in this regard, the advent of analytics / BI software can help paint a more vivid picture of how non-traditional talent, and the projects they’re linked to, affect greater enterprise cash flow.
- A view of the future, and how contingent labor fits in. One advantageous aspect of the CFO role is the ability to plan and budget for the future based on forecasting data. By having access to contingent workforce data, such as usage, projects, suppliers, and quality / performance, the CFO and his / her team can estimate future utilization of contract talent, the funds needed for that labor, and the cost / finance ramifications of projects that will utilize contingent labor.
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