Are Your Staffing Costs Being Properly Tracked?

ThinkstockPhotos-459434705Nearly 60% of all contingent labor is unaccounted for in financial planning, forecasting, and budgeting within the average company, according to a new report by CPO Rising. Put another (and equally disturbing) way, $6 out of every $10 spent on temps, SOWs, freelancers and/or independent contractors is being invested almost blindly. Limited oversight. Limited control. Limited planning. It’s not surprising then that one of the top challenges for businesses in 2015 is getting visibility into their contingent workforce.

The on-demand labor boom has provided tremendous opportunities for businesses to strategically access new sources of freelance talent. Unfortunately, the talent rush has left many companies unequipped to deal with the nuances (labor compliance, talent curation, etc.) associated with non-traditional work.

How much are we spending on freelancers in New York? Are legal guidelines from HR being enforced? What percentage of our overall contract spend went towards engineers? These are questions any CFO or CHRO would want quick, direct answers to. In reality, it’s more like pulling teeth.

So what’s the problem? Why is $6 out of every $10 spent on contingent labor not being tracked? The simple answer: most businesses haven’t yet implemented the processes or technology needed to properly manage the freelancer component of a contingent workforce. They’re simply not equipped.


Some of the companies we’ve talked to still rely on spreadsheets. Others use an accounting software or a CRM. Bottom line: the ability to track every dollar spent on contingent labor has proven enormously challenging. Moreover, the process (or lack thereof) leaves sizable gaps in an organizations; gaps that can lead directly to the infamous “rogue spend,” one of the leading tormentors of financial executives for the last 50 years.

As traditional staffing channels continue to evolve, staffing, operational, finance and procurement executives would be wise to embrace new technology aimed at helping simplify the complex world of contingent workforce management. One such option: Freelancer management systems (FMS). This SaaS tool enables enterprises to self-manage their engagements with independent workers from from procurement to payment and everything in between.

Executive-level dashboards in an FMS provide quick insights into every aspect of your company’s contingent workforce. Within minutes, you can know exactly what you spent on contingent labor in 2014. You can determine which months you had the largest 1099 outlay, and even generate accurate forecasts for 2015.

With the market for contingent workers set to explode in the coming years (45% to 50% of the overall workforce), now is the time to arm yourself with the systems, process and data to manage contingent labor in scale. The question is simple, can you really afford not to be using an FMS?

Last week, I participated in a webinar with SIA analysts Bryan Peña and David Francis to discuss the current state of online staffing and explore how FMS technology is revolutionizing how businesses find and manage contingent labor. If you missed it, you can view the replay here.

MORE: Where staffing industry tech is heading

Jeff Wald

Jeff Wald
Jeff Wald is co-Founder and president of Work Market, the leading enterprise-class FMS platform. You can follow him on Twitter at @jeffreywald.

Jeff Wald

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