Contingent Confusion in Tallying Workforce

Large companies struggle to get a handle on the fundamental question of how many people make up their total workforce, says Edward Jackson, CEO of Provade, which makes software to track contingent workers.

Employers today may be making use of workers who are not actually employed by them, such as staffing agency temps, independent contractors and workers at outsourcers such as IT services provider Infosys Technologies.

“It was a lot simpler 20 years ago,” Jackson says. “Ninety percent of the total workforce was permanent, where today it is probably down to 60 percent or even lower in some companies.”

Jackson comes to that striking conclusion in part because of the significant number of employees who may be dedicated to a firm at professional services outsourcers. Such workers not only are not counted by firms in their traditional company headcount figures, but they historically haven’t been treated as part of their contingent workforce either. As a result, Jackson says, a company’s employee base may be shrinking or staying flat but its overall workforce may be expanding.

In many cases, Jackson says, outsourcers are asked to add workers for items above and beyond the outsourced function.

At that point, they are acting like staff augmentation firms.

“The resource may actually report directly to a company manager and be directed by them just like an employee,” Jackson says.

Provade is among the makers of contingent workforce management software that can account for workers at outsourcing providers.

Without a true tally of the people plugging away on its behalf, a company can lose the ability to optimize its operations, Jackson says.

“Where is your talent?” he asks. “Where is your productivity coming from?”

Workforce Management, April 2010, p. 28 — Subscribe Now!