Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM technology report. I’m Mark Feffer
Mark:
My guest today is Vish Baliga, Chief Technology Officer at SAP Fieldglass, not surprisingly considering Fieldglass is focused on procurement and contingent work. He spends a lot of time thinking about contingent workers and contractors. We’ll talk about what he’s seeing on this edition of PeopleTech. Vish, welcome.
Mark:
Obviously there’s a lot going on with the contingent workforce right now. What are the major trends and characteristics that you’re seeing?
Vish:
As you know, for us, at least at Fieldglass, from our perspective, it’s always been top of mind that the contingent workforce it’s a trend that has been trending upwards for many years. There’s an increasing number of customers looking to leverage contingent workforce. And some studies have shown that we are now up to about 42% of the total workforce is contingent level for most large companies, and in some cases it maybe even more. While that is not surprising, for us, we’ve also noticed that when there’s a significant downturn in the economy, when things come back up, this is the first indicator that things are turning around because we had a lot of uptick in contingent workforce usage. And now that we are coming, sort of coming out of the pandemic situation that we have experienced, we see that trend again, being reflected in what we see.
Vish:
So there’s an uptick in consumption, uptick in hiring more contingent workers. And our belief, as usual, has been that this trend occurs because it’s an easy way to try something, because if you’re still unsure, whether you want to bring in full-time employees versus contingent work, you get your work done with them. And then as things stabilize, then maybe you add more into your full-time. That’s going on, but other interesting trends we are seeing is there are a number of ways the contingent workforce is evolving. Now, it’s no longer traditional leader stopping. We see a lot of the gig and the freelancer systems coming in. There’s multiple channels to bring in contingent workforce. And we see that as a new and upcoming trend that doesn’t seem to have any constraints around it. So we are seeing it occur geographically, we are seeing it occur in niche markets. So I think it’s a growing trend that we’re observing.
Mark:
Okay. Let me shift gears a little bit. I want to ask you a little bit about Fieldglass. When I think about Fieldglass, I think about a VMS and I’m wondering what visibility is raised with a system like Fieldglass, and why would a company use it rather than, say, success factors?
Vish:
Great question. So people tend to think of us as more of a VMS is in some ways a misnomer, because it looks like we’re managing the supply. That’s not what we are managing. We’re actually managing the requisitioning, the onboarding, the upskilling, if you will, and the utilization of external labor, all the way to payment, right? So the reason why a company needs to look at this is, HR systems are geared towards more of either the employee or the HR group, or maybe the immediate managers of the individual being responsible for who they have, who’s in the system, what skills they have, what roles they play, where they work, et cetera. For external labor, that doesn’t fit in as cleanly into the HR system, and plus people tend to forget that the individual, that is contract worker or temp worker that you bought in, is not really an employee of the company, but is in many cases, an employee of a vendor.
Vish:
And so there is equal ownership of that record. There is two companies that manage that individual and has sort of some responsibility over it. So that end to end visibility, would you will find lacking because this individual cannot simply be extended and cannot be simply asked to work on something else that you have to work with a vendor to kind of make sure that you are keeping that other companies control over this individual, also have consideration. So it’s people tend to forget that it is not about just a person, but who is the employer and who has the ownership. And that then translates into what I would call the transparency and visibility on managing that resource, making them available, upskilling them. It’s kind of a joint effort depending on what the company is trying to get out of that individual.
Vish:
And another big thing is these individuals are generally on a shorter term assignment. They come in and out. So unlike in an HR system where you have an employee, hopefully for a long tenure, with contingent workers that are coming in, popping in and out in various channels through different suppliers in different engagement types. So having traceability of that individual as they come in and out from the company is very key. And in many cases they could have been a former employee or in some cases they may become a future employee. So having that traceability is critical for a system like ours to provide for a company.
Mark:
We were just talking a little bit about, essentially, trading off information about an employee between VMS and a HR system. Can that happen? Can a VMS and an HR system work together?
Vish:
Yes, I think there is tremendous synergies and we see, well, I would say we are, sort of, at the tip of the iceberg, there’s a lot more that can be done. So today what we see is a procurement sort of occurring or procurement equal end of hiring for employees, occurs through a VMS. Once the individual is identified, they are then usually onboarded into what I would call loosely an HR system, but more for a badging and internal access to systems, et cetera, allowing them to enter facilities, give them badges, maybe put them through some training, which are loosely HR solutions. However, what is more important in my mind is the ability for HR systems to take what the non-employees and the employees, and look at the total pool of talent and use them in an efficient way for staffing projects for, let’s say, what are the resource skills, in terms of gaps that they may have on the HR side?
Vish:
If you keep on bringing in some contingent workers to do a particular type of work, why is it that we are bringing them in Y quantity? HR side, look at it and say, “The B seem to be spending a lot on this skill. Should we be upskilling our internal employees to that skill?” All of that workforce planning, workforce training, workforce scheduling, are elements that are very critical and we have not yet gone into that. We are simply at the early stage of just being able to say, who is this individual working for us? Where are they from? Which supplier do they represent? We are just at that nascent level. From there on it’s not just the planning that you can do, but it’s also things such as, where has this individual been before? Contingent workforce itself has multiple modules, but people tend to think it’s only when you have a contingent worker hire directly from a supplier and you’re managing them that they’re considered a contingent worker.
Vish:
For me, it’s a much broader definition. There are many service organization that you have outsourced to. Those service organizations have workers behind it, working on a company specific project. As a customer that has bought into this service procurement, you have no visibility into who those individuals are getting access to. Who’s delivering the service? What role did they play? Were they formerly a contingent worker? Were they formerly an employee, et cetera, the traceability is immensely useful. And I don’t see many doing that. We are trying to do that. There are some customers who are well on that way, and they see the value of having the traceability and the ability to track and do it all the way across it. Those are some examples.
Vish:
Then if you look at things like recruiting. In recruiting, we’ve been trying to push this concept of what we call the silver medalist. If you’re trying to hire an employee, you may put out a rec and your recruiters find you two, three great candidates. And then sometimes you may find really three great candidates, but you’re only one [inaudible] Companies will end up offering that individual a job. But there may be some temp workers or continuing roles available. So what about leveraging the silver medalist? Almost like we’ll put you onto the contingent worker. All good for now you can work there, but we expect a new position to open up soon. We keep you connected to us. And when that position opens up, we’ll hire you. The concept of being able to take that good candidates and keeping connected with them, maybe provide them some employment, till such time there’s a full-time position open, is something that we think is a valuable thing for companies to do.
Vish:
And reverse of that, is also if you have an employee who is seeking to downside and say, or not downside, but say, I can do less hours. There is a possibility that you can say, “Okay, maybe you can be a contingent worker for us through a tool and you’ll still stay connected. You’re just not going to do 40 hours. You’ll do reduced hours.” You find a payroll provider, hook them in through that payroll provider and then continue to manage and we have access to them. So those are things that I think will be useful to look at how things work between HR solution and VMS like us.
Mark:
Obviously the pandemic has uprooted a lot of assumptions about the workforce. And I think the contingent workforce is, is part of that. They’re being viewed differently. They’re in very high demand. How do you see the contingent workforce evolving over the next few years? And what’s Fieldglass doing to keep pace?
Vish:
Okay, great question. The biggest trend we saw is… Maybe a little bit background might be useful here. The Fieldglass primarily continued consists of two major modules, there’s another mining module, but the two major modules are what we call contingent worker, where you requisition for a particular skill, for a particular duration and at a particular place and you agree on terms and conditions and you bring them on. That’s our contingent workforce module. And then we have what we call the services module, where you engage with the vendor and you say, “Here’s something that we want you to do.” Outcome based, you manage the resources. We are not responsible for managing the resources that do the job. Those are the two major modules.
Vish:
What we see occurring is newer avenues to bring in resources like the freelance management systems that I talked about. And they could be independent contractors that are also engaged. And then there could be other kinds of labor that are coming in through various channels. We see more and more of these coming up and more ways that a company can engage with external labor. Now, if you are a company and you’re trying to say, “I want to have unified processes. I want something similar across all of these ways that we’re bringing in external labor.” We need to be able to handle that. So we recognize, as Fieldglass, that we are not a standalone system, that’s also every single access matter for getting every different kind of external labor into the company. So we are creating this partner ecosystem where we want to think of, much like how for contingent workers, a company has its preferred vendors. And it’s a set of vendors based on what you’re trying to procure. You might say, “Go to these vendors for, these are our preferred vendors. So if you have a requisition, we’ll send it out to these 10 vendors. They will submit candidates and we can hire.”
Vish:
Similarly, we are thinking of these other systems that can bring in these various other niche type of individuals. We’re thinking them as a distribution strategy. So you create the requisition much like you would, let the source and let the supply come from any one of these standards. And we do that by partnering with all these providers to say, “We have the demand from the company side.”, the company would like one way to get people in, you raise the request to say, “Here’s what I need.” Don’t worry about which source will fulfill it. Let them all have an equal opportunity. So you spread out and treat each of these as channels of suppliers to get the candidate in. And you pick the best candidate.
Vish:
You don’t have to say, “Must come from my preferred vendor.” You don’t need to say, “It must come from this freelance management system, or it must come from this icy pool. Or this comes from is internal pool.” Decouple that make the requisitioning key, follow the same process for getting approvals and whatever else you need internally. Let that go out to all your different channels. Let the channels provide the candidates, let the manager interview and figure out who they want, let them make the decision. So that is how we see this.
Vish:
We want to play a larger role in the process and not worry too much about where the supply chain from. By hooking into these partners solutions and treating them “much like you would a supplier”, we think of them as different channels to bring in whatever the company needs. From a company perspective, it’s uniformity. They are one place to go. They are one place to raise requisition, one place to get the PO issued one place to receive time and expense, one place to pay for. Obviously you go and pay different people and different sources, but the process remains uniform for the company.
Mark:
Vish, thank you very much.
Mark:
My guest today has been Vish Baliga, Chief Technology Officer at SAP Fieldglass. And this has been PeopleTech, the podcast of the HCM technology report. Republication of recruiting daily. We’re also a part of Evergreen podcasts. To see all of their programs visit www.evergreenpodcasts.com and to keep up with HR technology, visit the HCM technology report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.
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