CHROs are pursuing digital transformation in order to better manage their entire workforce—including contingent workers. To reach that goal, they should align with their partners in the C-suite before the technology selection process starts.
This blog was originally posted on VNDLY.com in February 2023.
With the continued expansion of the contingent workforce, many chief human resources officers (CHROs) are pursuing digital transformation in order to better manage not only full-time staff but their entire workforce—from recruiting through offboarding. Generally, this type of transformation demands a fully integrated technology ecosystem that includes both a human capital management (HCM) solution and vendor management system (VMS).
However, accelerating digital transformation across your total workforce requires more than integrating your HCM with a VMS. To enable transformation that creates actionable results, you need to digitize business processes and models. By building a scalable strategy that aligns your executive team, leverages the right technology, and connects workers across your organization, your company can enable total workforce digital transformation and influence future outcomes.
In the Deloitte survey “Creating Value and Impact through the Alternative Workforce,” 45% of employers reported having difficulties filling open positions. To fill these gaps, many companies are turning to the contingent workforce, making technology for managing their total workforce a priority.
When done right, digital transformation for your total workforce can help your organization:
Automate manual processes. Managing your total workforce in a centralized hub removes data entry tasks and reduces the time spent validating the data. Beyond data tracking, native connections between your HCM and VMS automate important onboarding and offboarding tasks.
Increase hiring speed. Identify hiring needs and post job openings faster, enabling you to hire top contingent talent before other companies have even created a listing. The ability to rapidly adjust to meet available resources offers management more flexibility when there’s a worker shortage or supply chain issues.
Improve resourcing and spend management. Having centralized data allows your business to unlock new business models and insights, leading to better predictions, planning, and business outcomes.
Enhance vendor and SOW oversight. By tracking your workers, hiring process, spend, and vendors all in one location, your visibility into vendor performance and statement of work (SOW) spend increases and reporting becomes more accurate and useful.
But to enable true digital transformation, you need more than the right technology. Process modernization and business model digitization, along with moving to an agile management approach, are just as important. To achieve true digital transformation, you need to create a strategy that aligns your executive team and scales with your total workforce growth.
Enabling digital transformation in human resources (HR) requires buy-in from more than just the office of the CHRO. To see true impact, organizations need an aligned technology ecosystem, as well as alignment between the procurement, finance, IT, and legal teams from the very beginning.
Aligning the CHRO, CFO, CIO, chief procurement officer (CPO), and your legal team is a necessary step to facilitate digital transformation in workforce management. Working together to understand your program strategy and the kind of technology your company will need is an essential first step to successfully transforming the way you manage your workforce.
To start, you should consider each team’s priorities, including your own, and ask how those needs can be supported. For example, many teams are concerned with questions such as: “How do we ensure compliance in a global workforce?” or “How do we fill skills gaps on our team?” While these are fairly high-level concerns, they’re critical for understanding how to align your executive team and create a plan for managing your contingent workforce now and in the future. And ultimately, one team’s priorities will usually benefit others. For instance, HR’s ability to nimbly hire and attract top talent will benefit IT’s need to fill skills gaps.
Some companies are already moving toward this type of alignment. In Workday’s “Closing the Acceleration Gap: Toward Sustainable Digital Transformation” report, 45% of CIOs surveyed said that they are investing in technology to unify financial, people, and operational data. This aligns with 61% of CFOs saying this technology is one of their most pressing needs, in the same report. Understanding the needs and priorities of each team allows the CHRO to earn the support of fellow executives in their quest to find a scalable, innovative technology solution to manage the workforce.
As companies recognize the need for digital transformation in the contingent space, they often develop a system that works in the near term, but won’t scale with growth. This lack of flexibility reduces a company’s ability to make changes to its workforce, creating an impact felt acutely by many business leaders. In fact, 30% of respondents in “Closing the Acceleration Gap: Toward Sustainable Digital Transformation” reported a need for greater agility and the capability to quickly reorganize the workforce around new initiatives.
Aligning the CHRO, CFO, CIO, chief procurement officer (CPO), and your legal team is a necessary step to facilitate digital transformation in workforce management.
Taking a proactive approach to managing your extended workforce usually means having technology in place to support it before your organization has reached the $10 million in workforce spend figure. This way, as your workforce grows and changes, you’ll have a strategy in place for growing or shrinking your workforce as necessary.
While organizations often have an HCM system and strategy in place for managing full-time employees, they often don’t have these systems in place for extended workers. This can cause significant difficulties as the workforce grows, forcing management teams to move away from manual processes.
As such, you need technology that can facilitate your goals of automating processes, increasing organizational agility, and improving resilience amid sudden market changes—and can scale as you bring on more contingent workers. By anticipating and preparing for growth, you can create digital transformation that pays dividends both now and in the future.
Ready to get started? For most companies, the most effective way to meet HR needs across the total workforce and accelerate digital transformation is to use a “hub” model, which seamlessly integrates an HCM and VMS platform. This provides your team with an aligned technology ecosystem that increases visibility across your entire workforce, both full time and contingent.
By leveraging a hub model, you can prepare for changing workforce trends, as well as provide the right technology to support your HR, finance, and procurement teams. When supported by alignment across your executive team and a strategy for scaling to meet future growth, this approach can be a game-changer in enabling digital transformation that provides value across your entire organization.
As the expansion of the contingent workforce continues, the imperative to build a scalable strategy that can support the total workforce grows, too. By adopting the right technology, aligning your executive team, and applying a hub model, your organization will be well on its way to creating a critical competitive advantage through total workforce digital transformation.
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