External Workforce- to see, or not to see?

Many organisations may have an external Flexible Workforce supporting their business, however may not be managing them, which in turn leads to no visibility. This can happen for multiple reasons: 

  • They are not employees – why should I care?
  • Don’t have the headcount – but need to get the work done!
  • Don’t have the Operating expenditure – but have the Capital expenditure
  • Need to get the job done quickly – going through internal approvals could slow down the process
  • Only delivering a project – why do I need to know who is working on it?
  • No program in place to manage

There are many potential risks to businesses who are not managing their Flexible Workforce:

  • Deemed employment – There is a very fine line to ensure that a person does not become deemed employed (the rules change country to country)
  • 3rd Party Tax and Statutory exposure – Governments will not go after the individual resource, but will go after the Customer
  • Worker misclassification – can lead to overpaying suppliers and fines in some legislations
  • Fraud – No control on who is on your site and what they potentially touch
  • IP leakage – No rules around on and off boarding
  • Liability ownership – As soon as you start managing a person (even if project based), you are liable
  • Cost – No benchmarking between work types

A Flexible Workforce Program may help mitigate the above, but how do you know when you need to put a program in place? Below are some questions that may help your business to assess the need:

  • How much Flexible Workforce do you have within your business?
  • Who are they? Have they been screened prior to coming on site?
  • Where are they? Who are they working for?
  • What are they doing? Are they touching the customer or Critical Organisation systems?
  • What are the local legislation, tax and statutory risks exposure? 
  • Do you think you have any business exposure?

If in doubt, don’t forget the cost of preventing mistakes is generally much less than the cost of correcting.

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