Will HRIS vendors add tracking contingent workers to their products allowing companies to track their entire workforce (employees + temps + freelancers)?

This was a question from Tracey Smith on LinkedIn in response to my post "Do Gigs Requires More Than an Annual Checkup". According to Andrew Karpie @ "Spend Matters", some CHROs are waking up to the need for an integrated VMS to capture all costs associated with labor spend. Enterprise SaaS providers like SAP are either acquiring VMS providers like FieldGlass or trying to tweak HRIS tools they already have to meet such needs. Some recent VMS tech startups which have not yet been acquired have seen an escalation of mergers within that market sector making it difficult to know which are a viable program and will survive the consolidation. 

Because the economy has grown more quickly since President Trump took office and recruiting methods are many and more successful, many CHROs are still holding out to find the needle in the haystack for an exact match of talent companies require. Specific skills and talent hard to find before Trump assumed the Oval Office are even scarcer now. According to the 2018 8th Annual Study of the Independent Workforce in the U.S., sponsored by MBO Partners, "With the unemployment rate at just 4 percent and 6.7 million open jobs, a range of industries,from railroads to fast food, from software to nursing, are reporting shortages of workers and great difficulty hiring for full-time positions. The ratio of unemployed people per job openings, which stood at 6.6:1 in 2009, is roughly 1:1". In many sectors . . "and disciplines, skills shortages have emerged, giving highly-skilled independent professionals negotiating power to engage with clients, customers, and corporations—in the U.S. and abroad—on their own terms."

Despite the upside for employment and the return of those "reluctant" independent workers, those who were full-time independents but preferred to be working at traditional jobs—has fallen from 34 percent of the population to 24 percent in 2017 and 22 percent in 2018. Even for those who enjoy independent work, the strong labor market demand may present appealing benefits and opportunities in traditional full-time employment. So HRIS decisions about data capture for temps, freelancers, and independents are now driven by:

1. Does the size (number of persons) of the contingent workforce, warrant the cost of development, purchase, and integration of a mature VMS?
2. Assuming the economy will continue its upward trend, will the percentage of contingent workers a company needs increase or decrease? Will our needs swing with changes in the economy? If yes, by what range of headcount or skills required?
3. What are the expectations of HR to actually use the contingent workforce data, if collected, to better analyze and manage their workforce?
4. Does HR have the skill sets in data analysis necessary to drive better workforce solutions?   
   

Meanwhile, full-time independent workers, persons who work 15 hours or more a week as independents, dipped slightly in 2018 for the third consecutive year. But the decline was small—from 16.2 million to 15.8 million (about 2.5%). Our U.S. Economy added 17 million payroll jobs between 2011 and 2018, the number of full-time Independents fell by just 200,000, according to MBO survey data.

As you know, there are a few great examples of firms who have recognized the importance of capturing contingent workforce data and are doing so. However, a fewer number of those have the internal analytical skills experienced in crunching the numbers consistently to deliver meaningful conclusions for executive management to successfully act upon. When the economy is good, active decision making regarding quality utilization/integration of non-employees for improved results in costs per person, revenue per person, and other important metrics move down or off the priority list.

This and other factors will delay acceptance of the independent worker market and value. Thus, impacting the perceived need for measurement tool like VMS to be acquired, integrated and made available for analytical use.

The Gig Doctor