Introducing Contingent Staffing and Services Procurement

Objective

After completing this lesson, you will be able to differentiate the purpose of using Contingent versus Services procurement.

The Contingent Worker Procurement Capabilities of SAP Fieldglass

Contingent staffing is a broad term that refers to the practice of hiring workers to temporarily fulfill specific roles within an organization. These workers are not permanent employees but are engaged on a temporary basis to meet short-term needs or to provide specialized skills that may not be available within the organization. Often this classification of workers is called an external workforce, a temporary workforce, or by such terms as independent contractors, freelancers, or seasonal employees. They play a vital role in helping meet an organization’s workforce goals, and it’s crucial to optimize the value they deliver.

However, in order to better delineate functions in the SAP Fieldglass application, the term ‘Contingent’ is used a bit more strictly to define workers who are procured from a supplier using a job posting and are placed into an existing team and/or report directly to a manager within the organization. This term is used in the application to draw a distinction from the other ways a worker can be classified: as either an SOW Worker (a worker hired to perform a specific service defined by a specific contract) or a Profile Worker (a worker who is not paid by nor reports to the organization).

Watch the video to learn how the term ‘Contingent’ is used by SAP Fieldglass to define the relationship between buyer, supplier, and a worker.

Benefits of Procuring Contingent Workers Using SAP Fieldglass

As a result of using SAP Fieldglass to procure the temporary worker for the network engineering team, WorkingNet saw the following benefits:

Clear Classification of Workers: SAP Fieldglass distinguishes between different types of workers (Services, Contingent, Profile) based on their management and payment structure. This clarity helps in better workforce management and reduces confusion.
Access to specialized skills: By engaging contingent workers, organizations can tap into a pool of specialized skills that may not be available internally. This allows them to quickly fill skill gaps and meet short-term needs without the need for long-term commitments.
Flexibility and scalability: Contingent workers provide organizations with the flexibility to scale their workforce up or down based on demand. They can be easily onboarded and offboarded as needed, allowing organizations to adapt to changing business requirements.
Cost savings: Hiring contingent workers can be more cost-effective than hiring permanent employees. Organizations can avoid the costs associated with benefits, training, and overhead expenses that come with permanent employees. They can also negotiate competitive rates with suppliers, ensuring cost savings.
Enhanced productivity: By leveraging the specialized skills of contingent workers, organizations can improve productivity and efficiency. These workers can bring fresh perspectives and expertise to projects, contributing to better outcomes and faster delivery.
Reduced administrative burden: SAP Fieldglass streamlines the procurement process for contingent workers, automating tasks such as job postings, supplier selection, and contract management. This reduces the administrative burden on HR and procurement teams, allowing them to focus on strategic initiatives.

The Services Procurement Capabilities of SAP Fieldglass

Services procurement is a term used by SAP Fieldglass to refer to the practice of procuring a specific service provided by a supplier, to fulfill contractually defined projects. While it is still considered external labor, it is classified very differently from contingent labor. In order to better delineate functions in the SAP Fieldglass application, the term ‘Services’ is used specifically to define a service procured from a supplier using a contract called a Statement of Work, or SOW. These services and projects can be delivered in the form of milestones, deliverables, fixed fees, and with or without labor from tracked SOW Workers.

That said, SOW Workers—hired under SOWs—do not report directly to the organizations that contracted them, but to the organizations that were hired to perform the contracted service. The services to be performed, and the workers hired to perform them, are effectively managed by the supplier and the terms defined in the SOW.

Watch the video to learn how the term ‘Services’ defines the relationship between buyer, supplier, and a worker.

Benefits of Procuring Services Using SAP Fieldglass

As a result of using SAP Fieldglass to create the statement of work for this project, WorkingNet saw the following benefits:

Clear Classification of Workers: SAP Fieldglass distinguishes between different types of external workers (Services, Contingent, Profile) based on their management and payment structure. This clarity helps in better workforce management and reduces confusion.
Contract Management: SAP Fieldglass facilitates the creation and management of SOWs, which outline the project details, timelines, deliverables, and payment terms. This ensures both the buyer and supplier are on the same page.
Specialized expertise: Organizations can rely on external firms or vendors to provide services that are outside their core competency. This allows them to access specialized expertise and resources without having to develop them in-house.
Managed Services: By using a Statement of Work (SOW), organizations can effectively manage the services to be performed and the workers hired to perform them. The SOW sets clear expectations, timelines, deliverables, and payment terms, ensuring that the services are delivered as agreed upon.
Flexibility and scalability: Services staffing allows organizations to quickly scale up or down their workforce based on their needs. They can engage vendors to provide the required number of workers for a specific project or duration, providing flexibility in resource allocation.
Cost savings: By engaging external vendors for services, organizations can avoid the costs associated with hiring and managing a full-time workforce. They can also negotiate competitive rates with vendors, resulting in cost savings.

Summary

Contingent Staffing involves hiring temporary workers from suppliers to fill specific roles within an organization by using Job Postings. The day-to-day work of contingent Workers is managed by the Buyer.
Services Procurement refers to contracting specific services and deliverables from suppliers using a Statement of Work (SOW). If a Statement of Work includes SOW Workers, their day-to-day is managed by the supplier.

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