Study finds 21 percent of fortune 500 companies cannot estimate annual spend on contract labour

Taleo, the company in global on demand talent management solutions, today released a research report that analyses the contractual workforce management trends of a cross-section of the Fortune 500. Findings of this study indicate that contractual workforce management remains an increasingly complex and unmonitored area of expense throughout large organisations. ìThe Contingent Workforce Management Trend Reportî was compiled and released by Taleo Research, the research division of Taleo.

The Taleo Research study reveals that many organisations could not answer critical questions about the use and impact of contractual labour on their organisations. According to Taleo Research, large enterprises are spending an average of seven percent of overall company revenue on contractual labour, typically representing hundreds of millions of dollars. The findings indicate that major opportunities exist for organisations looking to achieve greater returns on contractual labour by leveraging centralised contractual workforce management technology.

Overall, the report concludes that contractual workforce management practices vary greatly throughout organisations. A number of common themes were also evident in the report, including the fact that the contractual workforce can be extremely problematic and expensive if not managed properly.

Other key report findings of the survey respondents include:

ï 92 percent cite inconsistent costs and a lack of price control a primary ìpain pointî with their current contractual labour workforce.

ï 69 percent are highly concerned about their organisationís compliance with industry regulations such as Sarbanes-Oxley, SEC, FDIC, etc.

ï 66 percent are highly concerned about employee misclassification and co-employment risk.

ï 50 percent do not know if their company has ever defended itself against a lawsuit associated with contractual labour.

ï 33 percent could not report which, if any, department holds primary responsibility for minimising their companyís risk and liability as it relates to contractual workforce management.

ï 21 percent could not estimate their companyís current annual spending for contractual labour in the U.S.

ï 18 percent could not estimate the number of suppliers currently providing contractual labour to their company.

Companies in the survey who had implemented a contractual and temporary workforce management solution cited reasons including cost/bill rate reduction (32%), visibility and process control (31%) and risk reduction (21%) as key catalysts in their decision to automate the process. In fact, earlier studies conducted this year by Taleo Research have shown annual savings of more than 20 percent enterprise-wide, through the use of a comprehensive contractual workforce management program, underpinned by technology solutions.

According to Taleo Research Founder and President Yves Lermusiaux, ìThe findings in this report are further proof that significant opportunities exist for organisations to gain control of contractual labour throughout the enterprise. The impact of improved contingent workforce management can be substantial when supported by comprehensive technology solutions that provide control and visibility into the process.î

He continued, ìNow, more than ever in an area where Sarbanes-Oxley reigns, it is critical that responsible companies establish comprehensive, well-designed, contractual workforce management strategies.î
A complete copy of the report can be downloaded at: