Many insurance companies have had exceptional success developing an external workforce. They’ve deployed resources ranging from contingent workers, including contractors and consultants, to services providers such as marketing agencies and facilities management companies. In doing so, these companies have boosted both agility and competitiveness.
However, insurance companies that rely on this staffing approach find that the external workforce becomes a huge part of overall spend. Often, they overlook tools to help manage this workforce.
In fact, a recent Oxford Economics study found that insurance companies now spend 40% of their workforce budget on external labor. And nearly three-quarters of companies say that these workers are important to their ability to meet market demand or operate at full capacity.
The external workforce is a key lever in enabling business performance. It is important to meet market demands, improve the customer experience, and reduce risk. With these facts in mind, it’s easy to see why managing the external workforce should be a priority.
Increase Insight into Your External Workforce
Companies often use traditional procure-to-pay systems to help streamline external workforce management. Yet many insurance companies still don’t have the insight they need to get top value from their spend.
For example, Oxford Economics found that just 34% of companies use procurement technology for contingent workforce management. Some of the respondents use this technology to manage their service providers, but only 20% were able to track and manage their engagement from statement of work to purchase order to invoicing.
Companies also lack insight into fundamental issues such as who is doing the work, the contract terms of each engagement, and the responsibilities of each worker. The challenge is that digital security breaches present risks to the organization, as external workers can take advantage of their digital access if they are not onboarded and offboarded properly.
The research highlighted several other issues that can compromise the value of the external workforce. Nearly half of respondents reported compliance issues and more than 40% reported quality issues regarding resources and projects with external workers. In addition, 44% reported unauthorized spend with contingent workers.
Standardize and Streamline External Workforce Management
What’s the best way for insurance companies to manage each external workforce engagement so that they get the value they pay for – and the best possible business results?
Advanced digital solutions for external workforce management can help.
With these solutions, managers can standardize worker onboarding and offboarding processes. They can quickly and intuitively grant access to systems and assets – and disconnect that access when a worker’s contract expires. And the technology helps ensure that workers have the right certifications. This is a great way to reduce risk.
Best-in-class solutions let you use any type of proof of service – such as timesheets, milestones, and deliverables – on a recurring due date or price-per-unit basis. This feature helps you align payment with the value provided.
You can tailor workflows based on category of service or work provided. For example, you might want to include tiered vendors in the requisition process or require approvals needed for invoicing to ensure your company’s organizational guidelines can be easily followed.
Increase Bottom-Line Business Value
Other features let you monitor supplier KPIs, such as response time, cycle time, and hire rates. With this insight, you can facilitate reviews and negotiations with suppliers.
Improving your external workforce management processes can also help you provide a better experience for candidates and workers. Intuitive workforce management solutions can make your company more attractive to younger workers who prefer to interact with you using digital technologies. They allow you to manage who is working for you, where workers are located, what they are doing, how much you are paying them, and what access they have to your systems and facilities.
What’s more, the right procurement technology can help you generate significant cost savings. Modern tools generate reports that enable immediate visibility into contingent workforce and services procurement spend. Analytics features can help you identify opportunities to further operationalize your procurement processes and create new cost efficiencies.
You’ve developed a valuable external workforce. Now, advanced technologies can help it boost your business’ bottom line.
Toni Tomic is global head of Insurance at SAP.