The Chief Financial Officer (CFO) of the typical organization is now tasked with more than ever before, often asked to be the “savior” of enterprises that struggle to maintain a clear picture into total cash and corporate finances. Payables Place is pleased to present a series that highlights the “CFO’s view” of various functions and categories within the contemporary enterprise. Today’s article: the CFO’s perception (and ultimate involvement) in the management of contingent labor.
The world of contingent workforce management is growing in stature, size, and strategic corporate importance. The very notion of “non-traditional talent” is one that actively forces the modern enterprise to place more emphasis on how they control, manage, and utilize this talent, especially considering its expected growth (30% increase in utilization over the next few years). In the midst of this strategic expansion in the world of non-traditional talent, there is often a question of responsibility for operations, processes, and capabilities. And, typically, the burden falls on either procurement, human resources (HR), or both.
However, what’s often understated is how the CFO and the finance function fits into all of this. What’s his / her role? What can finance add from a value perspective? How can contingent workforce management evolve into something “more” from the CFO’s involvement?
- Visibility is the key for finance in regards to CWM. There’s no more obvious aspect to finance’s involvement or impact in contingent workforce management than “visibility.” Nowadays, most contingent workforce programs “touch” realms beyond procurement and HR, often aligning with IT, treasury, supply chain management, and, of course, finance. Visibility is key in understanding the greater ramifications of contract talent, and finances play a critical role in that level of visibility. The CFO is often the leader of visibility enhancement efforts, and it’s imperative that this role be involved in CWM from an intelligence perspective.
- A link between cash and talent. The “talent” here can take many forms, from freelancers to independent contractors to traditional temporary labor. In any case, most forms of non-traditional talent are tied to enterprise projects due to the specialized skillsets required by these initiatives. Milestones, delivery dates, etc., are often linked to payments, further aligned to project budgets, and this is where finance / the CFO fits into contingent workforce management. While supplier management initiatives often assist in this regard, the advent of analytics / BI software can help paint a more vivid picture of how non-traditional talent, and the projects they’re linked to, affect greater enterprise cash flow.
- A view of the future, and how contingent labor fits in. One advantageous aspect of the CFO role is the ability to plan and budget for the future based on forecasting data. By having access to contingent workforce data, such as usage, projects, suppliers, and quality / performance, the CFO and his / her team can estimate future utilization of contract talent, the funds needed for that labor, and the cost / finance ramifications of projects that will utilize contingent labor.
The modern CFO is called on to do many things that, historically, have not fallen completely under his / her purview. It’s possible to handle this surge of new duties—particularly in the realm of contingent workforce management—but only if the CFO and his / her finance team understands the need to retain visibility into those processes, ensure a linkage between cash and talent, and keep their eyes on the future.
