Workforce compliance is not always viewed as a critical driver for businesses seeking to grow productivity. Sometimes, it can even have negative connotations. Too much bureaucracy limiting decision-making, an abundance of red tape restricting innovation. From a strategic perspective, compliance can all too easily seem like a barrier that organisations need to get around.
That’s a perspective that needs to change and here’s why:
The hidden workforce is increasingly vital
The future workforce will be a blended workforce, comprising permanent hires, contingent workers and automation. Most organisations predict that their contingent workforce will grow, enabling them to scale resources up and down to meet the changing demands of an uncertain market. Without the agility, expertise and flexible resource that their contingent workers provide, board-level strategy and decisions are harder to implement and organisations will find it harder to respond quickly to new opportunities. As this workforce becomes increasingly important to business strategy, so does the need for effective workforce compliance and oversight.
Lack of compliance creates new organisational risks
Contingent workers are off-payroll and often under the HR radar. This creates a subset of workers who lack transparency around rates of pay, contractual status, tax obligations and right-to-work. For organisations that are scaling their contingent workforce, lack of visibility creates risks that can result in severe fines, negative impact on service levels and significant reputational damage. These risks extend beyond day-to-day workforce management and affect the wider business. Good governance is critical, before minor compliance issues become major boardroom discussion points.
The cost implications are hard to ignore
Compliance may not be a key topic at board-level but the cost implications are hard to ignore. Partnering with a Managed Service Provider not only ensures compliance and good governance. It should also produce cost-savings of 12-15% when compared to unmanaged talent supply chains. As the contingent workforce grows globally, and more organisations are increasing their spend in this agile area of resource, they need to increase their capability to drive down costs. For boards, this means workforce compliance is not simply about avoiding penalties. It is also about having the visibility and control needed to manage workforce spend effectively.
Turning compliance into a strategic priority
As workforce complexity continues to increase, organisations need greater visibility and control over their contingent workforce. MSPs bring structure to workforce management by improving supplier oversight, standardising processes and providing the insights needed to identify risks and make informed decisions.
Just as importantly, they can demonstrate how an effective commitment to compliance and good governance directly impacts on cost, workforce planning and business growth. When compliance is connected to these wider business priorities, it becomes clear why it should be treated as a board-level priority, rather than simply an operational responsibility.
If you’d like to learn more about strengthening workforce compliance across your organisation, get in touch with us.