Europe Highlights - External Workforce Insights 2018: The Forces Reshaping How Work Gets Done

© 2018 SAP SE or an SAP affiliate company. All rights reserved. 1
Research in collaboration with
Global results with
highlights from Europe

Focus your forces
The rapid growth of the external workforce—the use of non-payroll
workers and contracted services providers to get work done—is
one of the most important business stories of our time with far
reaching implications for both employers and employees.

44%of workforce spend is on
the external workforce

Those who manage external
labour effectively find it to be a
driver of competitive advantage
and those who don’t risk being
left behind.
Our research provides an unprecedented deep
dive into the ways the external workforce is
sourced, managed, and deployed, and how it
can pay off for a business.

We identified four key forces transforming
how work gets done.
The multi-channel
workforce is on
the rise
It’s about
the core
Cost is not the
whole story
Visibility is
everything

Generate
momentum
6
Force One
The multi-channel
workforce is on
the rise

Companies are using the multi-channel
workforce to get work done.

All channels for sourcing external workers show
growth in 3 years. A standout: the digital channel.
Growth of the use of on-demand, online marketplaces for freelancers
Today In 3 years
35%
Global
38% 74% 50% 83% 47% 90% 55% 90% 45% 61% 40% 67% 27% 50% 57% 87% 23% 61%
Belgium France Germany Italy Netherlands Nordics Spain UK

Only 19% of executives on average, globally, stated
that they strongly agree that their organisation has a
talent strategy that encompasses employees and
the external workforce despite the latter comprising
nearly half of their workforce spend.
Talent strategy is increasingly dependent upon
sourcing strategy.

Our organisation has a talent strategy that
encompasses employees and the external
workforce.
35%
Global
19% 20% 13% 19% 13% 27% 20% 20% 16%
“Strongly agree” responses

© 2018 SAP SE or an SAP affiliate company. All rights reserved. 11© 2018 SAP SE or an SAP affiliate company. All rights reserved.
Ensure
critical
mass
11
Force Two
It’s about the core

We would be unable to conduct business as usual without an external workforce.
The external workforce has become essential to
core operations. It provides a rich well of talent
and is increasingly critical to business strategy.
“Agree” and “Strongly agree” responses
35%
Global
46% 37% 33% 45% 39% 67% 53% 43% 45%

Today In 3 years
35%
Global
73% 91% 70% 87% 83% 97% 77% 87% 81% 94% 73% 97% 63% 83% 80% 93% 68% 87%
“Important”’ and “Extremely important” responses
The importance of external workers in sourcing skills that are in scarce supply:
Digital skills and other specialised capabilities can
make or break a business so meeting the demand
for talent is essential.

Challenges in accessing
specialised skills such as AI and
machine learning, data science
and industry-specific expertise
is the #1 market trend for the
fastest-growing companies.

Accelerate
value
15
Force Three
Cost is not the
whole story

Controlling costs is no longer
the principal driver for using
an external workforce.

While cost is still an important factor, the external
workforce is now seen as essential to improving
business performance.
“Important” and “Extremely important” responses – global results
How important is the external workforce in meeting the following business goals?
68%
66%
65%
64%
62%
60%
54%
Developing or improving products and services
Increasing speed to market
Operating at full capacity/meeting market demands
Increasing organisational agility
Achieving sustainability goals/shrinking our carbon footprint
Managing costs
Reducing risk

“Important” and “Extremely important” responses
How important is the external workforce in
developing or improving products and
services?
35%
Global
68% 67% 83% 77% 77% 57% 63% 63% 61%

How important is the external workforce
to increasing speed to market?
35%
Global
66% 63% 70% 77% 74% 50% 57% 57% 68%

How important is the external workforce
to managing costs?
35%
Global
60% 63% 57% 74% 65% 50% 57% 60% 77%

“Agree”’ and “Strongly agree” responses
Our external workforce enables us to
improve our overall financial performance.
35%
Global
62% 63% 33% 55% 71% 77% 57% 63% 55%

© 2018 SAP SE or an SAP affiliate company. All rights reserved. 22© 2018 SAP SE or an SAP affiliate company. All rights reserved.
Expand your
line of sight
22
Force Four
Visibility is
everything

A fundamental truth of business is that
you can’t manage what you don’t
measure, so these new work
arrangements require a new kind of
management.
The lack of visibility into the external
workforce is a serious problem for most
companies.

Learn from the
Pacesetters who are
leading the pack.
Around one in ten companies that responded to our survey
demonstrate markedly superior performance in managing
and extracting value from the external workforce.

Pacesetters are charting the way forward for
others in this still evolving field.
They stand out in three important ways:
Visibility into the
external workforce
Effective
management of the
external workforce
Business impact
of these workers

Pacesetters are much more informed on details regarding
their non-payroll workers and services providers and are more
likely to say that their C-level executives are informed as well.
Visibility: Pacesetter
executives are more in
the know.

How informed are you personally about the
following details of your non-payroll workers?
“Highly informed" responses – global results
Pacesetters Non-Pacesetters
Responsibilities Labour rates Compliance with
negotiated rates
Quality of work
83% 43% 81% 46% 71% 44% 61% 43%
Access to
systems and
confidential info
55% 33%
Who they are
43% 34%

How informed are you personally about the
following details of services providers doing
work for your organisation?
Responsibilities Who is doing
the work
Duration of
work
Quality of work
84% 49% 82% 43% 75% 46% 60% 40%
Access to
systems and
confidential info
52% 42%
“Highly informed" responses – global results

Effective management:
Pacesetters show how much
other companies could benefit
from more effective management.
Pacesetters find it much less challenging to perform a
wide range of external workforce management duties
more effectively.

How challenging are the following aspects of
managing your external workforce?
“Really” and ”Extremely challenging" responses – global results
Managing digital/
cyber security
Tracking resource
and project quality
51% 61%40% 61%
Compliance with
local tax laws, labour
laws, regulatory, etc.
42% 57%
Inconsistencies in
talent or project
quality
29% 59%
Finding high-
quality resources
at the right rate
43% 54%

Business impact:
Pacesetters stand out when
it comes to realising value
beyond cost control.
Pacesetters reap more business value from their
external workforce.

Our external workforce enables us to improve our
company’s overall financial/business performance
and/or helps us compete in a digital world.
“Agree” and “Strongly agree” responses – global results
Our external workforce
enables us to improve
our company’s overall
financial performance
Our external workforce
helps us compete in a
digital world
Our external workforce is
a key lever in enabling our
business performance
88% 59% 79% 52% 58% 46%

The external workforce
provides benefits beyond
hard numbers.
Many executives say the external workforce makes a
positive impact on overall workforce performance and
the culture of their organisation.

The external workforce challenges our
employees to do their best work.
“Agree” and ”Strongly agree" responses
35%
Global
61% 67% 53% 61% 74% 60% 63% 47% 48%

The external workforce raises the bar for our
employees by bringing in new sources of
skills and talent.
35%
Global
54% 27% 37% 45% 52% 73% 63% 40% 71%

The external workforce improves our culture
by bringing in new people with different
backgrounds and experiences.
35%
Global
54% 47% 40% 42% 45% 43% 63% 37% 42%

The external workforce should
be a C-suite imperative, given
its size and that it enables such
an impressive range of
business outcomes.
The external workforce: is it on your
C-suite agenda?
Companies should increase
their visibility into the external
workforce—and the total
workforce—to better thrive in
a digital world.
These vital assets are
critically undermanaged.
Shouldn’t the same rigour
you use to manage your
employees be applied to
your contingent workers and
services providers?

Take action today.
Capture the full value of the workforce transformation by managing your
external workforce more effectively.
 Ensure your leadership has visibility into the scope, activities and quality of your external workforce,
the challenges at hand, the benefits realised—and those that could be realised.
 Know the true value of your external workforce, whether they are most critical to getting products to
market faster, providing difficult-to-access skills, driving digital transformation efforts, or controlling
costs.
 Anticipate the skills you will need in the future—and those in short supply. Determine a strategy to
acquire, retrain, or source these skills through the external multi-channel workforce.
 Apply workforce strategies to all labour sources, both external and traditional. Embrace the external
workforce for the skills and ideas that this talent brings and make them a part of organisational
objectives and purpose.

Oxford Economics conducted an in-depth telephone
survey with 800 senior executives from mid-sized to
large companies in 16 industries and 14 countries plus
the Nordic region of Europe in late 2017 and early 2018.
The survey focused on labour trends, including the use
and management of an external workforce, today and in
the future, and its impact on business and financial
performance.
Get our full report at
externalworkforce.fieldglass.com/Europe
to learn more about Pacesetters and key
forces driving how work gets done.
About our research

Europe Highlights - External Workforce Insights 2018: The Forces Reshaping How Work Gets Done

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