Shared Responsibility Gap Found in Enterprise Contingent Workforce Management

A new global study from People2.0 reveals that one in four enterprise organizations lack full alignment between Human Resources (HR) and Procurement when making contingent workforce decisions. This fragmented approach could undermine efforts to build more agile and cost-effective workforces, according to the research of 700 senior HR and Procurement decision-makers across the US, Canada, UK, Netherlands, Australia, and India.

The study found that over a quarter (25%) of organizations describe the relationship between HR and Procurement as only somewhat aligned or worse. Over a third (39%) of respondents identify internal alignment as a major challenge in managing their contingent workforce. Responsibility for managing contingent workers is increasingly spread across different departments, but teams are not always working together effectively.

Workforce Procurement, Talent Acquisition, and HR now have the greatest influence over contingent workforce decisions, with between 55% and 58% of respondents rating each function as having a high or primary role in decision-making. However, there is no clear consensus over who should take the lead. Just 17% identify Workforce Procurement as the primary decision-maker, with the same proportion citing Talent Acquisition. HR also plays a significant role, with 16% pointing to it as the lead function. Finance and Legal also contribute, adding further complexity to how contingent workforce programs are managed.

Bringing more departments into workforce decisions should encourage collaboration, but different priorities can make that difficult. HR and Talent Acquisition tend to focus on people, skills, and workforce experience, while Procurement is more concerned with costs, contracts, and supplier relationships. Unless responsibilities are clearly defined, teams can end up working towards different goals.

This can create problems well beyond the departments involved. Inconsistent onboarding, gaps in worker classification and compliance, and limited visibility over workforce costs and performance can all result from a lack of coordination. And as contingent workers make up a larger share of the workforce, these issues become increasingly difficult to manage.

Three-quarters (75%) of respondents say contractors, freelancers, and temporary workers account for at least 11% of their workforce, while 43% report that contingent workers represent more than 20%.

The research also reveals differences in workforce governance across international markets. Organizations in India report the highest levels of collaboration between HR, Procurement, and Talent Acquisition, alongside the strongest alignment between HR and Procurement among the six countries surveyed. While approaches vary between countries, the challenge for enterprises is much the same: making sure everyone involved in workforce decisions is working towards the same goals.

The State of Contingent Workforce Management Report, Enterprise Edition, is available to download via the People2.0 website. The study focused on senior business decision-makers working within enterprise organizations (500+ employees and annual revenues of $100M+) across six key markets: the USA, Canada, the UK, the Netherlands, Australia, and India. The sample was weighted towards North America (USA: 200 respondents; Canada: 100 respondents), with 100 respondents surveyed in each of the remaining markets, providing a total sample of 700. At a 95% confidence level, this delivered an overall margin of error of approximately ±3.7%, making the findings robust for identifying global market trends and comparing the perspectives of HR and Procurement professionals.

People2.0 is a global provider of workforce compliance and payroll services for enterprises and talent suppliers, including staffing firms, search and recruiting firms, mass talent entities, and professional services firms. People2.0 helps these businesses navigate employment, labour, and tax regulations across the world.