The U.S. Bureau of Labor Statistics’ recently released Job Openings and Labor Turnover Summary revealed U.S. job vacancies fell only slightly by 427,000 to 11.3 million at the end of May. Over the rolling 12-month period ending in May, hires totaled 78.4 million and separations totaled 72.0 million, producing a net employment gain of 6.4 million jobs.
As the labor statistics show, the pandemic, supply chain disruption and labor shortages have changed the way we work forever.
“During the past few years, unprecedented global disruption has created seismic shifts in how we work, where we work and with whom we do business,” says Vish Baliga, CTO at SAP Fieldglass.
These changes are examined in a new SAP study conducted by Harvard Business Review. One of the ways companies are addressing the labor shortage is by increasing their reliance on external labor or contingent workers.
“In this turbulent environment, finding and retaining the best workers and best service providers has become more difficult — and more crucial — than ever before,” Baliga says. Evolving skill set requirements combined with a shortage of knowledgeable workers complicate the picture further, creating what he calls a “talent crunch” that companies must navigate carefully to resolve.
“Companies that can quickly staff projects with qualified employees or outsourced labor are far better positioned to drive strategic transformation and gaincompetitive advantage than those lacking such resources,” he notes.
Faced with the need to either upskill existing workers or find new people with the right abilities, a substantial number of organizations are tapping into non–payroll labor to get jobs done, making the external workforce increasingly pivotal to business success, says Baliga.
“Managed service providers, staffing agencies and similar suppliers play a central role here in providing access to the flexible labor companies require to meet delivery and growth targets.”
But Baliga argues that gaining access to workers is just the first step. Digital solutions have long been used to boost efficiency and savings in other areas of the business, and their value is equally key in enhancing external workforce outcomes. These technologies can deliver the end-to-end data, visibility and control companies need to meet their desired goals.
Ilaina Jonas, Senior Director of Global Public Relations, SAP
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