YunoJuno's Contingent Labour Health Check reveals core business challenge
Last September, YunoJuno developed a Contingent Labour Health Check tool to help those working with contractors and freelancers better understand the shape of their spend, benchmark their programmes and identify issues and opportunities.
When we analysed the data collated from respondents over the past 6 months, our findings were really interesting...
Lack of controls for visibility
• There is a consistently low level of understanding of how many contractors are engaged at any one time
• More respondents were not aware of their total contingent labour spend
• However once spend had been identified, the revenue line became something procurement departments saw as a potential lever for value and efficiency
Operational understanding is low
• There is a low level of visibility across key operational areas like how many stakeholders are involved in the hiring of a contingent workforce
• Time to hire varies considerably across our Business Health Check respondents with submissions ranging between 2-5 days and 1-3 weeks
• Ownership of a Contingent Workforce Programme is unclear, raising questions like where does this sit? With procurement? HR? Or across both?
Global compliance confidence a grey area
All respondents have a UK compliance process, and while the majority are confident that they avoid misclassification, 20% lack confidence with Global Compliance - adding increased pressure to businesses to ensure they are protected by tax implications, labour laws, and any specific regulations that may affect remote work arrangements.
Our findings also discovered there was a significant lack of visibility of whether, and how, compliance checks for workers outside of the UK are carried out.
To ensure a fair and compliant working relationship, a trusted partner is required to tailor contracts to align with local laws and regulations, including payment terms, working hours, and any other relevant clauses to help mitigate legal risks.
Our conclusion is that visibility is key
Without clear visibility clients are unable to embark on ensuring compliance, building simpler process and providing business value in the area of contingent labour. This is an underpinning requirement when assessing the prevalence and magnitude of issues like IR35 and equivalent compliance, and when benchmarking rates and departmental spend. This means that risk could be inherent, with efficiency and effectiveness likely to be below par.
Visibility enables clients to identify opportunities that could drive compliance, efficiency and value. It allows the organisation to know how many stakeholders are involved, how long it takes to hire and finally to identify ways of improving the process. Knowing how much is spent, by whom and on what types of talent allows you to start a journey towards savings and business value.
How YunoJuno can help
YunoJuno provides clients with total visibility of all critical Contingent Labour dimensions, and is enabling greater compliance, more efficiency and enhanced value.
If you are keen to understand more about your levels of visibility on Contingent Labour in your organisation, YunoJuno offers a free diagnosis of your current Contingent Workforce Management programme, where we can help you streamline processes, identify risks, optimise and save costs.
Complete our online Contingent Labour Business Health Check and let YunoJuno help you benchmark your programme.
| Old rule (2021 Independent Contractor Rule) | New Rule (Effective March 11, 2024) | |
|---|---|---|
| Basis of classification | Relied on a simpler, more straightforward approach that may not fully capture the complexity of modern work relationships. | Restores a multifactor "economic reality" test that considers a wider range of factors to determine employment status. |
| Legal consistency | Criticised for deviating from established legal precedent and potentially leading to more misclassifications. | Aims to align closely with longstanding legal precedent, offering more clarity and consistency in classification decisions. |
| Impact on workers | Concerns were raised that it might make it easier to classify workers as independent contractors, potentially denying them employment benefits. | Seeks to reduce the risk of misclassification, ensuring workers who should be classified as employees receive the benefits and protections that they're entitled to receive. |
| Guidance for employers | Provide a simpler framework for employers to classify workers, which could lead to broader interpretations and confusion. | Offers detailed guidance through the economic reality test, aiming to provide a clearer path for proper classification and reduce misclassifications. |
