With unemployment in the United States still at historically low levels, businesses continue to grapple with the changing nature of the country's workforce. Many organizations want to mandate that employees return to the office but fear losing top talent. Some have shifted to fully remote work but are still figuring out how to onboard and train new employees and how to rebuild organizational cultures based on daily face-to-face contact.
Adapting to this new reality also means looking at the employer-employee relationship differently to maximize a company's investment in human capital. To understand how that relationship will change in the finance department, Katie Kuhner Hebert spoke with Ryan Doyle, CFO of Worksuite, a global freelancer management system based in Wilmington, Delaware.
The post-pandemic future of work has disrupted traditional business operations. How has this change impacted the CFO's role?
CFOs are more involved in technology purchasing decisions than ever before. After the pandemic, software spending skyrocketed as companies shifted to remote work. Waste was created as companies signed up for software-as-a-service tools that were duplicated or unused. Over the past 24 months, finance departments have worked to streamline software spending. Post-pandemic, CFOs are playing a more prominent role in supporting their teams with technology purchasing decisions.
Why is it important for CFOs and all C-suite executives to understand the benefits of establishing and growing a contingent workforce?
Executives are always looking for the best talent. In 2023, contingent workers (those who perform specific tasks on a temporary or contract basis) will make up a record 38% of the U.S. workforce. Globally, contingent workers are expected to grow by 34% in 2024 and another 25% in 2025.
The growth of contingent workers is significantly outpacing the growth of the total workforce. What does this mean? It means talent is shifting from the traditional employee/employer model to a more flexible freelancer model.
Individuals are finding there are more ways to monetize their skills. Working on a contingent basis allows them to maximize their income and have a personal life without the geographic constraints of an office. CFO offices need to provide their teams with the opportunity to embrace this new way of working. This includes incorporating freelancers into the day-to-day work and operations of the finance department.
What are the top three benefits that organizations can derive from contingent workers?
Organizations that successfully build and leverage a contingent workforce will be much better prepared for the next decade of business than those mandating a return to the office, with the former focused on delivering positive impact for their organizations.
Benefits of adopting a contingent workforce strategy include:
- Save costs. The average employee costs 25-40 percent more than the average contingent employee. Businesses can gain a competitive advantage by optimizing their cost structure with contingent workforce. Employees come with payroll taxes, benefits, and insurance, which increases the average cost per team member.
- Hire the best talentLeveraging contingent workforce expands the talent pool available to your organization. Competing for the same employees due to geography and office-based requirements drives up salary costs. For example, the average price for an engineer in Silicon Valley is significantly higher than the average price for an engineer in a second or third tier city. Is the talent significantly better? Some of the best engineers are relocating to new locations knowing they can work remotely.
- Easy to install in new areasExpanding into a new country usually requires significant investment to establish a local workforce.
What are three things that CFOs need to add to their agenda that weren't being considered pre-pandemic?
The first is to deliver or learn how to deliver training in a fully remote environment. Most CFOs receive in-person training in an office, and old training models don't work for fully remote companies. CFOs need new ways to train and engage members of their finance teams.
Second, CFOs have become technology buyers. While finance has always negotiated or helped negotiate purchases for certain vendors, today's CFOs are being asked to not only be involved in the negotiation process, but also to be involved in more purchasing decisions to streamline tools and evaluate capital allocation decisions.
The third is AI. The use and adoption of AI is not a post-pandemic response, but it is a necessity as AI is the most transformative technology of our time. All finance teams, under the guidance of the CFO, should be experimenting with AI to see how they can increase efficiency and do more with less.
