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MSP MSP Relocation Risky Business Take control of your contingent labor by following a few steps. By Eric S. Williams Global companies are relying more heavily on contingent labor to control difficult time tracking third-party labor through a single 'choke-point,' and rising labor costs, bridge skills gaps in key geographic areas and high-value unwittingly take on high levels of compliance-related risk. A company that disciplines, and respond to fast-moving market conditions with greater misclassifies workers may be subject to audits and penalties, which vary agility reports the new study from KellyOCG, Contingent Labor: What country by country. There appears to be growing interest in the United C-Level Executives Should Know. According to the 2012 Aberdeen Group States—based on a proposed bill amending the Fair Labor Standards as well survey, the average company's workforce is 26 percent contingent. Experts as newly published rules on worker classification—to further regulate this even speculate that for some global companies, the contingent workforce area. may represent a higher percent of the total workforce than traditional employees. Access and security. Many companies impose less stringent security standards on contingent labor than on employed labor without considering Yet as companies expand their dependence on outsourcing and third-party the consequences. A 2011 survey by HireRight found only 48 percent of labor, organizational limitations come into plain view: internal processes companies that use contingent labor conduct background checks on those and systems are typically not adequate to manage the inherent risks of a workers. It also revealed that only twenty-two percent conducted drug contingent labor force, not to mention extract maximum value from this testing, and seven percent maintained ongoing drug testing. critical resource. Visibility and analytics. Many companies cannot assess the amount of thirdThere are several common and consequential problems: party labor supporting their company, where those individuals are located Regulatory and compliance risk. Use of contingent labor exposes companies (geographically and by job category), and what company information they to serious legal and regulatory risks. Multinational organizations have a can access. APRIL 2013 | www.hrotoday.com [27]