How Companies Can Become More Data Driven With A Workforce Management System
The move to using data as a key decision-making tool is not a new trend. Executives and business leaders alike are realizing the gains of being a data-led organization. Financially, data-driven companies outperform competitors and, according to a report by The Economist’s Intelligence Unit (EIU), 60% of professionals said that data is generating revenue within their organizations and 83% said it is making existing services and products more profitable.
Many businesses use data for marketing and sales departments, measuring campaign success and failure. The data-driven mentality, however, can be applied internally to talent and workforce decisions as well. To leverage data to improve in this area — companies need access to data or proper data collection and an easy way to analyze the collected data. Both of these needs can be addressed with a freelancer management system (FMS).
FMS software, on a basic level, helps companies manage full-time and external workers, from scouting talent to on-boarding to managing and invoicing/payments. FMS platforms also provide business metrics, such as how long it takes to find and on board a new freelancer, how long it takes a freelancer to complete a certain project, or how often a contractor has been used for a specific client project. Depending on the software, companies may have access to performance reviews and feedback as well.
So how can a freelancer management system make a company more data-driven?
- Reward top talent and review poor performers. Companies who give employees regular feedback have turnover rates that are 14.9% lower than for employees who receive no feedback.
- Discover rate competitiveness and skill sets. There are 53 million people doing freelance work in the US, showing the need for organization.
- Identify financial drains. At the average company, 60% of contingent labor is unaccounted for when it comes to financial planning, budgeting, and forecasting.
- Scale Quickly. Companies whose growth was greater than 60% when they reached $100 million in revenues — were 8x more likely to reach $1 billion in revenues than those growing less than 20%.
Proper FMS software will provide data in an easy-to-view format, allowing companies to analyze key takeaways quickly and make more rapid, more informed decisions. For businesses that manage a large external workforce, the following are vital data-based decisions that can be made with a FMS.
Reward Top Talent & Review Poor Performers
Executives can easily discover who is the top or rising star in the organization’s talent network, based on reviews and feedback. This is important when it comes to agreeing on rates, giving bonuses, awarding new projects, or when considering taking on a new person full-time. Instead of having to ask a number of managers who to recommend, all data, including reviews, is aggregated into one place.
Companies can also give lower rankings or even blacklist freelancers or contractors that do not perform well. Businesses can then avoid the costly mistake of hiring a poor performer multiple times — a costly but common mistake.
Rate Competitiveness & Skillsets
Companies can use FMS software to analyze the rates of freelancers based on skillsets and geographic location. This will ensure businesses receive a competitive rate when hiring a freelancer without having to run numerous levels of competitive bidding — driving down morale within the talent network. Additionally, companies can quickly find the unique skillset they need as FMS platforms can quickly identify freelancers that can complete projects that might need technical or uncommon skills.
Identify Financial Drains
Freelancer earnings in 2016 amounted to roughly $1 trillion, according to Upwork’s Freelancing in America 2016 report. What’s interesting is that in the average company, 60% of contingent labor is unaccounted for when it comes to financial planning, budgeting, and forecasting. As companies rely on freelance work more and more, this type of work should be included in financial forecasting and budgeting talks.
A FMS can help companies identify how much they spend on freelance work, breaking costs down by department or time period. This information can then be used for budgeting and accurately forecasting how much to allocate for contingent work in the coming year. This data can also identify which departments need a full-time person and which should continue to rely on freelancers.
Find a Fast Worker & Scale Quickly
Projects need a quick response and turnaround time. Using a FMS, businesses can see which workers respond quickly and take a proactive approach and which have quick turnaround times on projects. Instead of having to ask many freelancers if they can complete a project, organizations will know which freelancers have availability and can complete the work under the tight deadline.
Companies can scale their workforce up or down based on demand, capitalize on cost efficiencies and leverage freelancers with skills the organization may be lacking.
Using data over ‘gut instinct’ provides stronger support for executives making tough choices that impact the bottom line. When data is collected through a FMS system and analyzed properly, businesses can improve productivity and make better decisions. To learn more about what freelancer management software can do for your company, contact us today.