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SAP creates contingent employees market as COVID-19 response

SAP Fieldglass has created a marketplace for finding contingent employees. It was created in response to COVID-19, and will operate through the end of the year.

SAP Fieldglass has launched External Talent Marketplace, designed to connect businesses with staffing agencies. Some of the largest staffing firms, including ManpowerGroup Global, Randstad USA and Allegis Group, are part of it.

The talent marketplace is based on the idea that businesses will move cautiously as the economy recovers, hiring contingent employees instead of full-time employees. Fieldglass makes a platform to manage a contingent workforce.

External Talent Marketplace, which is free for both users of the platform and staffing firms, was created in response to the coronavirus.

The marketplace has a time limit. SAP's plan now is to close it at year's end, unless there is a need to continue it.

But so far, there is no massive shift to contingent hiring. ManpowerGroup, one of the world's largest staffing firms, reported on Monday second-quarter revenues of $3.7 billion, a 30% decline from the prior year period.

Jonas PrisingJonas Prising

Demand for contingent employees is picking up, but it may have been dampened by government-supported paid furloughs for employees of businesses, according to Jonas Prising, chairman and CEO of ManpowerGroup, in a call with investors.

That will change, he said. 

"As the healthcare crisis morphs into an economic crisis," the demand for staffing services will be similar to what happens in a cyclical downturn, Prising said. The furlough programs will end, and "we expect to see the increase in demand that we typically would see when you come out of a recession," he said.

Prising added that he believes the pandemic will accelerate the movement toward a more skilled workforce. 

The pandemic is prompting firms to rely on more technology, such as in remote work support, he said. "You very quickly have to shift how you do business, which also requires a different skill set," Prising explained, adding that ManpowerGroup has increased its focus on technology services.

Cost-cutting motivations

While businesses have reduced contractor budgets in response to the pandemic, Gartner estimates that 32% of organizations globally are replacing full-time employees with contingent workers to reduce costs, according to a recent survey of 4,500 managers worldwide. Gartner doesn't have a comparative pre-coronavirus percentage that looks specifically at the use of contingent employees for cost reduction.

Emily Rose McRae, a director in the Gartner HR practice, said some firms that were initially planning to hire full-time workers before the coronavirus pandemic are shifting to contingent and breaking work down into projects. "Not only is the time to hire a lot quicker, but they also tend to be able to get started really fast," she said.

The platform will enable hiring managers to come in and search or engage a vetted pool of candidates in a very simple way.
Arun SrinivasanGeneral Manager, SAP Fieldglass

McRae added that while she believes this pandemic-induced shift to contingent workers will be temporary, it may not be for all organizations. Some businesses may make their increased use of contingent workers permanent.

In the SAP Fieldglass market, a business can create a job posting, which will get automatically routed to the appropriate staffing firms or they can directly search the contingent worker pool uploaded by the vendors.

There is a template on the marketplace that businesses can use to help make the request more structured and precise, but customers don't have to use it, said Arun Srinivasan, general manager of SAP Fieldglass. The platform will enable hiring managers "to come in and search or engage a vetted pool of candidates in a very simple way," he said.

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