Managing a situation where an increasing percentage of any company's workforce is composed of external, contingent workers is a challenge that many companies are already dealing with. While many more will have to figure this out pretty soon too, as they move to a more flexible labour model with the advent of the "gig economy".

How to mange this digitally, to both ensure compliant onboarding of consultancies, contractors and freelancers, as well as streamlining the administrative hassle associated with this? Tobi Schmidt and Igor Putrenko from external workforce management platform Eqip are my guests to discuss this.

Managing this process using dozens of different recruitment agencies, or even using individual interim managers directly, isn't realistically an efficient strategy that larger businesses can manage at scale. So, there's a recognised need to manage this more effectively.

What is already out there in terms of existing technology?

Enterprise Resource Planning tools (ERPs) such as SAP and Oracle tend to be used more for matters relating to the internal workforce. Payroll, salary info, taxes, deductions, compliance requirements and so on.

Vendor Management Systems as Igor calls them, or VMS for short, have systems and records for all external providers of services. Examples here in the more traditional enterprise software space are SAP Fieldglass, AgileOne and Beeline. Cost and lack of intuitiveness when it comes to ease of use are cited as being pitfalls of these platforms.

Whereas on the other end of the spectrum, platforms such as Upwork and Fiverr are the go-to websites for managing more traditional freelancer and small agency relationships. These are popular in the tech startup and lifestyle business space, but would not be considered as rigorous when ti comes to the needs of larger businesses with compliance and due diligence requirements.

How does Eqip differentiate their offering?

Eqip is a B2B marketplace which incorporates proper screening process, and also caters to more niche, white collar consultancy or expert professions. This is essentially the differentiation between them and more generic freelancer marketplaces.

In terms of the legacy enterprise software, they attempt to also provide this in one platform but in a more agile way, enabling a faster onboarding process for vendors.

Hard-to-find skills, such as cybersecurity experts, can be very tough to find through traditional recruitment agencies. The existing enterprise software doesn't really provide the tech to enable cross-border talent scouting and a solution to compliantly onboard them.

Eqip saw a gap in the market to fix this, by enabling Swiss companies originally to recruit hard-to-find contractors and consultants from a talent pool in Central and Eastern Europe. Furthermore, it also enables them to manage these workers if they are performing the work remotely from their home countries rather than actually needing to be on site at the client.

What are the emerging trends in this market?

On the one hand, companies struggle to find workers in their own country and simultaneously are becoming more comfortable with remote work. This is leading to more geo-arbitrage when it comes to recruitment, especially in the contingent workforce.

Whereas on the other hand, Eqip is also seeing an increasing demand on the platform for more "operational" consulting requirements from companies who would typically perform the work on site.

Igor also mentions the increasing erosion of the "job for life" concept and a move towards a larger percentage of a company's total workforce being contingent rather than permanent, salaried employees.

Is HR the key stakeholder, and how open are they to change?

While HR teams are a cog in the wheel, Tobi and Igor actually say that their sales and business development strategy is usually focusing on Procurement and Finance in terms of primary outreach.

From their experience, it seems to be a pretty joined up approach insofar as HR and the end user seem to understand the need to adapt and change and consider different ways of working.

They also make the point that regardless of whether onboarding a contingent worker or a permanent employee, the roll of HR would be similar in both instances. Using an external platform to manage contingent workers can also be a boon for HR if they realise that this will be a necessity, as the shift continues towards be a larger percentage of the workforce being freelancers and contractors.

How does Eqip manage payroll and tax requirements for so many different jurisdictions?

Eqip doesn't process this through the platform, but the technology enables for the the correct vetting to take place.

The onboarding process in their system for each consultancy, freelancer or contractor ensures that these checks and requirements have been peformed.

The system can act as a single source of truth for this for audit purposes.

Which types of businesses is the platform ideal for?

Tobi mentions that startups and SMEs are using the platform too, alongside enterprise clients. They have a "lite" version that enables the solution to be affordable for smaller businesses too.

However, their main focus in terms of the full stack product is enterprise. By offering a comprehensive platform of a marketplace and the integrated software to manage the onboarding and compliance, they see this as something larger corporates would value as an all-in-one platform to challenge some of the legacy technology in this space.

Having a single vendor to issue invoices, as an integrator type model, also enables efficiencies for the client in terms of a reduction in vendor count and invoice volume and complexity.

What is their monetisation model?

It's volume driven in terms of the level of fees. There is either a percentage or a flat fee that is taken from the amount that is paid by the client to the contractor. Contingent workers are not charged a sign-up fee or ongoing membership / subscription cost.

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