External workforce is an important part of day-to-day operations in many large organizations. Consultants, specialists, temporary resources, and suppliers provide flexibility, expertise, and scalability. But the larger the external workforce becomes, the more important the compliance question becomes.
In this episode of Implema Talks, Johan Söderström talks with Christina Nicolaou, who has extensive experience in sourcing, compliance, and global programs for managing external workforce. The conversation centers on a key question: why is compliance so critical when organizations engage contingent workers?
Compliance for external consultants is fundamentally about doing things the right way. In this context, it means ensuring that external resources are engaged, documented, onboarded, and managed according to the right rules, processes, and agreements.
This can involve several different types of external resources:
A key point is that not all external resources should be managed the same way. A supplier that sells a service is often managed at the supplier level. A contingent worker, on the other hand, is an individual who needs the right onboarding, the right documentation, the right agreements, the right training, and the right access.
This is exactly where many organizations run into trouble. When categories get mixed up, the risk of incorrect handling increases.
The short answer is that incorrect handling can have major consequences.
In the conversation, Christina Nicolaou highlights several risk areas. If an organization doesn’t have control over its external workforce, it can lead to legal risks, costs, reputational damage, and lack of control. It can also mean the organization doesn’t know which external individuals are actually working in the business.
This is especially important in larger companies, global organizations, and businesses operating across multiple markets. Rules can differ between countries, regions, and continents. What’s compliant in one country may not be compliant in another.
That’s why a generic process isn’t enough. The organization needs to understand which rules apply, where the resources are, and how they’re engaged.
Compliance is sometimes seen as an administrative matter—something handled in systems, reports, or audits. But when it comes to external workforce, compliance is also a business risk.
If the organization doesn’t know which external resources are engaged, it becomes difficult to comply with the law. It also becomes difficult to follow internal rules for security, procurement, onboarding, confidentiality, and information management.
Some typical risks include:
This can, in turn, lead to costs, delays, legal consequences, and reduced trust.
One of the most important takeaways from the conversation is that the organization first needs to know which external resources it has. Without visibility, you can’t establish control.
It’s not just about knowing how many consultants are in the organization. It’s also about understanding what type of engagement they have, where they work, which function they belong to, and which processes govern their assignments.
When visibility is missing, compliance becomes reactive. The organization discovers issues only after something has already gone wrong.
With the right processes, systems, and classification, compliance can instead become proactive. Then the organization can spot deviations earlier, act faster, and reduce the risk of incorrect handling.
A common challenge is that organizations treat all external workforce as suppliers. But a contingent worker is not the same as a traditional supplier.
When an organization buys a service from a supplier, much of the control happens at the supplier level. But when an individual works closely with the organization, gets access to systems, participates in internal processes, and performs work over a longer period, a different type of control is often needed.
The organization then needs to ensure that the individual:
This is especially important in organizations with many external resources, multiple markets, and complex sourcing models.
Another important aspect is that legislation and regulations differ across markets. The conversation mentions Sweden as an example, where rules related to staffing and temporary labor have been tightened in recent years.
For global organizations, this becomes even more complex. A company may have external resources in many countries, with different legal requirements and different internal processes. That places high demands on structure, transparency, and governance.
That’s why compliance for external workforce needs to be both globally aligned and locally adapted.
A structured compliance approach delivers several benefits. The most obvious is reduced risk—but the value goes beyond that.
With better control over external workforce, the organization can:
That makes compliance more than a control issue. It becomes a key part of how the organization governs external capacity, risk, and business-critical expertise.
For many organizations, SAP Fieldglass is a central platform for managing external workforce, consultants, and service delivery. The system can help provide better control over processes, agreements, onboarding, classification, and follow-up.
But technology doesn’t solve the whole issue on its own. To succeed, you also need clear ways of working, the right governance, and an understanding of which risks need to be managed.
This is where experience in sourcing, compliance, and change management becomes critical. The system needs to support the right process—and the process, in turn, needs to reflect both the business’s needs and the regulations the organization must comply with.
Compliance for external workforce isn’t just about avoiding mistakes. It’s about building control, transparency, and confidence in an increasingly flexible labor market.
As companies use more external resources, the need for clear processes also increases. The organization needs to know who is working in the business, how they’re engaged, and which rules apply.
For companies that want to take a more strategic approach to contingent workforce, compliance is therefore a basic requirement—not only to reduce risk, but to grow, scale, and use external expertise in a safe and sustainable way.
Compliance matters because incorrect handling of external consultants can lead to legal risks, costs, lack of control, and damaged trust. The organization needs to know which external resources are working in the business and ensure they’re managed according to the right rules and processes.
Contingent workforce refers to external resources who work for an organization without being permanent employees. For example, consultants, temporary resources, freelancers, or time-and-material resources.
A supplier is often managed at the company or contract level. A contingent worker is an individual who may need personal onboarding, agreements, confidentiality documents, training, and system access. That’s why more detailed controls are often required.
The risks can include legal consequences, financial penalties, non-compliance, improper access to systems, unclear accountability, and loss of control over external headcount.
SAP Fieldglass can help organizations structure how they manage external workforce. The platform can provide better control over processes, agreements, onboarding, classification, and follow-up. To succeed, you also need clear ways of working and the right governance.
