Many organizations know that compliance is important when engaging external consultants. Fewer know where to start the work.
Should you start with the contracts? In the HR system? In the supplier base? In SAP Fieldglass? Or with the managers who actually bring in external resources?
In this episode of Implema Talks, Johan Söderström continues the conversation with Christina Nicolaou about compliance for external labor. The focus is on how the work can be carried out in practice. Christina describes how organizations can find pain points, use data, create clear classifications, and involve Legal, HR, Sourcing, and management in the same effort.
Compliance for external labor isn’t a matter for a single function. To gain control over consultants, contingent workers, and statement of work resources, Legal, HR, Sourcing, and the business need to work together.
Legal provides the right facts and interpretation of regulations. HR can contribute data, roles, and organizational structure. Sourcing often has insight into suppliers, contracts, and procurement processes. Together, these functions can identify risks, classify external resources correctly, and build a more sustainable model for compliance in SAP Fieldglass and other systems.
A common mistake is jumping straight to the solution. But according to Christina, the work begins with understanding the organization’s maturity and where the risks lie.
Many organizations believe they have control. They have contracts, processes, and systems. But when you start looking closer, it often turns out that different parts of the business are working in different ways.
It could be that external resources have been misclassified. It could also be that the organization lacks clear instructions, that onboarding happens differently in different countries, or that managers don’t know which rules apply.
That’s why the first step needs to be a current state assessment:
When the current state is clear, it becomes easier to prioritize the right actions.
A central part of compliance work is understanding the difference between different types of external resources.
Not all external resources are the same. A contingent worker, a time and material resource, and a statement of work setup may require different processes, controls, and follow-up.
If the classification is wrong, the organization risks handling the resource the wrong way. This, in turn, can create legal risks, lack of control, and incorrect reporting.
Therefore, the organization needs to create clear definitions:
This is particularly important in larger organizations where different countries, functions, and business areas may use different terms. If the organization doesn’t speak the same language, it becomes difficult to create a common compliance process.
Compliance for external labor often falls between several functions. This is one of the reasons the work becomes complex.
Legal has knowledge of regulations, risks, and legal consequences. HR often has data on roles, organization, access, and individuals. Sourcing has insight into suppliers, contracts, procurement processes, and category management. The business knows how resources are actually used in daily work.
To succeed, these perspectives need to be linked together.
Legal can help ensure that guidelines and measures are based on correct facts. HR can help identify people, roles, and organizational connections. Sourcing can help understand contracts, supplier relationships, and procurement flows. Managers and local contact persons can provide the practical picture of how the work functions in reality.
When these functions work separately, gaps appear. When they work together, the compliance issue becomes more concrete, more anchored, and easier to follow up on.
Effective compliance work requires data. In the conversation, Christina describes how the work often involves collecting and comparing information from several different systems.
This can involve HR data, system access, supplier data, function lists, and other information that helps the organization identify external resources and understand how they are engaged.
In practice, the work can involve going through large amounts of data, function by function and country by country. It is often an extensive task. But it is also necessary to find discrepancies.
Examples of questions the data needs to answer:
It is often in these interfaces that risks become visible.
An important insight from the conversation is that many mistakes are not due to unwillingness. They happen because people don’t know how to do things correctly.
Managers, assistants, and local functions may have brought in external resources according to the process they believe is correct. But if instructions are unclear, hard to find, or interpreted differently between countries and functions, inconsistencies arise.
Therefore, compliance work also needs to include training.
The organization needs to explain:
It’s not just about controlling. It’s also about creating the conditions for people to do the right thing.
Compliance work around external labor can affect the organization’s reporting, headcount, cost profile, and working methods. Therefore, it’s not enough for the work to be driven from an operational function.
Management needs to understand why the work is important and stand behind the necessary changes.
In some cases, a more correct way of working can mean the organization gets a clearer picture of its external workforce. It might show that the external headcount is larger than previously thought. It could also mean that certain processes need to change or that responsibilities need to be clarified.
Without support from management, it becomes difficult to push through such changes. With the right support, compliance work becomes both clearer and more sustainable.
SAP Fieldglass can be an important platform for managing external labor, contingent workers, and statement of work. But the system needs to be built on clear definitions and processes.
If the organization doesn’t know how different resources should be classified, or what controls should take place, it becomes difficult to get the full effect of the system support.
Therefore, work with SAP Fieldglass and compliance should start from the same foundation:
When this is in place, SAP Fieldglass can contribute to better visibility, governance, and control over the external workforce.
Compliance work must not become a one-time effort. The real value arises when the organization builds control into its ongoing operations.
This means that classification, onboarding, contracts, access, and follow-up need to be part of the regular process. Not something that is audited after the fact when the problem has already occurred.
A good way of working creates clarity for everyone involved:
This makes compliance a business issue, not just a regulatory one.
External labor is often business-critical. But it also creates risks if not managed in a structured way.
To succeed, the organization needs to bring Legal, HR, Sourcing, and the business together around a common view of the current state, risks, and working methods. This requires data, clear definitions, training, and management support.
When the work is done right, compliance becomes more than just a way to avoid problems. It becomes a way to create control, transparency, and better governance over external expertise.
Legal, HR, and Sourcing can collaborate by combining legal expertise, HR data, supplier insight, and business understanding. Together, they can identify risks, classify external resources correctly, and create common processes for managing external labor.
The work should begin with a current state analysis. The organization needs to understand where the risks are, which external resources are engaged, how they are classified, and which systems contain relevant data.
Classification is important because different types of external resources require different processes and controls. A contingent worker, a time and material resource, and a statement of work setup should not always be handled the same way.
HR can contribute data on people, roles, organization, and access. This helps the organization identify external resources and understand how they are connected to the business.
Legal ensures that guidelines, classifications, and measures are based on correct legal facts. They help the organization understand the risks and consequences of incorrect handling.
SAP Fieldglass can contribute to better control over external resources by structuring processes for ordering, classification, onboarding, contracts, and follow-up. Success requires clear definitions, correct data, and anchored working methods.
Get in touch with our team – we’re happy to help!
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