Transforming the Workforce Supply Chain – How Fintech is Boosting Competitiveness
- Richard Prime, Co-Founder and CEO at Sonovate
- 07.03.2023 09:45 am #fintech
We’ve heard a lot about supply chain disruption in the past couple of years. From delays in the provision of raw materials, to interruptions in energy supplies and issues with logistics and transportation, such complications have impacted the availability of commodities, products and services around the globe. As a result, prices have shot up globally.
Yet one area that is not talked about enough - and which is equally at risk - is the workforce supply chain. By this we mean the process of acquiring, managing and deploying a company's workforce. This includes recruiting and hiring employees, managing their performance and development, and planning for their eventual exit – as well as contractors, temporary workers, and other non-permanent staff. Effective management of the workforce supply chain can lead to a more productive and competent talent pool, and fintech has an important role to play here.
The contingent workforce of contractors and freelancers is estimated to represent over 80% of the total revenue of the recruitment industry and, given our research has found freelancers are often still having to wait three times longer to get paid compared to full time staff, businesses need more options when it comes to payments. We see this as the convergence of three futures – the future of work, the future of finance, and the future of technology.
So, what are the emerging trends that will shape this converged future?
The future of work
Work is becoming increasingly flexible as technology advances support remote working. Companies recognise that this can increase productivity and employee satisfaction. Our research also shows that almost half of employees see it as a way to ease the burden of rising costs. Similarly, 67% of businesses report a shift towards increased reliance on contingent workers. At a time of skill shortages, this can only mean more availability of a diverse, motivated, and skilled talent pool.
The future of finance
Financial technologies have emerged as the enablers of the modern workforce, making it possible to deliver payments seamlessly and across borders. Recruiters need an interconnected system in order to facilitate the flow of money between the firm, its candidates, and its clients. Additionally, the firm may need to connect with banks and other financial institutions to secure funding for expansion and manage its operations more efficiently.
With so many parties involved, flexibility is key. Salaries for roles can vary greatly between sectors, for example, software developer remuneration may differ between the technology and retail industries. Additionally, different sectors may have varying ways of working – whether that’s paying contractors on a project-by-project basis, at different intervals, or adjusting pay based on hours or project requirements. This flexibility can also help to attract and retain top talent, as contractors may be more likely to work with those recruiters who have systems in place to ensure timely compensation.
The future of technology
In a competitive landscape, companies need to integrate effective yet simple tech infrastructure allowing teams to boost operational efficiencies and decision making - this could involve anything from electronic signature software or identity verification, to synchronising accounts receivable.
In addition, open finance initiatives, such as open banking, allow third-party fintechs to access data from banks and other financial institutions, with the customer's consent. This is important as some industries may require recruiters to verify relevant candidate information. Open banking also simplifies the process of background checks – combating the increasing threat of recruitment fraud by combining LinkedIn employment history with bank data.
Meanwhile, artificial Intelligence and cognitive analytics (enabling analytic tools to think like humans), will help to build predictive models for organisations to identify additional opportunities to scale and grow. These systems can also accurately vet candidates for roles, boosting efficiency and improving outcomes for customers.
Robotic process automation will continue to systematise business practices and offer competitive gains by providing recruiters enhanced insights into candidates to determine their suitability for a particular role, further enhancing the effectiveness of the selection process and boosting profitability for both recruiter and client.
The transformational role of fintech
These trends are only the start of a deep and significant transformation. Fintech has already demonstrated that it has the potential to metamorphose the entire workforce supply chain but there is further innovation to come and the next five years will undoubtedly see even more positive change for the sector. From our side, we are extensively investing and building partnerships to automate our accreditation, risk management and reporting processes. We are working on APIs to expand our offering into the embedded payments space. All around us, the financial and technological ecosystems are shifting. The end result can only be more power to workers and to their employers – with the financial and competitive benefits that this unlocks.