Managing labor costs is a major challenge for many organizations, especially those with a significant contingent workforce or external services. Without effective controls, labor expenses can quickly escalate, impacting profitability and operational efficiency. SAP Fieldglass, a leading cloud-based Vendor Management System (VMS), provides powerful tools to enable Strategic Labor Cost Management—helping businesses gain visibility, optimize spending, and control their workforce costs.
This article explores how SAP Fieldglass supports strategic labor cost management, outlining key features and best practices to help organizations achieve cost transparency, compliance, and operational agility.
Labor costs, especially contingent labor and outsourced services, often constitute a substantial portion of a company’s operating expenses. Unlike permanent employees, contingent labor costs can be variable and complex, involving multiple suppliers, diverse job roles, and fluctuating demand. Without strategic management, organizations face risks such as:
Strategic labor cost management enables companies to proactively manage these challenges by controlling labor spend, aligning resources with demand, and ensuring compliance.
SAP Fieldglass delivers comprehensive capabilities to manage labor costs strategically across the entire contingent workforce lifecycle:
Fieldglass aggregates labor data from multiple suppliers, contracts, and work assignments into a single platform. This centralized visibility allows procurement and finance teams to monitor actual spend versus budget in real time, uncovering cost drivers and areas of overspending.
Fieldglass enables organizations to establish and enforce standardized rate cards, contract terms, and billing rules. This standardization helps prevent unauthorized rate changes and ensures consistent pricing across suppliers and job categories.
By integrating labor demand planning into Fieldglass, organizations can anticipate resource needs, avoid overstaffing, and optimize workforce mix. Forecasting tools help align contingent labor budgets with business growth and project pipelines.
Fieldglass automates the capture and validation of timesheets and invoices, reducing manual errors and preventing overbilling. Automated workflows ensure labor hours are approved and billed according to contract terms, improving cost control.
Fieldglass provides analytics and supplier scorecards that evaluate cost efficiency alongside performance metrics. Procurement can identify high-cost suppliers or job roles and negotiate better rates or adjust resource allocations accordingly.
Fieldglass helps ensure labor cost compliance with regulatory requirements, company policies, and contract terms. This reduces the risk of costly fines, audits, or reputational damage related to labor misclassification or wage violations.
SAP Fieldglass provides an integrated, scalable solution for strategic labor cost management, enabling organizations to gain control over contingent workforce expenses while maintaining flexibility and compliance. By leveraging Fieldglass’s visibility, automation, and analytics, companies can optimize labor spend, improve supplier performance, and support broader business objectives.
In an era where workforce agility and cost efficiency are key competitive differentiators, mastering labor cost management through SAP Fieldglass is essential for sustainable success.