CSRD and your external workforce: what procurement needs to know

Most enterprises can tell you exactly how many employees they have. Far fewer can say how many consultants and contractors worked for them last quarter, through which suppliers, at what rates. That gap has always cost money - companies that consolidate consultant management typically hand managers back 15 hours per week - but European sustainability reporting is turning it into a compliance question too. The Corporate Sustainability Reporting Directive (CSRD) asks large companies to report on their workforce, and workforce does not stop at employees.

What CSRD asks about workers who are not employees

Under CSRD, in-scope companies report against the European Sustainability Reporting Standards (ESRS). The standard covering a company's own workforce, ESRS S1, is written to include non-employees in the undertaking's own workforce - which, depending on your structure, can include agency workers and certain contractors and consultants working under your direction.

In practice, companies in scope may need to disclose headcount-style information about people they do not employ: how many there are and, in some areas, information about their working conditions. If your consultant population lives in spreadsheets spread across subsidiaries, producing that number once a year is an archaeology project.

An important caveat: this area is moving. The 2025 Omnibus package delayed reporting waves and narrowed scope for many companies, and the standards are being simplified. Which entities report, when, and in how much detail depends on your size, listing status and member-state transposition. None of this is legal advice - scope and timing are questions for your counsel and your sustainability team. What does not change is the direction of travel: European regulators increasingly treat the external workforce as part of the workforce.

Why this lands on procurement's desk

Sustainability teams own the report, but the data lives where the spend happens. Consultant and SOW engagements are bought by managers across the business, through staffing suppliers, consultancies and brokers, and reconciled - if at all - in finance. Nobody holds the complete picture. When the reporting request arrives, it becomes procurement's job to answer three questions that sound simple and rarely are:

• How many external workers did we have in the period, across all subsidiaries and suppliers?
• Who are they working through, and under what contracts?
• Can we evidence the answer - not estimate it - if audited?

If you have ever tried to answer these from spreadsheets, you already know the failure mode: every subsidiary keeps its own list, suppliers report differently, and the numbers never reconcile with the invoices.

The system-of-record answer

The durable fix is not a better annual data collection exercise - it is having every external engagement on one record while it is happening. When each consultant engagement carries its supplier, contract, dates, rate and invoices in one system, the compliance answer is a report, not a project. That is the same infrastructure that pays for itself commercially: the average Fill customer saves EUR 2M in the first year, because visibility that satisfies a reporting standard is the same visibility that catches rate drift and duplicate spend.

A practical checklist for getting ahead of it:

• Inventory your sources. List every place external workers are tracked today - VMS, spreadsheets, supplier reports, finance systems.
• Standardise the definition. Agree internally which categories of external workers your disclosures will cover, with counsel's input.
• Consolidate onto one record. One system for engagements means one query at reporting time.
• Make suppliers part of the flow. If supplier data enters the system per engagement, you are not chasing spreadsheets each quarter.

For a broader grounding, see our guides to what a VMS is and VMS vs MSP.

Frequently asked questions

Does CSRD require reporting on consultants and contractors?

It can. ESRS S1 covers non-employees in your own workforce, which may include agency workers and certain contractors, depending on how they work for you. Scope, timing and level of detail vary by company and are still being adjusted at EU level - confirm your position with counsel and your sustainability team.

When do companies have to report?

Reporting waves are being phased by company size and listing status, and the 2025 Omnibus changes delayed several waves. The safe assumption for a large European enterprise: within your next few reporting cycles, someone will ask you for external-workforce numbers.

What data should procurement start collecting now?

At minimum: engagement counts per period, supplier, legal entity and country, with contract references. Collect it continuously in a system of record rather than annually in spreadsheets - the same data controls cost during the year.