A Vendor Management System (VMS) is a software application, typically cloud-based, that helps to facilitate the process of contingent worker procurement and contingent workforce management. A VMS will automate and streamline the sourcing, engaging, managing and payrolling of contingent workers sourced through an organization directly or by their Managed Services Provider (MSP) like a staffing agency.
With today's global talent pool, organizations have access to the types of highly skilled contingent workers that are transforming the way business as usual is being done. Knowledge workers around the world are digitally based and remote ready to complete projects or fill roles, and companies that tap into the contingent talent pool are edging out competition with a less nimble approach to employment.
Yet, while a contingent workforce, inarguably, comes with many benefits that are associated with the agility to scale up and down hiring needs, each contingent worker type comes with its own set of legal obligations and tax requirements -- and heavy penalties if employers aren't compliant.
For many organizations, one of the answers to navigating the many complexities of contingent workforce management is a Vendor Management System.
What role does a Vendor Management System play in contingent workforce management?
Business leaders admit they lack insight into who works for them. A recent study conducted by Oxford Economics and Fieldglass finds only 40-47 per cent of business executives consider themselves "highly informed" about compliance, contingent workers' responsibilities, tenure, quality of work, headcount and access to facilities.
Similarly, a familiar pattern emerges with procurement professionals - the same study finds just over half of executives surveyed (53 per cent) are "highly informed" about the responsibilities of the service providers, and even less are informed of the duration of work, access to facilities, systems and confidential information, work quality, progress against milestones and/or deliverables, and compliance with licenses and certifications.
A VMS tool will help employers achieve greater visibility across their entire contingent worker program while earning cost savings, improving program efficiencies and enforcing compliance.
Why do organizations use Vendor Management Systems?
In an increasingly complex, global workforce, a Vendor Management System will help employers take a more organized approach to managing their contingent workers. For any successful contingent worker program, a Vendor Management System is essential.
Vendor Management Systems enable organizations to take a more organized and systematic approach to managing their contingent workforce.
What are the benefits of a Vendor Management System?
Vendor Management Systems will help employers achieve greater visibility across their entire contingent worker program while earning cost savings, improving program efficiencies and enforcing compliance. Vendor Management Systems will also help employers:
Achieve Greater workforce visibility
Vendor Management systems make it easy for organizations to achieve total visibility over their contingent worker program. This maximizes cost savings, improves worker performance and enforces compliance.
Automate and streamline processes
A Vendor Management solution will guide users step-by-step through each process associated with procuring external resources. From creating a requisition to offboarding, Vendor Management software will seamlessly complete each task. With automation eliminating tedious administrative responsibilities, organizations can save time and money.
Accurately track applicants
Vendor Management Systems have powerful applicant tracking capabilities that create a more efficient hiring process across all areas of an organization. With automation tackling the administrative tasks associated with onboarding, offboarding and all tasks in between, employers have access to all hiring data with the ability to reject or accept any items in the workflows.
Reporting and Analytics
A Vendor Management System allows organizations to gather comprehensive date on their contingent workers and program. Employers will have access to data that can accurately evaluate costs, time-to-hire, candidate quality and quantity and the organization's exposure to risk. These data-driven reports allow organizations to evaluate their numbers against the competition and the industry.
The analytics capabilities of Vendor Management Systems enable organizations to make better enterprise-wide decisions. The management system gives users direct access to the data that allows employers to gauge the success of their programs, and make adjustments accordingly.
Efficient Processes and Compliance
A Vendor Management System will ensure processes and procedures are consistent across all areas of an organization's departments and locations - even if their contingent worker programs are managed independently. This capability not only sets the standard approach to management, but also ensures that organizations are compliant with local legislation.
A VMS can also integrate a vendor management solution. Through a VMS, organizations can track pre-defined performance metrics during the duration of the contract(s). This enables employers to gain greater visibility into their vendor relationships and have more control over their vendor selections. A vendor management solution that integrates with a VMS can give employers confidence in the quality of services that are being delivered.
Getting it right
When sourcing and implementing a Vendor Management System, it's important to get the support and buy-in from the key stakeholders in the organization. Once management is on board, the key to supporting your organization's management objectives is planning, choosing and configuring the right technology to suit your needs.
If you're considering a VMS or are re-evaluating your current system, significant operational changes can require a new management solution as you remodel your blended workforce. A Managed Services Program (MSP) will support these tech changes across the entire contingent workforce delivery. Discover if an MSP is a service that your organization could benefit from investing in with our insights on Managed Services Programs.