The future of work is becoming increasingly contingent focused. The number of consultants, freelancers, contractors, temps and other types of non-employee workers is increasing at a significant rate.
This means how you manage them is crucial, but should you outsource to an MSP or manage them internally with a vendor management system or both?
In fact, according to a Trends report from Intuit, roughly 25-30 percent of the US workforce is contingent - a number which will exceed continue to grow. Not only that, but the report predicts that more than 80 percent of large corporations plan to “substantially increase” their use of the contingent workforce in the coming years.
These workers offer incredible benefits for your company. They help you reduce costs, find diverse and highly-skilled workers even when your industry is experiencing a skills shortage, and they give your organization the flexibility it needs to shift quickly depending on new projects or business goals.
But to gain these benefits you must manage your contingent workforce correctly. That's where one important question is asked: Managed Service Provider Vs Vendor Management System?
The growing use of the contingent workforce means you can no longer rely on manual management methods
The increased use of contingent workers means it’s no longer feasible for your organization to continue managing them, as well as the vendors you use to source and engage them, with manual and time-consuming spreadsheets, in-house databases or SharePoint-like websites
These manual processes of managing your non-employee workforce and vendor management relationships are inefficient and lead to a range of hidden costs and waste time for your business.
Failure to automate and centralize how you manage your non-employee workforce will lead your business to overpaying staffing vendors, wasting time on inefficient processes, lacking visibility into your contingent workforce, as well as many other things that impact your bottom line.
Thankfully, alongside the growth of the contingent workforce is a growing suite of supporting technologies and outsourced experts that can help your business attract, engage and manage non-employee workers and manage your relationships with the vendors you use to source them.
In this blog, Conexis VMS explores the two most common solutions: Managed services providers (MSPs) and vendor management systems (VMS).
What is a vendor management system (VMS)?
A vendor management system is a cloud-based technology that acts as a mechanism for your business to procure and manage your non-employee workforce. It supports your company in structuring and optimizing every process related to contingent workforce management.
A VMS solution will consolidate your entire contingent workforce management strategy into one centralized location. This includes everything from vendor relationships and performance, to every process concerning the sourcing, hiring, tracking and invoicing for temporary workers.
What is an MSP?
A managed service provider is the practice of outsourcing the responsibility for your organization’s entire contingent workforce management program. From setting up the program, interacting with vendors, hiring, contracting, onboarding, offboarding, billing and much more.
An MSP is a third-party which takes over the responsibility of your external workforce management completely from your company’s HR and procurement teams.
Managed service provider vs vendor management system or both?
While many companies employ an MSP and a VMS together to get the full benefit of outsourcing, outsourcing your contingent workforce management program to an MSP, in many cases, is a huge undertaking. That’s why many companies are opting to use just a VMS solution to automate and centralize their external workforce management processes while still continue to manage the actual hiring of contractors in-house.
A VMS will collect requisitions from managers, automate transactions, facilitate onboarding and consolidate your vendors in one location. A VMS stores all of this data (and much more) to support each stage of your non-employee workforce management process.
These optimized processes lead to improved visibility into your contingent workforce, increased efficiencies, consolidation of vendors, better reporting and analytics of vendor relationships, as well as increased cost savings.
Are you interested in learning more about managed service provider vs vendor management system, and why it’s the right choice for your organization? Contact Conexis VMS today. Conexis VMS is the easiest vendor management systems, built on the latest technology and designed with the user in mind.