Contingent labor is now a critical part of workforce strategy - but many organizations still don’t know exactly what they’re spending.
In fact, nearly 60% of contingent workforce spend goes untracked, leaving businesses exposed to hidden costs, inconsistent rates, and missed savings opportunities.
If you can’t clearly answer “What are we spending on contingent workers this year?” - you’re not alone. But it’s also a major risk.
Many businesses, especially those with smaller volumes of contingent workers, often lack the necessary management practices, technology, or processes to effectively capture and monitor all their contingent workforce spend.
In fact, according to a study by Ardent Partners, nearly 60 percent of contingent spending goes untracked in financial planning, forecasting, and budgeting in the average organization.
Why is this important, and how can your organization achieve full visibility and control over contingent workforce spending?
As companies scale their use of contractors, temps, and agency workers, spend becomes harder to track.
Common challenges include:
The result? A fragmented view of your workforce - and your costs.
For large enterprises, contingent workforce programs are often managed by dedicated teams or MSPs. Rogue Spend isn’t an issue for large enterprise organizations which have the resources to hire either specialized internal teams or outsourced contingent workforce MSPs specifically designated to manage their contingent workforce program.
But for Mid-Market organizations and growing companies:
Many rely on spreadsheets, which:
These spreadsheets are vulnerable to human error, they get saved in multiple locations across different departments leading to inaccurate figures, inefficient processes and rates that aren’t standardized, and they even get lost.
The result? Contingent workforce data is saved across a number of spreadsheets under the same name, with no one in the organization knowing which is the right document to use. Even worse, contingent workforce information is only saved through emails, and never even entered on the spreadsheet in the first place.
With no centralized place for contingent workforce data to be saved, businesses completely lack visibility into their contingent workforce spend.
Without a single source of truth, accurate spend tracking becomes nearly impossible.
Lack of visibility doesn’t just create confusion - it directly impacts your bottom line.
If you can’t answer these confidently, your spend is likely out of control.
Are you looking for a better, and cost-effective, solution that gives your business complete visibility into contingent workforce spend so that you can make program changes that reduce costs and improve workforce quality?
That solution comes in the form of a vendor management system.
A vendor management system (VMS), is a cloud-enabled software platform that centralized and automates the entire lifecycle of managing contingent workers and staffing agencies - from source to pay.
By consolidating all of the processes and data associated with contingent workforce management into one central location, businesses gain complete visibility into their contingent workforce spend and where program improvements can be made.
A VMS enhances visibility into contingent workforce spending by centralizing data, automating processes, and offering real-time insights into costs, performance, and spending trends, ultimately facilitating better decision-making and budget management.
A VMS serves as a single source of truth for all contingent workforce information, including worker details, project assignments, time and expense tracking, and vendor performance data.
This centralized data supports comprehensive reporting and analysis, allowing you to track spending by project, vendor, skill type, and other relevant categories.
A VMS enables the creation of dashboards and reports that provide a clear overview of contingent workforce costs and trends.
A VMS streamlines processes such as requisition management, onboarding, time and expense tracking, and invoice processing, reducing manual effort and potential errors.
Automated workflows ensure accurate data capture and timely payments, enhancing efficiency and reducing administrative overhead.
A VMS offers real-time visibility into contingent workforce costs, enabling you to identify potential cost-saving areas and optimize spending.
By tracking spending trends and analyzing vendor performance, you can make informed decisions about vendor selection, contract negotiations, and resource allocation.
A VMS can help you understand bill rates, pay rates, and margins, facilitating data-driven negotiations with vendors.
A VMS helps ensure compliance with labor laws and regulations by tracking worker information, contract terms, and payment schedules.
It also aids in risk management by providing visibility into vendor performance, compliance, and potential liabilities.
A VMS can integrate with Human Capital Management (HCM) and financial systems, offering a comprehensive view of your entire workforce, including both employees and contingent workers.
This integration allows for seamless data sharing and reporting, improving accuracy and efficiency.
Organizations that gain control of contingent workforce spend typically achieve:
Most importantly - they move from reactive to strategic workforce management.
If you don’t know what you’re spending on contingent workers, you’re not in control of your workforce - you’re reacting to it.
In today’s environment, visibility isn’t optional. It’s the foundation for cost control, compliance, and smarter workforce decisions.
Learn more about the Benefits of a VMS and what to look for when choosing the best VMS for your organization. Download our Free VMS Buyer's Guide here:
Everything You Need to Know about VMS Cost Savings | Guide
Case Study: How a Manufacturer Cut Costs by 27% and No Shows by 80% with Conexis VMS
Conexis is an award-winning Vendor Management System built for organizations that want the power of enterprise software without the complexity or cost.
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Conexis VMS is purpose-built for organizations seeking to manage their contingent labor spend effectively. Here’s why we're the right choice:
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