3 August 2022

Staffing Vendor Management: How to Manage Staffing Agencies

Wayne Burgess
Wayne Burgess

Finding high-quality talent remains challenging for many organizations. This is especially true in today’s business environment, as “The Great Reshuffle” makes it increasingly more difficult to firstly keep workers, and, secondly, to source them.

That’s why many businesses today are expanding their use of their contingent workforce, and using staffing agencies to source non-employee workers. 

Staffing agencies essentially act as a middleman between employers and contingent workers, helping to match qualified candidates with companies that have existing job openings. A staffing agency works to source additional labor for an organization, in an effort to ensure the business is able to meet its workforce requirements. 

The use of staffing agencies can save your business time and money, as well as help you find qualified candidates to fill open positions. 

Yet managing staffing agencies can be a challenging process. In this blog we look at some of the top challenges associated with staffing vendor management, and the best practices you can implement to help build a robust contingent workforce management strategy.

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What are the challenges of managing staffing agencies? 

Successful staffing vendor management is a crucial aspect of cutting costs, sourcing high-quality contingent talent for your workforce and ensuring your staffing agencies are helping your organization achieve its workforce targets. 

The thing is, nobody said managing staffing agencies within your contingent workforce program is easy. 

In most cases, organizations use a wide range of staffing agencies to fulfill their workforce requirements. With that comes a huge amount of data that needs to be analyzed to ensure staffing agencies are helping the business meet its workforce targets. 

That’s why manually managing staffing agencies on spreadsheets, in-house databases or Sharepoint-like websites simply doesn’t work. In fact, these methods lead to hidden costs, a lack of visibility and poor decision making. 

Here are just a few of the top challenges that companies without a robust staffing vendor management strategy in place struggle with:

Lack of visibility

When staffing agencies aren’t managed correctly, and manual spreadsheets are used to record information, businesses will suffer from a complete lack of visibility into staffing agency performance and how many contingent workers have been sourced. This lack of visibility dramatically impacts the quality of your contingent workforce decision making moving forward.

Vendor compliance risk

Businesses engage staffing agencies to help them meet their companies workforce objectives. Without the ability to analyze staffing agency performance or visibility into the contingent workforce program, organizations don’t have the insights they need to ensure staffing vendors are complying with the predetermined standards.

A lack of a company-wide strategy

It’s incredibly easy for a contingent workforce program to become fragmented across an organization. In this case, hiring managers and team leaders engage staffing agencies on their own terms and at their own rates - and then don’t record this information. This leads to rogue spend, a lack of visibility and overspending on contingent talent.

Best practices for successful staffing vendor management

To address and mitigate the above challenges associated with staffing vendor management, there are a few things that your organizations can implement into your contingent workforce program:

  • Use a vendor management system 

The use of a vendor management system is the best way your business can mitigate the challenges associated with managing a contingent workforce program. A vendor management system is a centralized platform where your company can record contingent workforce data and automate a wide range of processes. 

Through the implementation of a vendor management system, your business will gain complete visibility into its contingent workforce program and centralize your strategy across the entire business. This leads to reduced costs, improved contingent workforce quality and better internal efficiencies.  

  • Set targets for your staffing agencies

One crucial component to successful staffing vendor management is to set targets for your staffing agencies. A vendor management system will give your organization the data you need to monitor and track staffing agency performance.

Metrics such as time-to-fill, time-to-submit and turnover will give your business the data it needs to analyze whether your staffing agencies are helping you meet your workforce targets, while these KPIs can also be used in tandem with your staffing vendors to make improved contingent workforce decisions moving forward.

  • Align all departments and hiring managers

A contingent workforce program should be planned, designed and implemented in a highly strategic manner. It should be a workforce strategy that is centralized across your entire organization, so that hiring managers follow protocols when it comes to engaging, paying and record staffing agency information.

When your business is able to align all departments and hiring managers with your contingent workforce strategy, you’ll be able to gain complete visibility into what staffing agencies your business is using, how much you are paying them for talent and how they are performing in relation to your overall business goals. 

Are you interested in learning more about how you can better manage your staffing agencies, and improve the results of your contingent workforce program?

Book a demo of Conexis VMS today, and learn how our vendor management system can help you achieve improved contingent workforce ROI.

Let's Talk - Contact Conexis VMS


Wayne Burgess

Wayne Burgess

Prior to starting Conexis, Wayne was a tireless champion for clients within Accenture’s Procurement practice with specific experience across the Services and Contingent Labour spectrum. Wayne has run programs from as small as $5m to as big as $2bn. Wayne has deep consulting and operational delivery experience. He is a talented leader of organizations and has a proven track record of driving significant customer value.

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