When it comes to managing a contingent workforce program, technology is essential. In fact, according to figures from Ardent Partner, 82 percent of organizations that are considered “best-in-class” in the management of their contingent workforces have implemented VMS technology into their processes.
Yet when it comes to companies digitally transforming how they manage their contingent workforce program, there’s one huge problem. The traditional VMS providers have designed their software for large organizations with enterprise-level contingent workforce volumes.
That has left small businesses, as well as large businesses with smaller contingent workforce volumes, with no vendor management system options to implement into their contingent workforce program.
With that in mind, in this blog we take a look at what vendor management software is, how it helps improve your contingent workforce management program and whether there is vendor management software for small business or large organizations with small contingent workforce volumes.
To learn how to make the most of your VMS, check out our blog - The Top 4 Vendor Management System Best Practices.
What is a vendor management system?
A vendor management system is a software application that enables businesses to automate and manage the procurement of temporary workers , in addition to automating the processes associated with their entire contingent workforce program.
A VMS allows businesses to automate all of the processes involved in contingent workforce management, including engaging staffing agencies, sourcing talented contractors, onboarding contingent workers, time entry, approval and invoicing. A vendor management system also has reporting functionalities that give a business insight into the performance of their staffing agencies.
By consolidating all contingent workforce management data into one centralized platform, companies can completely standardize their contingent workforce management rates and processes across all hiring managers within the organization.
How businesses benefit from the use of vendor management software
The use of vendor management software brings five key benefits to an organization's contingent workforce management program:
- Cost control: Vendor management software gives an organization the company-wide visibility into its contingent workforce program that it needs to control costs. Businesses can establish vendor rates for hiring managers to follow, as well as setting standardized pay rates for specific open positions.
- Visibility: Vendor management software captures all contingent workforce data in one centralized system, dramatically improving the visibility that an organization has into its contingent workers and staffing agencies. This leads to better decision making in the future.
- Improved workforce quality: By better managing staffing agencies, and gaining visibility into their performance, businesses can male decision that improve the quality of their contingent workforce and lead to improved metrics such as reduces time-to-fill, reduced turnover and reduced time-to-submit.
- Process efficiencies: By automating processes such as requisitions, sourcing, onboarding, time entry and approval, invoicing, and payments, a vendor management system can dramatically improve how efficient a company’s contingent workforce processes are. This frees up HR and procurement teams to work on business critical projects.
- Better compliance: Vendor management software provides businesses with the platform they need to properly document their contingent workforce and classify their temporary workers and independent contractors correctly, so that they don’t fall foul of regulatory compliance requirements.
Traditional VMS players are designed for organizations with enterprise spend
Despite these benefits, the traditional VMS players have typically priced small businesses and organizations with smaller contingent workforce volumes out of the market. That’s because the traditional VMS is both complex and expensive.
Since VMS providers typically base their price on a percentage of their customers’ contingent workforce spend, traditional vendor management software is just way too expensive for organizations with smaller contingent workforce volumes.
For example, if a vendor management system charges you a 1 percent fee on contingent workforce spend for the use of the platform, that would be a whopping $100,000 a year for the use of the software for a company that spends $10 million a year on contingent work.
Small businesses and organizations with smaller contingent workforce volumes simply cannot justify this annual spend - and that’s not even getting into the complex nature of these systems and how implementation and employee training can take significant amounts of time.
The solution - How Conexis VMS can help
Conexis VMS is the very first vendor management system designed specifically for organizations with smaller contingent workforce volumes - meaning there’s now vendor management software for Small Business or companies with smaller contingent workforce budgets.
Conexis VMS has implemented a SaaS model of pricing, so that organizations which don’t need the complex functionality of the traditional VMS players or the expensive price tag can dramatically improve their ROI by using our innovative vendor management software instead.
We’ve intentionally designed our vendor management system to be cost-effective and easy-to-use for organizations that don’t need the complex functionality and time-consuming features of the traditional VMS players.
Are you interested in learning more about how you can improve your contingent workforce ROI by implementing Conexis VMS into your processes?