With an increasing number of organizations now relying heavily on contingent workers, many businesses are actively looking at how they can better manage their contingent workforce management programs.
To truly plan, design, and implement a strategic contingent workforce program, technology must be at its very heart.
In fact, according to research from Aberdeen Group, 89 percent of organizations that are considered "best-in-class" in contingent workforce management have implemented a vendor management system into their programs.
There’s a reason why, according to an Everest Group report, the vendor management system market is expected to grow between 7 to 11 percent by 2023. It's because VMS technology is so crucial to the success of contingent workforce management!
So, what actually is a vendor management system? In this blog, we take a look at everything you need to know about vendor management systems, including what they are, why they are important and the benefits they bring to your organization's contingent workforce program.
What is a vendor management system?
A vendor management system is a web or cloud-based application that allows an organization to securely manage, and consolidate, staffing vendor services on a temporary, contract or permanent basis all on one centralized platform.
By centralizing and automating the complex challenges that surround managing staffing vendors, businesses can gain clear visibility into their staffing agency workforce, leading to a wide range of both soft and hard savings.
A VMS allows you to manage the entire vendor process in one central location, with the ability to automate each step of the staffing agency lifecycle - from engaging a vendor, sourcing talented contingent workers, onboarding, time entry, approval and invoicing.
A cloud vendor management system offers you complete accessibility, from any device with an internet connection - no matter where in the world you are currently located.
Why the use of a vendor management system is so important
Contingent workforce management programs are notoriously difficult to set up. That's because they are incredibly time-consuming and complex to set up, and this is made almost impossible without the right technology in place.
The main challenge often comes for organizations with smaller contingent workforce budgets, who are typically using manual spreadsheets, in-house databases, or SharePoint-like websites to manage their staffing vendors.
These manual, time-consuming, and error-prone methods of managing contingent workers and staffing agencies lead to fragmented processes across your organization, a lack of visibility into non-employee and vendor performance as well as rogue spending that impacts overall business profitability.
Instead, your business can realize huge ROI by investing in a vendor management system (VMS).
Are you looking to improve how you manage your non-employee workforce and the staffing agencies you use to source those workers? In this blog we’re going to dive into what a VMS actually is, some of the key features these solutions have and how exactly they benefit your contingent workforce management program.
Vendor management system benefits
Now you know exactly what a vendor management system is and some of the key functionalities you should look for in a VMS, here are some of the ways that your business can drive ROI by using one.
You can’t manage what you can’t see, and that’s the main challenge with managing your staffing agencies on manual spreadsheets. A VMS consolidates your entire workforce and staffing agency data in one central location, making it easy for your company to gain complete control of the entire vendor lifecycle.
Improved efficiencies through automation
Managing staffing agencies on manual spreadsheets results in fragmented processes and time-consuming steps. Using a vendor management system to automate these processes can result in significant efficiency gains across your organization, making processes such as requisitions, sourcing, onboarding, time entry, approval, and payments seamless across every department within your business.
Analytics and reporting that improve workforce quality
The entire point of a non-employee workforce program is to access hot skills. That means you need quality workers, and you need to be able to onboard them on short notice. A VMS gives you the visibility and analytical data you need to ensure that your staffing agencies are meeting vendor standards and helping your organization to meet its predetermined workforce targets.
Greater control of spend
When companies use a spreadsheet vs. a vendor management system, it results in a lack of visibility and control over vendor performance, leading to the organization overpaying for non-employee workers. Through the visibility and control provided by a VMS, organizations can limit hidden costs and rogue spending by ensuring staffing agencies are meeting their targets and that they are paying temps or ICs the market rate.
The key features of a vendor management system
Organizations will benefit most from an easy-to-use VMS, without all of the complicated bells and whistles that traditional enterprise VMS features.
Here are some of the vendor management features that will improve how you manage your contingent workforce program:
- The ability to consolidate your staffing vendors
- The automation of vendor management processes.
- Program centralization so that your entire organization is in sync, and visible
- Vendor guidelines that act as a framework for all hiring managers across your business.
- Simplicity, for an easy-to-use platform.
- Process requisitions and approvals.
- Scalability, so your technology can grow with your business.
Want to learn more about how a vendor management system can benefit your company’s non-employee workforce program? Contact Conexis VMS today. Our team would be happy to answer any questions that you may have.