When it comes to managing a contingent workforce program, technology is essential. If you are managing a mid-size contingent workforce program, you may not be aware of the benefits a Vendor Management System designed specifically for mid-market can bring. In this article, we look at why VMS software is key for mid-size businesses, large organizations with smaller contingent workforce volumes or MSPs managing mid-size programs for clients.
According to industry research, 82% 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 transforming how they manage their contingent workforce program, there’s one huge problem. Many of the traditional VMS providers have designed their software for large organizations with enterprise-level contingent workforce volumes.
Historically, this has left small and mid-size businesses, as well as large businesses with smaller contingent workforce volumes, with no vendor management system options to implement into their contingent workforce program.
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 mid-size 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.
Here are some popular articles on VMS Benefits for mid-market programs:
Mid-Market: Choosing the Right VMS for your Mid-Market Contingent Workforce Program
Cost Savings: How you can save 20% on your contingent workforce cost with a VMS
Reducing Risk: 5 Ways to reduce contingent workforce risk with a VMS
Improving Compliance: 10 Ways a VMS helps improve contingent workforce compliance
Managing Shift-Workers: 5 Ways a VMS helps you manage shift-based workers
Improving Invoicing: 5 Ways a VMS streamlines and improves invoicing
Increasing Visibility: 5 ways a VMS gives you visibility into your contingent workforce program
Measuring Staffing Agency Performance: How a VMS improves staffing agency performance
Traditional VMS players are designed for organizations with enterprise spend
Despite these benefits, the traditional VMS players have typically priced small/mid-size businesses and organizations with smaller contingent workforce volumes out of the market. That’s because the legacy VMS systems are 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.
Many 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.
However times have changed. With the innovations in technology, there are now affordable options for mid size organizations. As you evaluate your options, consider these key factors when evaluating potential Vendor Management Systems:
Five key factors when evaluating a VMS for your mid-market program
1 - Comprehensive Skill Category Coverage
A common challenge for companies managing contingent labor is juggling multiple systems to handle different workforce segments. Whether you’re hiring highly skilled IT contractors, warehouse associates, or healthcare professionals, your Vendor Management System (VMS) should support all skill categories. This capability eliminates the need for separate systems for white-collar, blue-collar, or specialized workers.
Look for a VMS that streamlines the recruitment, management, and payment processes across all worker types. A unified system ensures consistency, reduces administrative overhead, and provides a complete view of your workforce, regardless of the roles you’re filling.
2 -Built-In RPO and Direct Sourcing Capabilities
Recruitment Process Outsourcing (RPO) and direct sourcing are becoming essential tools for contingent workforce programs. Many VMS platforms have started incorporating these capabilities, allowing companies to access pre-curated talent pools or directly source candidates.
The ability to source, hire, and pay the search fees related to your direct employee hires enables you to manage all staffing-supported needs via one system. Meanwhile, direct sourcing allows you to engage with workers who already have a relationship with your organization. This dual approach can reduce time-to-fill and costs while improving the quality of hires. Ensure your VMS provides seamless access to these features to stay competitive and efficient.
3 - End-to-End Req-to-Check Management
Managing the entire requisition-to-check process within one system is vital for program efficiency and compliance. A VMS should support every step, including requisition creation, candidate submission, interview scheduling, onboarding, time tracking, and invoicing.
This ensures no steps fall through the cracks and offers better control over the lifecycle of contingent workers. Additionally, having everything in one system reduces the risk of errors and increases visibility into crucial program metrics, helping you manage your contingent workforce program more effectively.
4 - Robust Reporting and Analytics
For contingent workforce programs of any size, data-driven decision-making is essential. A VMS with solid reporting and analytics capabilities can provide real-time insights into program performance, such as spend tracking, supplier performance, worker quality, and compliance.
Look for a system with customizable dashboards, automated reporting, and predictive analytics. These tools will help you identify trends, measure ROI, and make informed decisions to optimize your program. With robust analytics, you can gain opportunities for cost savings and efficiency improvements.
5 - Scalability and Ease of Use
While your program may be under $70M annually, your needs may grow over time. Choose a scalable and flexible VMS to accommodate future expansion without requiring an overhaul. At the same time, ensure the platform is user-friendly for program managers, hiring managers, and suppliers.
A simple, intuitive interface minimizes the learning curve, improves adoption rates, and ensures the platform is used to its full potential. Scalability and ease of use ensure your VMS can support your program's current and future needs without becoming a bottleneck.
Conexis VMS: Enterprise Solution. Mid-Market Focus
Conexis VMS is built for mid-market contingent workforce programs. Leveraging the latest technology, Conexis delivers the expertise, reliability and security of enterprise systems, while offering the flexibility, user friendliness and tailored service a mid-size organization requires. Conexis delivers enterprise level software - without the enterprise level complexity and cost for Mid-Market companies.
Getting Started with Vendor Management System Software
Learn more about the Benefits of a Vendor Management System and how to choose the right one for your organization. Download our Free VMS Buyer's Guide here:
Take the Next Step with Conexis VMS
Conexis is an award-winning VMS tailored specifically for mid-market contingent workforce programs. Leveraging the latest technology, Conexis delivers the expertise, reliability and security of enterprise systems, while offering the flexibility, user friendliness and tailored service you require. Conexis delivers enterprise level software - without the enterprise level complexity and cost.
Learn more about our Company and why organizations Choose Conexis VMS.
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Whether you are looking to change your VMS solution, or just getting started, we are here to help. Contact Us for a Free No-Obligation Consultation to discuss your workforce challenges (and get immediate actionable insights). See how easy Conexis is to use by taking a quick 2 minute Self-Guided Tour, or Book a Personal Demo Today!
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