There’s no doubt about it, the contingent workforce is growing fast. Every organization from small to large has some degree of non-traditional workforce spend budgeted in their finances. In fact, a staggering 77 percent of executives believe that freelance and gig workers will “substantially” replace full-time employees within the next five years, according to the 2020-2021 CXC Contingent Workforce Global Trends Report.
Within the next two years, says the report, it’s expected that 54 percent of all companies will include the contingent workforce as part of their strategic planning.
Yet despite the growing use of non-employee workers, many organizations still aren’t managing their staffing agencies correctly. Managed incorrectly, a lack of visibility and control over spend in the contingent workforce category can have a significant impact on a company’s profitability.
With that in mind, Conexis VMS has listed four best practices to help your organization manage its staffing agencies and get its contingent workforce spend back under control:
#1 - Use vendor management software
If your business is still managing its staffing agency program on manual spreadsheets, it’s almost certain that you have fragmented processes and a lack of centralization that's impacting the success of your contingent workforce.
With little to no visibility and control over your contingent workforce, your business is left with rogue spend, poor vendor decision making and lower workforce quality that reduces the ROI of your non-employee workforce program.
The good news? All you need is a vendor management system (VMS) to fix these issues. A VMS will centralize, automate and consolidate all of the processes and data associated with managing your staffing agencies in one web-based platform.
As a result, your organization will gain complete visibility into contingent workforce spend and vendor performance - ensuring you have the data you need to optimize your non-employee workforce.
#2 - Build a strong, and open, relationship with your vendors
Vendor communication doesn’t stop once a contract is signed and you’ve agreed terms. Your business is constantly adapting and that means your relationship with your staffing agency should adapt as well.
Keep communication channels open so that you can develop a strong, mutually beneficial relationship with your vendors. The better a staffing agency understands your current and future needs, the better the chance they have of sourcing the right workers.
#3 - Track the performance of your staffing agencies
There's a famous saying in the business world, “you can’t track what you don’t measure.” This is certainly true for any contingent workforce program. If you aren’t tracking vendor performance, then you’ll have no idea how your staffing agencies are helping you meet your workforce objectives.
To ensure you optimize how you use your staffing agencies, make sure you have the capabilities to track how they are performing. That includes everything from making sure they are delivering on time, at the quality promised and the predetermined price point agreed by both parties.
#4 - Regularly evaluate vendor risk
When you first initiate a relationship with a staffing agency, it’s typical that you set standards and agreements that they are expected to meet. This could be anything from meeting certain KIs such as time-to-fill, time-to-submit and turnover, as well as the standardized rates you set for sourcing non-employee workers.
It’s crucial that you evaluate vendor risk on a frequent basis to not only ensure that your staffing agencies are meeting your company’s expectations, but to also ensure hiring managers across your organization are engaging with staffing agencies using those standardized processes (as opposed to going awol and just paying what they think is the right amount).
Want to learn more about building a strategy to better manage your staffing agencies and how a VMS can help you do just that? Get in touch with Conexis VMS today for a free demo of our vendor management system platform.
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