Today, 80 percent of large US corporations plan to increase their use of a “flexible workforce'' in the coming years, with contingent workers making up over 40 percent of the total workforce
(Intuit). Yet, despite its size, the contingent workforce has been associated with “non-core” business functions, resulting in organizations failing to effectively and efficiently manage their contingent workforce programs.
The vast majority of businesses have no real contingent workforce management program in place. Instead, they manage their contingent workers and staffing agencies on spreadsheets, with no company-wide processes in place.
This results in two huge problems. Firstly, the company has a complete lack of visibility and control over its contingent workforce, with no insight into where externally-sourced workers are being hired and for how much. Secondly, the business suffers from rogue spend, with no standardization for how much hiring managers should be paying staffing agencies.
Thankfully, there’s an easy solution to consolidate your entire externally-sourced workforce program into one centralized platform. A vendor management system.
In this blog, we take a look at five reasons why a vendor management system (also commonly known as a VMS) is a priority for any organization with contingent workforce spend.
The implementation of a VMS helps organizations reduce costs when it comes to their contingent workforce. Through improved program visibility, businesses are able to see where they are overspending on staffing agencies, where hiring managers aren’t following standardized processes and rates for hiring contingent workers, and where staffing agencies are falling short on their deliverables.
In fact, Staffing Industry Analysts' “Workforce Solutions Buyer Survey: 2020 Americas Results” found 76 percent of companies had experienced savings through the use of a vendor management system.
To truly align your company’s contingent workforce program with your broader goals and strategic initiatives, you need to move away from a fragmented approach to managing your externally-sourced workforce and instead focus on unifying it across all team leaders.
By creating and implementing strong processes, and bringing those all into one company-wide approach through the use of a VMS, your business will be able to optimize its contingent workforce to help meet your overarching business objectives.
With ‘The Great Resignation’ making it even more competitive for businesses to fill open positions, non-employee workers are a crucial pipeline to help companies augment their permanent workforce and access top talent.
VMS software offers organizations the insights they need to monitor and track staffing agency performance. This unique visibility into staffing agency performance allows companies to ensure they are partnering with the best vendors for top talent acquisition.
The contingent workforce comes with a range of risks associated with worker misclassification and co-employment laws. Incorrectly identifying the relationships between your business and its externally-sourced workers can lead to fines and penalties.
A vendor management system provides companies with the centralized database they need to document their contingent workforce data and ensure they aren’t falling foul of their local regulations.
The current workforce shortage means your business needs to act fast. When you have an open position, you need to beat your competitors and fill it as soon as possible. One of the most important KPIs to achieve this is time-to-fill.
A vendor management system will help your business improve its relationships with staffing agencies, ensuring they are able to tap into the right talent quickly and outpace competitors in finding top talent.
Interested in learning more about Vendor Management Systems?
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!