The number of companies using contingent workforce has increased dramatically over recent years, as businesses aim to improve their workforce agility, beat their competitors to talent and better achieve their workforce objectives. Yet despite this, many businesses still suffer from one huge challenge: They lack visibility into how much they are spending on their contingent workforce.
A large number of businesses, particularly those with smaller contingent workforce volumes, don’t have the management practices, technology or processes in place to properly capture and track all of their contingent workforce spend.
In fact, according to a study from Ardent Partners, nearly 60 percent of all contingent spend is unaccounted for in financial planning, forecasting and budgeting within the average organization.
So, why does it matter and how can your organization gain complete visibility and control over contingent workforce spend? We answer all of your questions in this blog, so that you can build a cost-effective contingent workforce management program.
Why do businesses lack visibility into contingent workforce spend?
You can’t manage what you can’t measure, right? That’s typically the case for the contingent workforce of a large number of businesses.
This typically isn’t an issue for large enterprise organizations which have the resources to hire either specialized internal teams or outsourced contingent workforce MSPs specifically designated to manage their contingent workforce program.
These large organizations have high contingent workforce volumes and high spend, making the investment into a highly-strategic management program incredibly cost-effective for the business.
For businesses with smaller contingent workforce volumes, it has often felt like there was no real ROI on investing in proper contingent workforce management. Instead, these companies manage their contingent workers on time-consuming manual spreadsheets.
But this results in a complete lack of visibility and control over contingent workers.
These spreadsheets are vulnerable to human error, they get saved in multiple locations across different departments leading to inaccurate figures, inefficient processes and rates that aren’t standardized, and they even get lost.
The result? Contingent workforce data is saved across a number of spreadsheets under the same name, with no one in the organization knowing which is the right document to use. Even worse, contingent workforce information is only saved through emails, and never even entered on the spreadsheet in the first place.
With no centralized place for contingent workforce data to be saved, businesses completely lack visibility into their contingent workforce spend.
Why not knowing your contingent workforce spend is a problem
When your business doesn’t have the technology and processes in place to gain visibility into contingent spend, then rogue spend will run through your business and impact your bottom line. Rogue spend is any contingent workforce spend that isn’t accounted for, or approved, within your contingent workforce management program.
When you aren’t accounting for spend, then your business has absolutely no visibility into how much you are spending on contingent workers and no way of measuring your contingent workforce performance.
This will prevent you from answering some key questions around contingent workforce spend that improve your program, including:
- Are you paying market rates for your contingent workers?
- Are your hiring managers paying staffing agencies the predetermined standardized rates?
- Are your rates consistent across your entire business?
- Are all of our contingent workers being classified correctly?
Using a vendor management system gives your business the visibility and control it needs
Are you looking for a better, and cost-effective, solution that gives your business complete visibility into contingent workforce spend so that you can make program changes that reduce costs and improve workforce quality?
That solution comes in the form of a vendor management system.
A vendor management system, also known as a VMS or VMS software, is a cloud-enabled software platform that centralized and automates the entire lifecycle of managing contingent workers and staffing agencies - from source to pay.
By consolidating all of the processes and data associated with contingent workforce management into one central location, businesses gain complete visibility into their contingent workforce spend and where program improvements can be made.
- Read More about VMS Pricing and ROI
➡️ Save Money with Conexis VMS' Unique Pricing
➡️ 5 Vendor Management Best Practices to Maximize ROI
➡️ Vendor Management Software: What's the Cost & ROI?➡️ How Much Does a Vendor Management System (VMS) Cost?
➡️ How a VMS Lowers Contingent Workforce Cost➡️ The Top 10 Questions to ask a VMS Provider about Pricing: VMS Buyers Guide Checklist
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!
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