Use of the contingent workforce is growing at a rapid pace. According to a US Government Accountability report, 40 percent of the US workforce is made up of contingent workers, with the average organization having 18 percent of their workforce employed on a contingent basis.
In fact, according to a recent project by Upwork (as reported in this Forbes article) it is estimated that the percentage of freelance and contingent workers in the US workforce could be as much as 50 percent by 2030.
But as organizations continue to expand their use of the contingent workforce, their need for technology to underpin a highly-strategic program becomes essential. In fact, contingent workforce management software is essential to a successful program.
Why is technology important for managing a contingent workforce program?
It’s an unfortunate reality, but most organizations struggle to manage their contingent workforce. Traditional HR and procurement practices are simply not equipped to handle the unique aspects of managing a contingent workforce program.
This is particularly true for businesses with smaller volumes of contingent workers. Instead of implementing new practices and processes to manage their contingent workforce, they instead manage contingent workers and the staffing agencies they use to source them using emails and manual spreadsheets.
These manual spreadsheets are prone to human error, become lost across departments and are easily buried in long email chains. This gives a business no visibility or control over how their contingent workforce program is performing.
That’s why technology is so important. The right contingent workforce management software can provide a holistic view of a company’s external talent and the staffing agencies that businesses engage with to source those workers.
What is contingent workforce management software?
So that begs the question, what is contingent workforce management software and what technology will work best for your business.
There are a few different systems that companies use to manage contingent workers, these include:
Freelancer management system: A freelancer management system (FMS) is designed specifically to store and manage information regarding freelance talent. These systems are typically used by businesses with virtually no contingent workforce spend and have no need for the implementation of a highly-strategic contingent workforce program. These businesses manage a very small number of freelancers.
Human resources information system: In some cases, businesses attempt to use their traditional HR platform to recruit, track and manage their contingent workforce. Since these technologies are designed for employees, using a HRIS as your contingent workforce management software can bring a range of risks to your organization - particularly in regards to compliance.
Direct sourcing technology: Direct sourcing is a contingent workforce strategy where companies build their own pool of contingent talent that can be engaged without the traditional use of a staffing agency. Direct sourcing technology helps manage this pool of workers - but it can’t be used to manage an entire contingent workforce program.
While all of these technologies are great systems for their core focus, they aren’t technologies that will give you a holistic view of your entire contingent workforce program. In this case, a vendor management system is always the right choice.
Why a vendor management system will significantly improve your contingent workforce program
A vendor management system, also known as a VMS, is a contingent workforce management software that gives a business complete visibility over their contingent workforce program - centralizing all contingent worker and staffing agency information into one location for full insight into program performance and spend.
The use of a VMS allows businesses to create a standardized company-wide approach to engaging, sourcing and managing both staffing agencies and contingent workers. Through reporting and analytics, a vendor management system gives businesses the visibility they need to make continuous program improvements that increase ROI.
Through the implementation of a vendor management system, companies can achieve:
- Improved efficiencies through process automation
- Analytics that improve contingent workforce program decision making
- Improved visibility and control over program performance
- Reduced contingent workforce program spend
- Better ensure compliance within your contingent workforce program
Are you interested in learning more about why a vendor management system is the right contingent workforce management software for your business?
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