Vendor Management System Success
A special thank you goes out this month’s Leadership Sponsor, Zoho Recruit. Please visit their site to understand how their quality services can elevate your recruitment practices.
VMSs have recently become a highly in-demand HR technology as the number of contingent workers, and the demand for them continue to rise. Data from the Bureau of Labor Statistics (BLS) revealed that the number of temporary workers has increased by 29% since late 2009. The BLS also forecasts that the contingent workforce will continue as one of the fastest growing workforce segments with a projected increase of 23% in the decade from 2010-2020, at which point the contingent workforce will be 3.3 million strong.
The rate at which the contingent workforce is growing, has increased the need for organizations to acquire systems and processes to manage all of these temporary workers, and that is where Vendor Management Systems come in. Talent acquisitions, payroll, onboarding and even background checks are performed differently and separately from the traditional workforce. Without a central system to handle the lifecycle of a contingent worker, each step and process becomes more and more inefficient.
It hasn’t only become a necessity to have a VMS; many companies learned quickly that it is vital to have a good VMS. A successful Vendor Management System is going to have some features that drastically set it apart from the standard.
Reduced Costs Associated with Contingent Workforce Management
It might be called the “bottom line”, but it is the first thing that employers and leaders consider cost. 41% of survey respondents consider controlling costs the number one priority in contingent workforce management.
The mark of a successful VMS will undoubtedly be the proven monetary savings and gains accrued from reduced time-to-hire, higher quality workers, the ability for those workers to produce quicker, seamless onboarding and an all around efficient, time saving processes.
Proper Onboarding and Offboarding
Of the 89% of high performing organizations that use VMS technology, 75% report a more streamlined onboarding and offboarding process. Employers worldwide know the difference that a good onboarding program can make in the worker lifecycle, yet the onboarding process is quite often overlooked as a waste of time for contingent workers. It’s the same story for offboarding these temporary workers. A successful VMS will ensure compliance of every contingent worker through proper onboarding and offboarding processes.
Reduced Staffing Time
This highly efficient tool drastically reduces the time-to-fill for contingent workers because it puts the procurement of these workers in the hands of a separate dedicated team, whether that be a staffing company, recruiters, consulting companies or other vendors. Once the software (the VMS) distributes the job requirements to the dedicated team, they then handle the interviewing and hiring processes, as well as payment. The VMS method is far more efficient than the traditional handling of multiple vendors through a decentralized or non-existent system.
Source Higher Quality Contingent Workers
Because this process is now in the hands of a dedicated team, specialized in the procurement and management of the contingent workforce, they have access to a broader and more targeted talent pool. The entire system lends itself to the acquisition of higher quality talent. The standard HR department is not equipped to handle and understand the organization’s contingent workforce needs.
Enables Talent Forecasting
Organizations that use VMS technology are 33% more proactive with planning and budgeting. Like with any disjointed process, once order and efficiency are introduced, you can become less reactive, and more proactive. When department or project leaders no longer have to scramble to play catch-up, they can be looking into the future, and forecast their talent needs well ahead of the curve. With companies using VMS technology reporting up to a 70% increase in organizational efficiency, there is now time to be proactive about talent gaps and special projects.
Consolidated Invoicing
In 2012, one in four workers were contingent labor. Some of these workers came to their organization through recruiters, independent vendors, staffing companies, or a myriad of other places. Instead of receiving a different invoice, from a different company for each one of 25% of your workforce, a successful VMS will consolidate all labor approval, billing and payroll.
Objectively Measure Staffing Provider Performance
With a quarter of the workforce coming from different staffing providers, it is vital to know which providers are performing and which aren’t. A successful VMS will objectively measure and rate each staffing provider to find out where the quality labor is coming from, and where it most certainly is not. Using the VMS to measure staffing provider performance also promotes staffing vendor neutrality.
Increase Contingent Worker Productivity
A great VMS doesn’t only procure this contingent talent; it will ensure the efficient management of them as well. Through streamlined onboarding, faster time-to-fill, proactive project management and greater manager visibility across subsets of the contingent workforce, these temporary workers make the most of their time with the company, and they do it faster.
44% of the top performing organization that use VMS technology are able to hold real-time reviews of project milestones. The ability to dedicate resources to goal alignment ensures that the contingent workforce is working at optimal productivity. Additionally, a superior VMS will guide leadership on how to best use this talent. For instance, departments can share this contingent talent for maximum utilization.
In 2012, staffing managers spent about half of their time dealing with issues related to their contingent workforce. Seeing as how the contingent segment of workers represents only 26% of the total workforce, the time that that these staffing managers are dedicating to contingent workforce matters is off kilter.
It is obvious that this rising segment of workers needs processes and systems dedicated to their specific supply chain and talent lifecycle. Vendor Management System success is all about finding the solutions for your organization’s unique needs. The more robust systems can handle an array of different industries and sizes, but your common VMS might not have all the integration and features that your specific organization needs.
Vendor Management Systems are not an up and coming HR technology, they are a current necessity for any business with a significant contingent workforce. Beyond that, as the contingent segment of workers continues to grow, those companies who haven’t considered a VMS just yet, might find themselves behind the curve. The way the numbers are headed, it could be considered a serious competitive advantage to have a fully integrated VMS established before it is needed.
A special thank you goes out this month’s Leadership Sponsor, Zoho Recruit. Please visit their site to understand how their quality services can elevate your recruitment practices.