The way organizations employ workers has shifted away from the full-time employees of yesteryear to a workforce of contingent workers that offer their specialties on a project-by-project basis.
The contingent workforce has significant benefits for the plethora of companies adopting this modern way of hiring. However, those who are hiring contingent workers but are still using manual processes and outdated automation tools to manage their workforce, will not be realizing those benefits, and could in fact be losing out.
This is why a vendor management system (VMS) is fundamental to the success of your contingent workforce management strategy.
What is a VMS?
A vendor management system is a web-based cloud or SaaS application that acts as a central hub and system of record for your contingent workers. It will help your business procure, manage and pay the contingent workers that you sourced directly, through staffing agencies or through strategic service providers.
A VMS will help your organization automate and streamline the critical processes that support the sourcing, acquisition, management and payment of your on-demand workforce.
Simply put, it helps centralize the complex issues surrounding staffing. This means providing a better solution for everything from requisitions (request for services), candidate selection, on-boarding, compliance, approvals, time management, scheduling, expense management, payments and reporting.
VMS technologies can also provide extensive reporting functionality and features to support your human capital strategies and objectives, as well as allow you to forecast future needs and deal with any potential issues that may arise with your contingent workers.
What does all this mean? It means your company will have all the tools required for the proper management of your contingent workforce, resulting in decreased labour costs, increased efficiencies, better communication with your temporary workers and higher revenue.
How do I build a VMS business case?
Now that you know a vendor management system is the way to go, the next step is to create support within your organization. As a HR or procurement professional you probably know the benefits of VMS implementation, but if no one else thinks it’s important then the request to implement may not receive a high priority or budget.
Creating a compelling business case for VMS implementation will be the key to changing their minds.
Here’s four tips to create your case and gain the approval of stakeholders within your organization:
1 - Assess your current workforce management processes
The first step of creating a successful business case for VMS implementation is to understand the strengths, gaps and areas for improvement in your current management processes. If you are unable to fully assess your current processes, and the associated challenges, the opportunity will not be understood by other decision makers.
Learn everything about the current inefficiencies of your workforce management process. This will include issues such as rogue spend, wasted time, extra and unnecessary administrative efforts, inconsistent hiring techniques, compliance issues and an overall look at what is possibly a fragmented process.
2 - Socialize and create support
Once you start working on your business case, it’s important that you identify key stakeholders within your business and engage them with your intended plans. Let them provide their insight and learn about the goals they would expect to see from a VMS.
Stakeholders are far more likely to support the adoption of a VMS if they understand how the technology will help them and the organization as a whole.
3 - Define specific goals and objectives
Organizations need to balance investment in technology against returns on investment. To determine ROI the exact benefits of the implementation needs to be quantified. You should make a clear and detailed list of the benefits and objectives you seek from a vendor management system so that ROI can be estimated.
There are many benefits but the most common will include:
- Cost savings - Avoid paying above-market pay rates and staffing supplier markups, and use in-depth reporting to evaluate current talent spend.
- Visibility and transparency - Minimize “rogue” spending by departments and enable measurement of staffing supplier performance.
- Talent quality - Optimize the talent pool by enabling more staffing supplier options.
- Reduced compliance risk - Follow consistent processes to ensure full compliance with federal, state and local laws and standards.
- Increased efficiency - acquire higher-quality workers over a shorter timeline, more easily.
4 - Partner with a trusted advisor
Before you can implement your VMS, you’ll need to select with a technology provider that supplies the right software for your company, to help achieve your stated objectives and beyond. Not all VMS providers are equal, some will generate better results than others, some may be more compatible with your IT ecosystem, while others may be more user-friendly.
As a technology-neutral MSP, HCMWorks can help you make the right decision and select the most compatible Vendor Management System based on your unique specifications and needs.
Not only that, but our vast experience and long dated partnerships working with different VMS technologies offers us the distinct ability to help you optimize your current VMS systems and improve your overall workforce management program.
Ready to learn more about how HCMWorks can help in your VMS decisions? Contact us today.