More and more, companies are continuing to leverage a non-employee workforce. Employing this area of labor offers many benefits including increased flexibility and scalability, along with costs savings. However, the risks and complexities of sourcing and managing non-employee workers can be daunting.
When managing a contingent workforce program, companies have to deal with and accommodate the priorities and needs of various parties. Hiring managers want to find workers with the right skillsets and bring them onboard as quickly as possible. Procurement officials are concerned with lowering cost and managing spend. HR professionals want to ensure worker quality and compliance. IT personnel need to ensure that any technology selected can be supported, will work with other applications, and will not threaten the security of the company. Executive management is focused with a total talent management strategy that aligns with business goals.
While many human resource software providers offer basic tools to track contingent workforce populations, and to meet payment and hourly compliance requirements, they lack detailed and sophisticated management options. Because non-employee workers are paid differently and operate under different employment rules, it’s important to track them using a different talent management tool. Vendor Management Systems (VMS) offer a flexible approach to manage contingent workforces. Most VMS software automate the end-to-end life cycle of managing an organization’s contingent workforce and the suppliers who provide them. Most are cloud-based and offer tools to track time and deliverables, as well as analytics and forecasting features so companies can manage contingent labor costs and better align workers with projects.
Often VMS is associated simply with the management of agency-supplied contractors, rather than independent contractors or Statement of Work project teams. However, advanced VMS technologies are able to support an effective management program that handles the complexities and requirements of all non-employee labor. The primary mission of VMS goes beyond simply managing spend, and real value is achieved through improving efficiencies in operations in all areas.
A good VMS technology that will result in a successful contingent workforce program takes into account the multiple priorities of all the stakeholders, and delivers a solution that meets the single shared goal of eliminating complexity to increase operational effectiveness.
Beyond HR & Procurement
Beyond an organization’s internal stakeholders, the concerns and requirements of external stakeholders also need to be considered. Companies often have staffing suppliers and contingent workers already in place, with whom they want to maintain successful relationships. Sometimes, organizations already have a third-party company in place as the Managed Services Provider (MSP).
When compiling requirements to be incorporated into a VMS, companies and VMS providers should also consider the perspective of other parties, such as their MSP. Often it is the MSP who serves as the primary user of the system and this major stakeholder should be involved in the technology selection and implementation process.
In order to combat staffing agency resistance, companies can select a VMS that is vendor-neutral, and has features that will be beneficial to suppliers, such as automated billing and other processes that will reduce supplier costs and efforts. And during implementation, organizations should ensure that there is a well-defined plan for supplier training, clarify payment terms, and clearly communicate the requirements distribution system.
Selecting the Right Technology
Understanding that a good VMS solution will fulfill the organizational goal of operational effectiveness while also addressing the priorities of the various stakeholders makes selecting a VMS that meets business needs less challenging. All good VMS provide the same level of basic features:
Looking beyond these standard features, some industry leading technology providers offer innovative solutions that assist in workforce composition, peer benchmarking, big data workforce intelligence, social sourcing, and online talent exchanges that include alumni, retirees, and interns.
Strong Vendor Management Systems provide companies with all-in-one capabilities, with flexible administration, intuitive user experiences, business intelligence, decision support, and anytime access.
The Typical VMS Platform
Socially Recruiting Non-Employee Workers
Social recruiting has been gaining traction in various industries. Recent research studies show that 73 percent of companies have used social media to make hires. Social recruiting offers many advantages including higher quality candidates and lower time to hire. Companies today are increasingly using social media platforms to find the talent that suits their needs. Staffing companies are embracing social search capabilities to gain visibility with a large number of job seekers.
DCR Survey: What’s Holding You Back from Using Social Recruiting Technology?
Results from a DCR Workforce survey reveal that the largest issues holding companies back from using social recruiting technology is candidate screening, the risk of misclassification, and quality of candidate pool. To overcome these challenges, companies should look for a VMS that assures a unified talent management system with a pre-vetted pool of talent, and includes screening and classification compliance within its benefits.