The Important Role a VMS Plays in Managing your Contingent Workforce

In today’s dynamic business environment, effective people management is crucial for maintaining a productive and engaged workforce. One of the most powerful tools at an organisation’s disposal for managing its contingent workforce is a Vendor Management System (VMS). This technology solution streamlines the processes involved in managing external talent, from recruitment to offboarding, and plays a pivotal role in optimising workforce management. Here’s a closer look at the important role a VMS plays in people management.

What is a Vendor Management System (VMS)?

A Vendor Management System (VMS) is a software application that facilitates the procurement, management, and administration of temporary or contingent workers. It acts as a centralised platform where businesses can interact with staffing agencies, manage contracts, track worker performance, and ensure compliance with labour laws. By integrating various aspects of workforce management, a VMS provides a comprehensive solution for handling the complexities of engaging and managing a flexible workforce.

Enhancing Efficiency and Reducing Costs

1. Streamlined Recruitment: A VMS automates and simplifies the hiring process for temporary and contract workers. By providing a centralised platform for job postings, candidate submissions, and application tracking, it significantly reduces the time and effort required to fill positions. This efficiency not only speeds up the recruitment process but also reduces costs associated with prolonged vacancies.
2. Centralised Vendor Management: Managing multiple staffing agencies can be cumbersome and time-consuming. A VMS consolidates interactions with all vendors into a single platform, making it easier to track performance, negotiate contracts, and ensure consistent service levels. This centralisation leads to better vendor relationships and more favourable terms, ultimately reducing costs.
3. Optimised Workforce Planning: With a VMS, businesses can gain insights into workforce trends and demands, allowing for more accurate forecasting and planning. This ensures that the right number of workers with the right skills are available when needed, reducing the risk of overstaffing or understaffing.

Improving Compliance and Risk Management

1. Ensuring Regulatory Compliance: Labour laws and regulations can be complex and vary by region. A VMS helps ensure compliance by tracking worker documentation, managing contracts, and providing alerts for any regulatory changes. This reduces the risk of non-compliance and associated penalties.
2. Standardising Processes: A VMS standardises the processes involved in engaging and managing contingent workers, from onboarding to offboarding. This standardisation ensures that all workers are managed consistently, reducing the likelihood of errors and improving overall efficiency.
3. Mitigating Risk: By providing visibility into all aspects of contingent workforce management, a VMS helps identify and mitigate potential risks. This includes monitoring worker performance, tracking compliance, and managing contracts. Proactively addressing these risks ensures a more stable and reliable workforce.

Enhancing Visibility and Reporting

1. Real-Time Data Access: One of the key benefits of a VMS is the ability to access real-time data on the contingent workforce. This includes information on worker performance, vendor performance, contract statuses, and overall workforce trends. Such visibility enables informed decision-making and strategic planning.
2. Comprehensive Reporting: A VMS provides detailed reports on various aspects of workforce management. These reports can be customised to meet specific business needs and provide insights into areas such as spend analysis, workforce productivity, and compliance. Comprehensive reporting allows businesses to identify areas for improvement and make data-driven decisions.
3. Performance Metrics: By tracking key performance metrics, a VMS enables businesses to measure the effectiveness of their contingent workforce. This includes evaluating individual worker performance, vendor performance, and overall workforce productivity. These metrics help in making informed decisions about worker engagement and vendor partnerships.

Supporting Strategic Talent Management

1. Talent Pool Management: A VMS helps build and manage a pool of pre-vetted candidates who can be quickly deployed when needed. This reduces the time and effort required to find suitable candidates for temporary roles and ensures a consistent supply of talent.
2. Enhanced Collaboration: By providing a centralised platform for managing contingent workers, a VMS facilitates better collaboration between different departments and stakeholders. This ensures that everyone involved in the hiring and management process is on the same page, improving overall coordination and efficiency.
3. Scalability: As businesses grow and their workforce needs change, a VMS provides the flexibility to scale operations up or down. This scalability ensures that the system can adapt to changing business requirements and continue to provide effective support for people management.

Conclusion

A Vendor Management System (VMS) plays a critical role in modern people management by enhancing efficiency, ensuring compliance, improving visibility, and supporting strategic talent management. For businesses that rely on a contingent workforce, implementing a VMS can lead to significant improvements in workforce planning, cost reduction, and overall productivity.

By leveraging the capabilities of a VMS, organisations can better manage their external talent, build stronger vendor relationships, and make more informed decisions about their workforce. As the business landscape continues to evolve, the importance of effective people management will only increase, making a VMS an essential tool for any forward-thinking organisation.

If you’re considering implementing a VMS, start by assessing your current workforce management processes and identifying areas where the system can provide the most value. With the right approach, a VMS can transform your people management strategy and drive your business towards greater success.

Did you know how much a VMS can help you?

1. Cost Savings: Organisations that use a VMS report up to 10-20% cost savings due to more competitive bidding and better rate visibility.
2. Process Efficiency: A VMS can reduce the time it takes to fill a position by up to 50%, thanks to streamlined processes and a centralised talent pool.
3. Compliance: Companies using a VMS have seen a compliance increase to over 90%, significantly reducing legal risks and associated costs.
4. Spend Under Management: With a VMS, businesses can bring 65-75% of their contingent labour spend under management, leading to better budgeting and forecasting.
5. Quality of Hire: Improved vendor selection and performance tracking can lead to a 15% improvement in the quality of contingent workers.
6. Administrative Efficiency: Administrative tasks related to contingent workers can be reduced by up to 30% with the automation features of a VMS.
7. Streamlined Invoicing: A VMS automates invoice generation and delivery, improving accuracy, reducing administrative time by up to 25%, cutting invoicing costs by up to 10%, speeding up payment processing by 30%, and providing detailed reconciliation reporting for accurate financial records.

Get in touch today if you'd like to find out how Retinue can help you manage your contingent workforce with a VMS.