21 Apr How to Modernize Your Contingent Workforce with Contingent Workforce Technology
Rapidly changing technology is transforming the future of work with exponential computational power driving the world and workforce into the Intelligence Revolution. To drive the business forward, organizations must harness the power of artificial intelligence (AI) and subset automation and machine learning (ML) technologies, in conjunction with human capabilities, to manage their contingent workforce and achieve enterprise-wide total talent management.
Whether an organization is operating locally or globally, the economic impact of the coronavirus (COVID-19) has produced an uncertain business landscape that requires employers to adapt to the unexpected in order to be successful.
For many organizations, this means augmenting their traditional workforce and full-time employees with the flexibility offered by contingent workers. In fact, 32% of organizations are planning on transitioning roles historically filled by traditional employees to roles filled by contingent workers as a post-COVID-19 strategy that saves on costs.
The rise of the contingent workforce can result in decreased visibility and increased risk
For many employers, the rise of the contingent workforce comes with decreased visibility into their contingent workforce program. A Fieldglass report notes that only 40% to 47% of business executives consider themselves highly informed about compliance, contingent workers’ responsibilities, tenure, quality of work, headcount, and access to facilities.
To ensure an effective and compliant contingent workforce in the future, it’s essential to have the right technology platforms in place right now.
The following information regarding technology and contingent workforce management will provide insights into the platforms employers need to achieve total talent management.
Contingent workforce technology: What is a Vendor Management Systems (VMS)?
More than 70% of organizations, including Fortune 500 and Global 1000 companies, have a VMS in place to manage their contingent workforce.
A VMS is a cloud-based technology software platform that helps to facilitate the process of contingent workforce procurement and contingent workforce management. Employers who invest in VMS technology will streamline vendor performance to better manage labour costs, maximize productivity, ensure compliance, and increase efficiency.
Why a VMS is critical to contingent workforce management
A VMS is also essential to achieving total talent management across an entire organization.
The data and analytics capabilities of a VMS enable organizations to make better enterprise-wide decisions. The management system gives users direct access to the information that allows employers to gauge the success of their programs and make adjustments accordingly.
The AI technologies that drive a powerful VMS
Technology solutions that include self-learning or smart algorithms can be considered AI. The terms below include technologies like:
- Artiﬁcial Intelligence (AI): Algorithms exhibiting any “smart” behaviours.
- Machine Learning (ML): Algorithms that identify patterns and use these patterns to predict outcomes or make decisions.
- Natural Language Processing (NLP): Algorithms that can interpret, transform, and generate human language.
- Robotic Process Automation (RPA): Algorithms that mimic human actions to reduce repetitive, simple tasks. RPA is generally not considered a form of AI.
Contingent workforce management VMS technology opportunities
When organizations have the right VMS technology solutions, employers can gain better control over their contingent workforce management with the following:
End-to-end visibility over the entire contingent workforce
A VMS provides employers with total transparency over their workforce. The information gathered within a VMS grants visibility into who is working for the organization, where the workers are performing the work, and the process involved to perform the work.
This valuable information provides employers with contingent workforce management insight into the value of each resource—ultimately increasing cost savings, improving worker performance, and mitigating risk by enforcing compliance.
Contingent workforce cost savings
One of the most significant benefits of a VMS is saving on contingent workforce costs. This is in addition to managing vendors from a central data hub that allows employers to save in various ways. The information assessed within the VMS technology allows employers to do the following:
- Tap into talent pools already within the system—saving on additional recruitment costs and time to hire.
- Manage payroll and flag errors in overtime pay and higher than usual rates.
- Provide insights into rate cards in order for employers to make better data-driven hiring decisions.
- Gain access to predictive analytics that provides actionable suggestions for contingent work and contingent worker savings.
Automate and streamline contingent workforce management processes
Vendor management solutions will guide users step-by-step through each process associated with procuring external resources. From creating a requisition to offboarding, vendor management software will seamlessly complete each task and process. With automation eliminating tedious administrative responsibilities, organizations can save time and money with vendors.
Accurately track applicants
A VMS has powerful applicant tracking capabilities that create a more efficient hiring process across all areas of an organization. With automation tackling the administrative tasks associated with onboarding, offboarding, and all other tasks, employers have access to hiring analytics and the ability to reject or accept any information in the workflow.
Reporting and analytics on contingent workers
A VMS allows organizations to gather comprehensive information on their contingent workers and workforce management program. Employers will have access to information that can accurately evaluate costs, time to hire, candidate quality and quantity, and the organization’s exposure to risk. These data-driven reports allow organizations to evaluate their numbers against the competition.
Efficient processes and compliance
A VMS will ensure processes and procedures are consistent across all areas of an organization’s departments and locations—even if their contingent worker programs are managed independently. This capability not only sets the standard approach to management but also ensures that organizations are compliant with local legislation.
Through a VMS, organizations can track pre-defined performance metrics during the duration of the contract(s) with vendors. This enables employers to gain greater visibility into their vendor relationships and has more control over the selection of their vendors. A vendor management solution that integrates with a VMS can give employers confidence in the quality of services that are being delivered.
Stronger vendor relationships
The relationships employers foster with vendors are just as important as the performance of vendors, and employers should continuously work to strengthen these relationships. A VMS will track the performance of vendors, yet it can also solidify relationships with these external partners as well. With the effective management of vendors, business leaders can create mutually beneficial processes that build the trust and loyalty needed to keep great vendors as part of the organization’s talent supply chain.
Greater administrative efficiencies
While vendor performance is a significant benefit of a VMS, additional benefits of vendor management include greater administrative efficiencies.
Acting as a central hub for vendor data and records management, a VMS can eliminate data duplication, cut down on administrative costs and clerical errors, while ensuring compliance and better business practices. VMS technology will also help employers better manage relationships with their vendors by ensuring heightened efficiencies and compliance.
Decrease in time to hire
Time to hire is one of the most important hiring metrics for recruiters and hiring managers. VMS technology will give employers access to automated sourcing solutions that will find talent quickly and effectively. This will not only decrease the time to hire, but also create a better experience for candidates.
Ensuring the seamless integration of technology
According to a report by Fieldglass, a familiar pattern emerges with procurement professionals. The study finds that just over half of procurement executives are highly informed about the responsibilities of the service providers. Additionally, even less are informed of the duration of work, access to facilities, systems and confidential information, work quality, progress against milestones and/or deliverables, and compliance with licenses and certifications.
Integrating the VMS into your organization’s IT ecosystem—including human resources (HR) systems, procurement, supplier systems, access/credentialing systems, and enterprise resource planning (ERP)/accounts payable (AP) tools to start—will provide a seamless end-to-end process.
If you’re considering a VMS or are re-evaluating your current system, then significant operational changes can require a new management solution as you remodel your blended workforce. A managed services provider (MSP) will support these changes across the entire contingent workforce.
VMS technology and total talent management
VMS technology grants employers the ability to gain control over their workforce while also helping to achieve total talent management in a global and digital economy.
The best technology platforms will break down silos that exist between HR and procurement departments, which are key to achieving total talent management.
While HR will track performance metrics like vendor engagement and vendor retention, procurement key performance indicators (KPIs) will focus on metrics like vendor cost and vendor risk. As such, it’s critical for each function to identify and embrace a shared business goal.
Breaking down silos
This means breaking down the silos between departments to understand what drives the other business function and what objectives they must meet. Understanding the needs of both business functions and connecting priorities encourages each one to work towards their common performance goal: filling skill gaps with high-quality workers in the most cost-effective manner.
A VMS can provide the transparency that HR and procurement departments need to ensure that their business successfully engages and manages both full-time employees and contingent workers with the same processes, protocols, and efficiencies across the entire business supply chain.
Maximizing the value of engagement and performance metrics
With true collaboration between HR and procurement business functions and the implementation of the right technology, business leaders can maximize the value of all full-time and contingent engagements and performance metrics across the entire talent supply chain process.
Do you want to gain deeper insights into VMS technology?
Download our free case study to learn how Flextrack’s VMS technology helped one client partner save on contingent workforce costs and more.