In the dynamic landscape of the contingent workforce industry, vendor management systems (VMS) have emerged as powerful tools for organizations seeking to optimize their workforce management and tap into a diverse pool of skilled professionals. However, amid the growing significance of VMS, misconceptions and myths have emerged, causing some organizations to doubt whether VMSes will, in fact, be able to handle their extended workforce.
This article lists the six most common misconceptions we’ve heard about vendor management systems. They come after discussions with a diverse team of professionals, including account managers and contingent workforce experts. The article aims to debunk these myths and provide clarity on the benefits of VMS software in managing the contingent workforce.
Myth #1: Managing contractors in a VMS automatically creates a co-employment risk. When collaborating with contractors employed by an external organization, such as a staffing firm, incorporating a VMS won’t introduce any additional risks compared to your existing arrangement with the supplier. On the contrary, it helps mitigate risks by providing you with improved transparency regarding the individuals currently engaged in your projects. Additionally, the system restricts open requisitions solely to approved vendors within your VMS, which ensures that they have successfully passed your regulatory prerequisites.
Myth #2: A VMS is too expensive. Many clients who utilize a VMS pass on the cost to their staffing vendors. While a client may be concerned that vendors will increase their prices to compensate for the VMS implementation, it’s important to note that vendors are typically accustomed to participating in various programs that involve costs.
By implementing a VMS, an organization gains the ability to closely monitor costs and ensure that any attempts to increase fees are kept in check. The VMS serves as a tool for cost control. It enables companies to maintain transparency and oversight over expenses related to their contingent workforce. This way, the client can effectively manage costs and prevent any unjustified price hikes from vendors.
Myth #3: A VMS would take control away from the organization’s existing procurement process. Leading VMS technologies are designed to be easily configurable and adaptive to all types of workflow processes, including accommodating required approvals. Usage of a VMS helps avoid instances of “rogue spend” (spending outside of the negotiated contracts with staffing suppliers) that you may not currently be aware of within your program.
Myth #4: You can’t get detailed reporting from a VMS. Leading VMS technologies leverage a robust reporting system that utilizes thousands of data points from within the tool, allowing for complete transparency into every aspect of the program.
Myth #5: Adding a VMS is just another system that you’ll need to access and re-enter the same information from other systems. In most cases, organizations need more than one system to handle their contingent workforce, from Human Resource Information Systems (HRIS) to Applicant Tracking Systems (ATS). Although it may initially seem like a redundant task to enter the same information into a VMS, this assumption is incorrect since a VMS can integrate with these existing systems. Integration points allow your teams to continue using the systems they’re familiar with while simultaneously funneling the process through a tool designed to capture detailed metrics on the usage and spending of your program. There will be no need to use one system to request a contractor, then another to approve time for that contractor, etc.
Myth #6: A VMS increases the time to fill jobs. By establishing consistent communication channels with vendors, the VMS enables vendor partners to promptly receive requisitions and submit candidates more swiftly. Real-time notifications within the VMS tool keep vendor partners informed about their candidates’ status as they progress through the hiring process. Once a candidate is submitted, the VMS facilitates the efficient updating and capturing of compliance requirements, expediting the review and approval procedures. Consequently, this streamlined approach ensures a smooth and timely onboarding process.
The bottom line? A VMS will help your organization gain transparency, reduce risks, and streamline processes. Once you clear all misconceptions about the use of a VMS, you can start searching for the right solution that can solve your contingent workforce needs.