For many companies and industries, January is a time to set the tone for the whole calendar year. Setting goals for your contingent workforce program can help your organization to:
- Minimize program costs
- Increase overall program efficiency
- Maintain contingent workforce compliance
Below, we outline several possible goals for your vendor management solution in each of these categories.
Minimizing Program Costs
The beginning of the new year is a great time to examine your program for possible costs. By using your vendor management system data and records, you have the ability to determine when and how you can cut costs. Places we’ve seen savings include
1. Reviewing Your Existing Vendor Pool
A good place to start is by reviewing your vendor pool. Do you have an appropriate number of vendors for the number of contingent workers you need each year? Some vendors offer reduced rates for volume commitments, so reducing the number can improve the cost of your program.
Top tip: Use your vendor management reports to determine which vendors are your top performers and which ones should be moved to a lower vendor tier or removed from the program.
2. Taking a Deep Look at Your Rates
The next opportunity is to review your current rates and benchmark to the market standard. Are there opportunities to reduce rates and stay competitive? On the flip side, you may find your rates are below average and increasing them may open up your talent pool to more quality candidates. Being in touch with market rates and markups eliminates cost as a barrier to success.
Recommended reading: ‘Looking Ahead to 2021: 3 Ways to Leverage Your VMS for Workforce Planning’
3. Analyze Last Year’s Spend for Trends
Reviewing the previous year’s spend on overtime, along with rates, may reveal the need to consider a full-time employee to replace a contingent worker or workers. Perhaps it could be more cost-effective to bring on an FTE if they are in positions with long tenure or have large amounts of overtime.
4. Adjusting Rates to Match
A lesser-known opportunity might be to review tax spend. The Federal Insurance Contributions Act (FICA) tax funds Social Security and Medicare. After a certain threshold, this can be reduced. Check with your vendors or payroll for possible discounts.
Handpicked for you: ‘The Cost of Contingent Workforce Spend: A Q&A with Expert Cindy Chunn’
Increasing Overall Program Efficiency
Often-overlooked efficiency is a key pillar to a successful contingent workforce. You can drive efficiency in many ways including:
5. Making Sure Your Training is Up to Snuff
Updated annually, training is an important part of vendor management. In addition to onboarding and training of your contingent employees, check on the needs of your VMS users and administrators. Have there been new features released in the last year that may need additional training? Is it time for refresher training? There may be aspects of your VMS that could save everyone time, including your vendors.
6. Seeking Out Manual Process
Now would be a good time to review any processes that you conduct manually. Are there opportunities for automation? Your VMS may include integrations for steps like background checks, benchmarking rates, timesheets, and payroll management. Check with your VMS provider about automating your still-manual tasks
More from the blog: ‘3 VMS Integrations That Can Save You Time and Money’
7. Creating Onboarding Standards
How are you onboarding your workers today? Do you have a standard methodology? Once you determine the requirements you have for each position, it’s time to automate. Yes, we think you should automate as much as you are able to! Whether a background check or an asset management tool, you can easily reduce errors by decreasing the number of manual tasks in your onboarding process.
8. Making Your Reports Work for You
Consider your reporting responsibilities for your contingent workforce program. Are there automation opportunities to save time and produce reports efficiently? Is there information that your managers or executives would like to see differently? Use your VMS to give you the visibility that you need to make informed decisions.
Related reading: ‘How to Measure the Efficiency of Your Contingent Labor Program’
Maintaining Contingent Workforce Compliance
As we saw throughout 2020, compliance is everchanging. The beginning of the year is a great time to catch up on compliance by:
9. Staying On Top of Everchanging Compliance
Depending on your industry and geographic location, you may be subject to different regulatory requirements. Is your program up to date to manage these requirements? Are all of your vendors, users, and workers compliant? Making sure your compliance is in order is a great way to avoid unwanted costs.
You may also like: ‘The Rise of the Gig Economy: 4 Strategies for Compliance Management’
10. Choosing Your Credentialing Requirements
Do your onboarding and offboarding processes meet your organization’s requirements? Any updates to policies and procedures may require tweaks to your contingent workforce program. This may be adding a COVID vaccine to onboarding compliance or adding an IR-35 check to new job postings.
11. Conducting Compliance Items
While you should be checking your compliance items throughout the year, the beginning of the year is a great place to start. We recommend spot-checking your candidate compliance requirements quarterly. To learn more about compliance audits, check out our Shared Managed Services Team.
Setting Yourself Up for Success In 2021
Your 2021 goals for your contingent workforce program may include just some or all of these opportunities. If you’re unsure of where to begin or what to look for, consult your VMS provider or Managed Services Provider (MSP). What goals are you pursuing this year? Let’s make them count.