Healthcare institutions are increasingly turning to vendor management systems (VMSs) to both reduce the cost of contingent workforce management and improve the efficiency and effectiveness of their overall process.
Medical centers need to improve cost efficiencies more than ever before. US national health expenditure has been on the rise over the last few decades, though unsurprisingly it peaked in 2020. Besides the pandemic, the rise in health spending is attributable to an aging population, rising levels of overall morbidity, and innovative new (but expensive) interventions.
As a natural consequence, employment in the sector has also increased. The US Bureau of Statistics predicts a 13% increase in overall healthcare employment between 2021 and 2031, well ahead of the average for all other occupations.
The sector has relied heavily on contingent labor to quickly bring in talent and cover the demand, with the help of a VMS to manage the entire process. However, VMSs do more than just manage contingent labor programs. They’re designed to save organizations money (from 5% to 10%), savings that could potentially increase as market conditions change. Nonetheless, many healthcare centers aren’t aware of the further cost-savings they can gain when integrating a VMS with other solutions.
Let’s deep dive into three essential VMS integrations healthcare centers should make to save costs.
1. Direct Sourcing
In a healthcare context, direct sourcing replaces common sourcing channels (such as staffing agencies or travel nurse firms) with private talent pools. Pools can be composed of ex-workers, referrals, or retirees. Likewise, medical institutions can leverage their career sites or third-party job boards to attract talent using their own brand.
With the help of a VMS, healthcare institutions can gather all talent sources in one place to create smart and efficient talent pools. By nurturing this pool, they have the ability to quickly filter and find talent that fits their job requirements. What’s more, they’ll have all the info about the candidate available at once, including their reviews or previous pay rates (if they have worked at the healthcare institution before).
How Does Direct Sourcing Save You Money?
Direct sourcing removes a significant cost for organizations: finder’s fees. As organizations would be sourcing directly and hiring the talent themselves, they won’t need to pay commissions to an intermediary. No finder’s fees mean a reduced bill—you would only need to pay payroll rates.
With direct sourcing, organizations can reduce their talent acquisition costs and save 10% on current bill rates. Their technology integrates with VectorVMS to create an enhanced talent pool functionality where you can use just one centralized system to attract, curate, and engage talent.
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2. Rate Benchmarking
A VMS allows medical institutions to enter and store rate information about each of their vacancies, but how do they know if their rates are competitive?
A rate-benchmarking system can help medical institutions determine if their bill rates are aligned with the market. This can be provided by a service provider or organizations can integrate it directly into their VMS. With VectorVMS, for example, medical institutions can compare their rates to the market using their own data or through our recommended sources.
Rate benchmarking is definitely a must for any medical institution that wants to build a strong, cost-saving contingent labor program. Occasionally in healthcare, there could be rate fluctuations in similar positions across departments or locations. Keeping track of all the rates in one system will help confirm you’re getting the best ones.
Information is vital in making better choices. With a VMS, you’ll have the data to make timely and intelligent decisions for your contingent workforce program.
3. Freelance Management System
A Freelance Management System (FMS) is used to store, gather, and curate information about healthcare talent to use in the future. Similarly to direct-sourcing technology, it allows organizations to draw upon a diverse talent pool. Based on the FMS integrated into the VMS, medical institutions can either curate the talent themselves or have a pool of talent previously vetted as per their requirements.
Hiring freelancers or contractors directly makes it possible for healthcare institutions to drive down workers’ bill rates. More importantly, the talent in the FMS can be linked directly to the VMS, so HR teams can automatically pull the right talent into the system and to the payroll vendor without any kind of manual work.
Choose Integrations That Suit Your Needs
To keep up with constant growth while fighting a severe talent shortage crisis, healthcare institutions need to change their paradigm toward a more tech-driven approach.
Integrations in a VMS can help drive efficiency, reduce manual work, and mitigate risks. Healthcare institutions can greatly benefit from integrations because they can drive down both costs and admin time in a contingent workforce management program.