As you begin the new year with new initiatives, goals, and perhaps navigating a new landscape in talent management, now is a great time to consider how you’re using technology to manage your contingent workforce. In this article, the first in a series of three posts, we explore the first area your organization should focus on to help elevate your contingent labor program: technology.
According to a recent report, 80% of U.S. corporations plan to increase their use of a flexible workforce in the coming years, with 40% making up the total contingent workforce. These numbers are astounding, and despite the extended workforce making up a large proportion of enterprise spend, many companies still have a ‘laissez-faire’ approach to contingent workforce management. We are, however, seeing the market mindset quickly shift away from this management approach.
There are two main trends that are emerging from this mindset shift. First, C-level executives are starting to play a greater role in driving decisions towards leveraging the extended workforce and outsourcing projects. Typically, these initiatives have been driven by talent management procurement teams involved in the day-to-day management of vendors and the different players within the contingent workforce.
Secondly, there’s a trend emerging that’s placing an emphasis on deploying a tech ecosystem. This means centralizing your technologies and automating processes through AI and machine learning.
Revolutionizing or transforming your contingent labor program will be easier if you focus on key areas. Let’s explore how technology can support you in this process.
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Are You Using a VMS to Manage Your Contingent Workforce?
Whether you already have a VMS provider or are looking to get one, it’s always good to step back to the basics. What is a VMS and how can it support your program?
At its core, a vendor management system is a cloud-based software that allows you to automate your contingent labor management processes, be more efficient, and increase your visibility to manage your contingent workforce program. Its data capabilities also enable you to make better strategic decisions. A VMS should cover all types of the extended workforce such as independent contractors, talent pools, and direct sourcing statements of work, to name a few.
And if you already have VMS technology in place, is it meeting your needs today? Are you finding yourself still performing manual processes? There are many factors that can affect its performance, such as whether your system is optimized. For example, if the person who implemented the system is no longer a part of your organization, you might be lacking someone who can champion that effort.
Perhaps it’s time for a system optimization whereby your VMS provider helps you analyze how you’re using the system and provides ways to improve its functionality. They can help by giving you new ideas on how to use the system or its features. Alternatively, you might also consider that it’s time to adopt a new technology altogether. The first step is considering where you stand today and where you’d like to go with your program in the future.
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The Many Benefits of a VMS
Understanding the benefits and advantages of a VMS is a key element in your decision-making process. Cost-savings are a big plus of adopting this type of technology and a determining factor for any new technology or program for your business. However, there are some areas of value that are less obvious than cost savings. These are mainly visibility, compliance, and efficiency.
Having workforce visibility lets you see exactly what’s going on with your contingent labor program, such as where most of your hires are in your organization and the trends in your hiring. Is it more seasonal? Is it tied to specific quarters or upticks in your business, or are there other market factors to take into account? These insights can be gathered from data within the VMS.
Compliance is another critical aspect that a VMS enables, whether you’re part of a highly-regulated industry or a startup. For instance, having your contractors classified appropriately will save you fees and potential penalties.
Next and perhaps most importantly, the biggest impact a VMS will have on your contingent workforce management will be the efficiency it affords your team. We’re all trying to figure out how to squeeze more out of our day. Creating those efficiencies through technology, whether it’s from a payments, vendor management, or candidate’s standpoint, will reduce the manual tasks of spreadsheets, email, and calls to let you focus on more strategic program management and decision-making.
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Creating a Talent Technology Ecosystem Through Integrations
The next step in your journey to elevate your contingent workforce program is to use strategic partnerships to power plug-and-play capabilities. How many systems do you estimate you use to manage your contingent workforce? One of the best ways to ensure you’re leveraging your technology stack—and your team is having a favorable experience with it—is to create a talent tech ecosystem. So, instead of having to log into every system separately to pull in data and reports, such as your ATS or ERP system, wouldn’t it be simpler if you had more integrations in place?
Thinking about this ecosystem, you might be surprised about what encompasses talent and which areas of your business interact with it. You have your full-time employees, your extended workforce, finance, legal, and procurement, and each of these areas have their own technology to manage contracts, compliance, and sourcing. To reduce overlaps and “noise”, think about your tech ecosystem as plug and play. By integrating your technologies, you’ll be sharing data back and forth behind the scenes. It’s a seamless process that will occur automatically and will create efficiencies in your day, as well as give you greater insights.
Gone are the days where you should be focusing solely on your full-time workforce, and this is where total talent management should be embraced. To be truly successful and have all the right resources in place, it’s critical that you’re looking at your total talent landscape, all of the technologies that are involved, and the best ways they can all interact with each other.
It’s a much more straightforward process than you imagine! A VMS allows for you to integrate with other talent technology such as scheduling software, direct sourcing, freelance management, background check providers, independent contractor vetting, and IR35 compliance. Match that with data analytics and you’ll be playing a different game altogether in your extended workforce management.