2020 has offered challenges that have pushed companies, governments, retail spaces, restaurants, and people to learn, be resilient, and be creative. We’re heading into the season of gratitude, signaling the end of 2020 and encouraging organizations to begin their important new year planning.
If we’ve learned anything this year, it’s that everyone and everything needs a plan. And your contingent labor program is no different.
Another lesson learned from 2020? Having the right technology in place is key to business (and social) continuity. As we all look ahead to 2021, there are three key areas in which organizations can leverage their Vendor Management System (VMS) technology for the planning and execution of those plans.
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1) Creating Key Cost Savings
Achieving cost savings is a critical topic for many organizations, especially in today’s economic conditions. As you start to develop your 2021 budgets for contingent labor, your VMS should provide you the ability to create cost-saving opportunities in a variety of ways.
Let’s look at a few.
One of the most common ways is through managing additional rate payments like overtime and on-call time. While it may be critical to allow for contingent workers to work overtime hours, using your VMS to view trends and spend in these categories can shed light on whether your organization is spending more money on overtime than bringing on additional workers. Depending on where your employees are working, the VMS can help you manage overtime trends across different states and locations to help data-driven decision making when creating schedules or hiring.
Using your VMS to help automate and manage budgets set for contingent labor is another cost-saving opportunity. Defining budget constraints and setting notifications within your VMS technology that warn when you’re nearing your budget limit can help hiring managers and talent acquisition programs stay to plan on a set budget.
Your staffing vendors can provide other cost-saving opportunities through the VMS:
- The first way is through competitive bidding. By allowing vendors to see rates submitted by their competition, they can bid more competitively to supply great talent and favorable rates.
- Another method involves managing the vendor KPIs and SLAs through their performance in the technology. This will allow your organization to curate a limited staffing vendor population that provides great talent and negotiated competitive rates based on the volume of requisitions the vendor receives.
Keep reading: ‘What Is a Vendor Management System and Do I Need One?’
2) Ensuring Effective Compliance Management
Vendor Management Systems allow for the automation of onboarding and offboarding of contingent labor. As 2021 approaches, contingent workers may be backfilling vacated full-time positions, and the importance of risk mitigation will be critical. The ability to automate compliance processes to ensure adequate credentialing, training, and safety documentation will be of increased importance.
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Through your VMS compliance module, you can assign different compliance items based on location, position type, and flex for peak or crisis hiring. It will be important in 2021 to have this type of flexibility and insight into compliance for your extended workforce. 2020 has taught us that a global event can radically shift numerous segments of society, and having visibility across your workforce using technology is imperative for business continuity.
Additionally, the compliance module allows for email notifications and reporting management that provides visibility on expiring and renewing compliance items and certifications.
Another key feature of your VMS is the ability to perform audits.
Compliance items are date- and time-stamped allowing you to survey your contingent workforce and identify any areas of non-compliance. As your extended workforce grows in 2021, being able to manage risk mitigation and compliance efficiently will be key.
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3) Visibility: You Can’t Plan for What You Can’t See
The need for total workforce visibility is one of this year’s biggest lessons. Companies quickly moved their entire workforce to be remote, added technical staff, hired a record number of travel nurses, created jobs to bring on contract tracers, and enhanced safety protocols on job sites. Organizations leveraging a VMS to manage their contingent workforce had the ability to see real-time staff data in a centralized location.
This was critical to business continuity in 2020.
In the coming year, it will still be imperative for companies to leverage the visibility their VMS provides into hiring trends and extended workforce management (independent contractors, contingent workers, project resources, etc.)
Making informed business decisions and having the flexibility to staff up or down will depend on having access to historical and real-time data from your VMS.
While many organizations may have laid off staff in a cost-savings mode, in order to recover and thrive, they will need to bring in staff as needed.
The most flexible and sustainable way to do that is to leverage contingent labor. Companies who had a VMS throughout 2020 will have data at their fingertips that allows trend analysis for typical peaks and valleys as well as crisis management. Additionally, the VMS can provide real-time data allowing you to check the pulse on budgets, workers, locations, and any other data that’s relevant to your business success.
Prior to the onset of the pandemic, contingent and non-traditional work was on the rise with more of the labor market voluntarily moving into the gig economy, trading the traditional stability of a full-time job for flexibility. This year has accelerated that growth as unemployment numbers rise and employers are looking to more flexible workforce options like independent contractors, freelancers, and contract labor. A VMS will grant you essential extended workforce visibility, and will be a critical factor in your company’s success and growth.
Keeping Your Eyes on the Contingent Workforce for 2021
As we reflect on what has come to pass this year, it’s time to also start looking ahead to 2021. A key area of business success and continuity will reside with your contingent workforce.
If you don’t currently use a Vendor Management System, start those conversations with your organization. A VMS will provide you with three key ways to plan ahead for next year by offering initiatives and data to drive cost savings, compliance management, and visibility.
Related reading: ‘How to Determine Which Contingent Management Model Is Right for You’