Do You Need To Implement a Contingent Worker VMS?

Knowing When to Implement a Contingent Worker VMS

Generally, you may think you are managing your contingent workers perfectly well. Hiring managers seem happy, agencies seem effective and you haven’t heard from finance or procurement in a while.
However, the problems may well be beneath the surface. How can you know if there are actual problems that may require you to implement a Contingent Worker VMS either independently or as part of a Contingent Workforce Managed Service Program?

If you hear people in your organisation asking any of these 7 questions, you may need to consider a VMS.

1. How do we scale our recruitment capability if the business keeps on growing?

Contingent worker recruitment often relies more on hiring manager relationships than on a centralised process. Although, this is relatively okay for organisations with a small and manageable contingent workforce, it becomes problematic as they expand. More specifically when organisations are scaling rapidly and in desperate need of talent to fill skills gaps on client contracts. Because of this, HR and TA teams may begin to feel overwhelmed. They can easily lose track of which agencies are being used, where the best talent is coming from and whether an appropriate rate or fee is being paid.

Organisations that implement a Contingent Worker VMS, benefit more from streamlined processes and clear parameters around how agencies are used, paid and perform.

2. Who exactly takes responsibility for contingent worker compliance?

It’s often the case that the responsibility for contingent workers falls into the empty space between
HR and Procurement. Ask HR who looks after contingent worker compliance, and they’ll point to Procurement. Ask Procurement, and they’ll say that they only look after the contract – they don’t have the responsibility for managing the process. In the meantime, contingent workers come and go without a robust process in place for checking their compliance and right to work credentials. It’s better to ask those questions quickly, as ignorance can result in employers being fined.

Implementing a VMS makes the contingent talent supply chain more transparent, helping employers to eradicate the use of umbrella companies and ensure that contingent workers are properly
vetted and classified.

3. How quickly can we bring in the skills we need in the short-term?

Sometimes, it is difficult for Talent Acquisition and Recruitment teams to find the talent needed to fill roles. Establishing a clear process for managing vendors, underpinned by the technology platform that a VMS provides, will enable those times to operate in a more agile way, use contingent workers to meet short-term hiring needs, and onboard talent more quickly and effectively.

Implementing a VMS sets you up for success so you can move more quickly to secure the skills, talent and expertise you need.

4. Can we manage our recruitment suppliers more easily and efficiently?

Using different agencies to supply talent can often equate to varying standards, as well as wide disparities in rates and fees. As organisations grow, it is vital that they are in a position to manage their recruitment suppliers effectively and put parameters in place that help to measure performance.

Implementing a VMS will help to set the scope for agency performance and standards. A VMS can also be run by a Managed Service Provider, who can take complete responsibility for ensuring that your agencies delivery the right talent, at the right cost.

5. Why are our contingent worker costs spiralling out of control?

Even organisations that are successfully attracting, recruiting and managing their contingent workforce can find that costs spiral out of control quickly. Procurement then has difficult questions to answer
but by that time, it is already too late to address the issue.

Implementing a VMS ensures that the rates and fees charged by agencies are standardised, contracts are harmonised and costs are always visible and transparent, throughout the talent supply chain.

6. Can we reduce the administrative burden on our HR team?

HR teams will face an increasing workload as the requirement for contingent workers grows
– as well as needing to stay ahead of changing legislation in areas such as IR35 and Right-to-Work.

Implementing a VMS helps to answer the question of how a business can scale without increasing the process-driven pressure on those who have to manage the workload. As your need for contingent workers grows, your recruitment and HR teams can manage the process more easily and focus on what they need to focus on – sourcing and engaging talent.

7. Shouldn’t we be giving candidates and hiring managers a best-in-class process?

It’s a fair question to ask and one that is difficult to answer if you don’t have a single, clear, consistent process in place for bringing contingent workers into the organisation.

Implementing a VMS will give you the platform you need to build a process from offer acceptance through to onboarding. It means that candidates on short-term contracts join your organisation ready to hit the ground running. At the same time, it means that hiring managers can use their time
more efficiently, confident in the knowledge that they are using the right agencies, following the right process and engaging with the best talent available.

In Conclusion

If people in your organisation are asking questions around how you hire contingent workers, how you control costs effectively and how you ensure that they are classified correctly and compliant with relevant legislation, it’s time to build a better model.

Implementing a VMS gives you the technology platform you need to reduce friction in the process, take the pressure a way from Hiring Managers and HR, and ensure visibility of costs throughout the contingent talent supply chain.

Post-implementation, employers can manage and maintain a VMS themselves. Alternatively, a VMS implementation will often be part of a wider Managed Service Program, where a single talent solutions partners provides strategic consulting, vendor management, recruitment support and tactical marketing to build a long-term contingent workforce solution.

For help with all the contingent worker terms, jargon and abbreviations, we produced our Contingent Worker Dictionary which we update regularly.