Why VMS Why now?

Why VMS? Why now?

Your guide to why a vendor management system (VMS) is an essential tool for businesses today.

Businesses worldwide increasingly depend on contingent talent to give them the flexibility they need to respond to market challenges and opportunities. In fact, nearly 50% of today’s average workforce consists of non-employee talent. These external workers include agency-provided temporary staff, independent contractors, consultants, freelancers and gig workers, and outsourced service contractors, both professional and blue-collar.

To acquire and manage this extended workforce, companies use a vendor management system (VMS). A VMS enables processes from sourcing and selection to assignment management, timekeeping, invoicing, and reporting.

~50% of today’s average workforce consists of non-employee talent

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Addressing today’s workforce challenges

In 2023, the global talent shortage reached a 17-year high, with 77% of employers worldwide reporting difficulty finding the skilled talent they need. To address this skills gap, employers invested heavily in people, using a variety of techniques, including upskilling and reskilling their current workforce (71%), filling new permanent roles (51%), using technology to augment processes (43%), and bringing in more contract and temporary talent (37%).1

As contingent talent becomes more strategically important, companies face challenges if they don’t have VMS in place.

1. Insufficient preparation: 86% percent of companies say external workers are critical to their organization’s overall performance, but only 33% say their organization is sufficiently prepared to manage a workforce that relies on external workers.2

2. Lack of dedicated technologies: Only about three-fifths of companies overall (59%) use technology to help them manage and administer contingent workers.3

3. Hit-or-miss visibility and management: While companies centralize the management of some categories of non-employer labor, Ardent Partners/Future of Work Exchange estimates that only 48% of non-employee labor is “actively accounted for in corporate budgeting, planning, or forecasting.” By not accounting for all non-employee labor, companies expose themselves to a variety of risks.

Top challenges for contingent workforce programs without a VMS

77% of employers cannot find the talent they need

88% say external workers are critical, but only 33% are prepared to source and manage them

52% of non-employee labor is not accounted for

Risks that must be managed

Increased use of contingent workers exposes companies to several different kinds of risks. These can be broadly categorized as:

• Legal and regulatory risks

• Operational risks

• Security risks

• Strategic risks

Within these categories, specific risks include:

Legal and regulatory

• Worker misclassification

• Failure to comply with applicable environmental, social, and governance (ESG) regulations

• Data privacy

• Diversity, equity, and inclusion (DEI)

• Comparable pay and benefits

• Other local, state, national, and regional requirements

Operational

• Excessive spend

• Overpaying for skillsets

• Missed project timelines and budgets

• Reduced ROI

Security

• Uncontrolled access to facilities, networks, and data

• Theft of assets, including intellectual property

• Theft or corruption of financial, operational, or personal data

Strategic

• Losing the competition for talent

It starts with visibility

For more than 20 years, a VMS has proven the best tool for mitigating the risks presented by using contingent talent.

A VMS brings automation to your process, putting controls in place to support policies, meet compliance requirements, and gain efficiencies across sourcing, candidate selection, rate negotiation, onboarding/ offboarding, and assignment management.

This visibility allows you to make informed decisions about your workforce.

A VMS becomes your system of record for identifying categories of labor being utilized, how labor is being sourced, who your suppliers are, what rates you’re paying, which hiring managers and locations are your heaviest users of this workforce.

80% of leading companies worldwide use a VMS to manage their extended workforce

Once you have total visibility, you can begin capitalizing on some of the other benefits:

Visibility & compliance

Improved visibility of the contingent workforce and associated risk mitigation

Cost management

Cost management and reduction through leveraging bill and pay rate data, use of performance metrics in negotiation, and sourcing strategy development

Quality

Improved quality, performance, and timeliness through requisition standardization, supply chain optimization, simplified feedback, and selection capability

Process efficiency

Process efficiencies through consolidated invoicing, streamlined approval process, SOW milestone payment, and simplified time and expense entry

New Talent Channels

Ability to leverage newer direct sourcing and other workforce channels in a controlled way for more talent channel flexibility

Workforce Optimization

Feedback and performance management to optimize contingent workforce outcomes

Talent Pools

More effective management of contingent workforce alumni through talent pooling and deployment

An essential tool for businesses

As managing an extended workforce has grown more complex and the reliance on contingent talent expected to continue its upward trajectory, a VMS is now essential for businesses. With a VMS, companies can position themselves to not only navigate the challenges of contingent workforce management, but also leverage this workforce as a strategic asset for driving innovation and growth. In this era of constant change and evolving workforce dynamics, investing in a VMS is not just a wise decision—it’s a vital step towards securing a competitive edge and future-proofing your business.

About Beeline

For over 20 years, Beeline has empowered businesses worldwide to achieve competitive advantages with their extended workforce. Beeline Extended Workforce Platform gives companies the visibility needed to mitigate risks, achieve cost savings, and meet dynamic business needs. With tailored solutions that solely focus on the complexities of the extended workforce, clients leverage Beeline products that fit their unique requirements. Through thousands of integrations, clients can connect their extended workforce data from all technology stacks, including major procurement and HR systems.

Join the list of renowned brands benefiting from Beeline’s deeply seasoned experts, collaborative innovation, and industry-leading partner network.

Explore more at beeline.com.