Who Needs a Vendor Management System? Six Signs Your Company Needs a VMS

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As more and more businesses realize the benefits of an extended workforce, they are seeking solutions to help streamline the process and management of their non-traditional workers. With a whopping 56% growth in the extended workforce since before the 2020 global pandemic, effective management is now more crucial than ever. Many human resources teams are turning to vendor management systems (VMS) to achieve cost savings, increase program efficiencies, and attract top talent, especially with the growing uncertainty in the market. 

A VMS is a software-as-a-service (SaaS) platform which organizations use to effectively manage all aspects of the non-traditional labor ecosystem, from processes to service providers, to statements of work—all in one cloud-based platform. A typical VMS includes: 

  • Non-traditional talent or project request management 
  • Interviewing capabilities
  • Onboarding and offboarding functionality 
  • Timecard and expense management   
  • Mobile capabilities   
  • Integrations with client eco-system 
  • Reports and program performance insights and analytics 

If you’re still unsure whether a VMS is the right solution for you, please continue to discover which organizations benefit most from a VMS and why it makes sense for your business.

1. Your Organization Spends in the Millions on Non-traditional Labor or Has a Measurable % of Non-traditional Labor

Are you spending millions on your extended workforce? If so, you have many non-traditional workers, with multiple contracts, rates, hours, and payments to keep track of.  If so, things can quickly get out of control trying to manage everything from contracts and compliance to rates and onboarding. 

Why you need a VMS: 

  • Track and manage your non-traditional labor, their rates, hours worked, contracts, and more, all in one platform 
  • Optimize cost efficiency by gaining visibility into spend, service provider management, supplier effectiveness, and more 
  • Realize initial savings that range between 8% and 15% 
  • Get visibility through reporting on your overall program, including onboarding, status, worker locations, spend, utilization, time to fill, and more 
  • Ensure you’re getting the most from your spend by streamlining operations and processes 
  • Be in compliance, regardless of where your extended workforce is located 

2. When The Wild West best describes your current supplier strategy

Whether you’re a mid-size business hiring hundreds of workers or an enterprise hiring thousands of workers, you’re likely working with multiple service providers to fill your pipeline with a qualified pool of non-traditional workers. 

Why you need a VMS: 

  • Manage all your service provider relationships, contracts, and labor in one place 
  • Rationalize supplier mark ups 
  • View reports, supplier score cards, and set performance benchmarks for service providers 
  • Ensure consistent non-traditional labor rates across all service providers 

3. Your Business Operates in Multiple States or Expanding Internationally 

Staying compliant with your full-time workforce is challenging enough, but it can get even more complicated with non-traditional labor across multiple states or even in different countries. 

Why you need a VMS: 

  • Ensure compliance across your workforce by easily accessing documentation and contracts for each worker in your VMS 
  • Leverage the VMS functionality to ensure and drive in-region compliance as it relates to time management, onboarding, and privacy laws    

4. No One Person in Your Business is Accountable for Your Extended Workforce

When no single team is responsible for your non-traditional labor, things can slip through the cracks, causing severe inefficiencies down the line. You may have to deal with varying labor rates and detrimental contract terms, as well as a lack of visibility into your non-traditional labor spend.  

Why you need a VMS: 

  • A single place to view everything your teams need to effectively manage your workforce 
  • Gain visibility into service providers delivering on your needs, on time, and how to better manage them 

5. Your Contract Worker Program is Keeping you Up at Night Because it Lacks Uniformity

Optimize your entire non-traditional labor process, from onboarding to tracking hours, and everything in between by bringing everything together in your VMS. One place to view and manage your non-traditional labor. 

Why you need a VMS: 

  • Provide a centralized database for documents and onboarding material 
  • Track non-traditional staff hours and overtime in one place 
  • View roles to be filled, contracts, and rates while ensuring consistency across all suppliers 
  • View supplier contracts, rates, and your non-traditional worker’s hours to more accurately bill clients for time 
  • Ensure accurate payments are remitted to service providers including rates, hours, and cost allocation within an approved budget   

6. Cost Efficiencies are Important in your Organization

Do you know how much you’re spending on labor? Are you on track for your budget? A VMS helps you gain deep insight into your labor rates, hours worked, and more so you can forecast spend and find ways to optimize your spend.  A VMS can save organizations from 8% to 15% in the first year, alone.   

Why you need a VMS: 

  • If you’re waiting for service providers to provide non-traditional workers, you’re losing money 
  • Supplier rationalization to drive consistent contractual pricing, rate reductions, and increase worker quality 
  • Ensure cost savings by viewing spend vs. budget 
  • Gain visibility into extended workforce spend to yield meaningful cost savings 
  • Realize soft cost savings through process efficiencies such as consolidated invoicing, system integrations, and automated processes 

Get Started with Magnit 

As your extended workforce grows, connect your teams with service providers and data leveraging 

a VMS. You'll be able to better manage, source, and optimize your extended workforce with a single AI-driven platform, which provides greater visibility, transparency, and control of your workforce to, ultimately, create better efficiencies throughout your business. 

 Magnit offers a comprehensive VMS solution and a team of dedicated professionals that can help you manage the extended workforce you need to power your business. With over three decades of experience and top analyst ratings, you can rest assured we will connect you with the best talent and help streamline your process. If you need help getting started or want to learn more about how a VMS can work for you, contact us

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at info@magnitglobal.com.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.

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