As the temporary workforce market matures, management tools have followed suit.
By Audrey Roth
Over the past few years, the rise in the temporary workforce has become undeniable. Employers recognize the capabilities that come with employing temporary workers, while employees have realized the advantageous possibilities contingent employment allows. In fact, Ardent Partners reports that organizational use of contingent labor is set to increase by 30 percent over the next three years. It seems as though the large-scale conditional workforce is here to stay.
According to the United States Bureau of Labor Statistics, employment in temporary help services in December 2013 alone rose by 40,000. The industry added 248,000 jobs
in 2013, compared to the 174,000 jobs that were added in 2012. The Society for Human Resources Management Workplace Forecast of May 2013 finds that 85 percent of HR professionals do not plan to decrease the use of contingent workers.
“There is significant growth of the non-employee population and that portion is not only increasing rapidly, but it is here to stay. We sometimes describe it as the ‘permanent temporary worker,’” says Arun Srinivasan, vice president of marketing and strategy for Fieldglass.
Contingent labor allows organizations the much-desiredflexibility to hire staff as needed. “It started off as a tool of convenience, where employers could ramp up, or, if needed, ramp down quickly, and that’s how it started. So they started relying on these different kinds of workers,” he adds.
With a fluctuating economy, hiring temporary workers is a safe yet beneficial bet to make, allowing companies to make alterations with the ebb and flow of the needs of the company.
Once the benefits of a temporary workforce have been realized, employers face a new predicament: the management and procurement of contract labor. As Srinivasan shares, “Now non-employees are an integral part of any company’s workforce, small or large, local or global. And as a result you need tools to be more effective and be more efficient, and use this as a competitive tool. And that’s where the VMS comes into play.”
Vendor management systems (VMS) are Internet-enabled software applications that help navigate the multi-step processes of managing contingent labor. As Yvonne McAteer, vice president of sales for Superior Workforce Solutions, Inc. – a Superior Group Company, shares, “A vendor management system provides great business intelligence on one of an organizations’ key assets, which is their people.”
In the past, there have been different processes for full-time and contract workers in terms of onboarding, training, and skills tracking. But as the contingent labor wave continues to rise, organizations need to gain the same clarity on non-permanent staff members to earn the most return on investment from these positions. As Edward Jackson, president and founder of VMS provider Provade shares, “It’s your workforce, and VMS is just simply another magnet for how you manage your workforce. The same rationale that you put into increasing productivity and capability of your employees, you put that same rationale to justify using VMS to increase the productivity and capability and delivery of your non-traditional employee workforce.”
Achieving with a VMS
The benefits of VMS can relieve the major pain points of contingent labor: visibility, compliance, and time management.
Maintaining visibility. Once a VMS is implemented, organizations can gain crucial insight into their workforce. “It starts with the very basic question of how many non- employees do I have? How many contingent workers do I have? Where are they? What are they doing?”
says Srinivasan. “And then it gets into more interesting questions like, how much are we spending on them? What are their skills? How do they complement the skills that we have? What is our strategy there? Are we too dependent on one thing or the other?” Organizations can leverage this data to realign processes for a more productive outcome.
Rich Smith, senior consultant at Teradata, provider of data analytics platforms, applications, consulting, and other services, leverages a VMS from Fieldglass to manage hundreds of contractors at any given time.
“We immediately knew a lot more about our temporary staffing process and program because the tool gave us direct visibility,” he says. An added bonus: integration with Teradata’s managed services program (MSP). “It was designed not just for our MSP’s purposes but also tailored to suit our needs[…] Tangible benefits flowed from us having access to the tool—and visibility—at every step of the process. That was tremendous.”
Smoothing the processes. A VMS can assist in alleviating time-consuming administrative procedures that come along with onboarding and offboarding. “Vendor management systems have made great gains in minimizing the onboarding process when you find that talent, which ultimately results in speed to market which helps companies be more competitive within their industries,” explains McAteer.
Ensuring compliance and risk mitigation. Complying with regulations for a global workforce becomes even more complex when it’s made up of both permanent and temporary workers, potentially working from different geographic locations in different sectors of the organization. “Risk mitigation, identifying the relationship between employer and employee, and making sure that there’s compliance, whether it be drug testing requirements or the right employer relationship, that is also an area of ongoing interest for our customers,” explains McAteer.
Srinivasan adds, “VMS technology helps [the clients] define the rules, standardize them across the organization and enforce it in a consistent manner.”
Reducing costs. There is no doubt about it: An underlying motive for managing temporary workers is cost savings. The return on investment is worth exploring VMS. “Vendor management systems can directly impact a company’s margins, which ultimately impact an organization’s profit. There’s a lot of different ways that that occurs…driving the business intelligence to make better business decisions, the automation, and the efficiencies brings great cost savings to organizations,” describes McAteer.
Trends and Transitions
As the size and use of temporary labor has evolved, so have the capabilities of a VMS. The tools have come along way since their inception. “It was somewhat tactical, automation of an administrative process. Now when you look at vendor management systems, they really are end- to-end software for services,” clarifies McAteer.
Mobile capabilities. The use of VMS on mobile devices has been a central area of growth. “I think it’s been happening the past 12 months, and I think the next 12 months will kind of complete what I would have considered a two-year cycle where we’re seeing that shift of the majority of users being on desktop to the users now utilizing a mobile device for much of this activity, whether it’s a smart phone, tablet, or such,” shares Jackson.
Business intelligence and analytics can be accessed on a mobile device, anywhere, anytime. Plus something as simple as GPS is heightened through a VMS with mobile capabilities. As Jackson explains, if a temp worker has a new assignment, they have access to directions to the location easily through their device.
Ease of use. The transformation of a VMS into an easy- to-navigate system and interface has been an identifiable difference since the early days. “I would say that …. the biggest change that I’ve seen has been ease of use, the intuitiveness of the tool, and how it’s tuned to the job that the people are trying to accomplish,” says Teradata’s Smith. When looking to hire a temporary worker or managed a fixed-fee engagement, Smith says even someone with very little training can easily navigate the system.
Today’s VMS technology caters to the hiring or engaging manager trying to reach external resources, says Srinivasan. Advances in the industry have simplified the process, making it easy for hiring managers to complete their tasks.
“For example, in our technology we support a two- click requisition process,” says Srinivasan. “So the hiring manager comes in, [and] in two clicks they have defined their business need and they are out of the system.”
Reporting and analytics. As the technology itself increases, the reporting and analysis capabilities increase as well.
“Vendor management tools today can provide a quick snapshot in real time of exactly what’s happening within a business unit at a company in terms of contingent labor, or throughout the enterprise,” states McAteer.
The new robust reporting is leading toward strategy and away from strictly administrative information. Srinivasan explains, “[Now] we are more of a decision support system than just a transactional reporting system. With decision support we are able to take the raw data and highlight the key outliers, the other anomalies that you see, the trends, and go from data to information and use that to actually drive business performance.”
Integration. Another clear improvement is integration. Global organizations often have disparate systems for workforce management, and now those systems can work seamlessly with VMSs. “Companies invest in many enterprise solutions and over the years VMS systems have simplified that integration process,” says Srinivasan. “Today a VMS system ends up complementing your existing IT investment.”
The need for a VMS becomes clear in the ever-changing business world that is 2014. As the VMS industry keeps moving forward, the tools and dashboard have organically improved. With the developments of VMS’s progressing steadily year after year, it only seems natural that the capabilities will continue to increase.
VMS + MSP: Perfect Together?
Both VMSs and managed services provider (MSP) programs are tools organizations can leverage to get the most from their contingent workforce. They have certain aspects that complement each other.
“A real solid partnership between an MSP and a VMS can drive great efficiency,” notes McAteer. “Generally speaking, I think that companies get more value [from] a VMS when they have an MSP partnership behind that. We’ve heard this from our supplier partners, a VMS is only as good as a MSP.”
But it is possible to have one without the other. As Jackson remarks, “The challenge they have is as these contracts mature, the customer begins to look at the MSP as ‘all you are doing is providing me labor with a cost. I see the value I get from the technology and the transformation that comes as a result of the technology, but is it worth the additional cost for you as an operator of it?’ And I think that’s going to be the challenge for the MSPs.”
And often, they meet in the middle. Smith says, “I’m also aware of some users who have an MSP for the time and materials side, but the client runs the VMS for all the fixed-fee engagements. So there’s definitely a lot of different hybrid models that go all the way across the spectrum from completely outsourced to completely in-sourced.”