Extended workforces have become a source of competitive advantage and core operational capability. With complete data visibility across your organisation, coupled with analytics and artificial intelligence (AI) turning information into actionable insight, a vendor management system (VMS) can help you to make better decisions.
Acquiring and managing your extended workforce effectively is an essential part of your total workforce optimisation strategy. This means finding the optimal combination of permanent and contingent workers with the skills you need when you need them and within your budget.
However, how do you know that workers are arriving at the correct locations and with the right skills? Are your contingent workforce vendors pricing their workers competitively? Which assignments are more efficiently performed by contingent workers or contract service providers, and which by employees?
Unless you can answer these questions, your strategic planners and contingent workforce programme office are working blind, impacting negatively on performance, reputation, and profitability. However, add data and analytics to the mix and then your organisation can make the informed strategic choices it needs to be more competitive and profitable.
Data informs your total talent acquisition strategiesThe process of total workforce optimisation tells you the right mix of employees and non-employees to accomplish what your organisation wants to, at the target quality and as efficiently and cost effectively as possible.
With talent pools of both permanent employees and your extended workforce to choose from, how do you know when to use an employed resource or a contingent resource? At times the choice is obvious, because you may need short-term access to strategic skills, so using a highly skilled contractor or interim worker is the right choice.
But what if this requirement is ongoing across your organisation in many different departments or locations? It is only by having data visibility of contingent worker use from across the organisation that you would find out.
As a result, this skills requirement could be reclassified as a core skill and so future hires for the role are permanent. This visibility ensures you always have the right skills available, improving performance and reducing business risk.
This example highlights that the ‘when’ of data is just as critical as the ‘what’. If your hiring data is visible across the organisation and an alert about a demand or assignment expiry pattern is triggered through analytics, then you can make faster talent acquisition decisions. There could be assignments expiring in one part of the business as fresh assignments are activated, allowing a seamless transfer of skills and knowledge.
Skills and performance management using SOWs and data insightWhen developing your workforce strategy, you need to understand whether your contingent workforce has the right skills and is delivering statement-of-work (SOW) milestones on time and to budget. To gain this knowledge across your organisation requires visibility, monitoring and measurement of all SOW-based contracts.
With the SOW data, you can use analytics to identify trends and measure performance. This enables you to determine whether non-employees are delivering the target level of performance, or whether a different resource is required. That can also include exploring automation and outsourcing options, as part of your wider total workforce optimisation strategy.
Skills and experience are not the only criteria for a successful engagement. To add value, a contingent worker should start contributing from day one. This requires immediate integration with the rest of the team, which requires effective soft skills. Your data must provide those insights so you can choose the contractor or freelancer with the right combination of professional and interpersonal skills, based on previous performance.
Optimal talent acquisition and vendor choiceFollowing your strategic decision to use contingent workers for a specific role, the next challenge is to locate and acquire them. Your choices are typically in-house and external vendors and, if you choose external vendors, which ones?
Again, visibility and data are the winning factors here for taking the optimal strategic decisions. Is your in-house talent acquisition function more effective than external vendors and how can you set KPIs to determine this? Perhaps it is less effective in some areas, so your best option may be to outsource those, and keep direct sourcing for others.
Data for your contingent workforce suppliers’ scorecardsWhen outsourcing, contingent workforce vendor choice is often decided by relationships or inertia – ‘we’ve always used them’ – and not metrics. Furthermore, processes, markups and performance can vary widely not just from vendor to vendor, but also from location to location.
So, vendors need KPIs too, which should be monitored, measured, reported, and analysed using a scorecard focusing on quality, cost, and efficiency. By using this data from across your organisation, you can discover which vendors are placing well rated workers, with competitive pay rates that retain workers, alongside equally competitive bill rates and markups.
Churn from poor hires and poor quality reduces productivity and can be a major hidden cost, affecting your business performance.
Take data-driven strategic decisions using a vendor management systemA vendor management system, VMS, provides you with data and analytics tools that make it incredibly easy to track and manage the activities and performance of your contingent workers and vendors. It enables you to compare direct sourcing against vendors, and also compare vendor performance.
You have visibility of data across your organisation, providing you with insights for creating more effective talent optimisation strategies. The insights you gain from data analytics and AI drive real-time continuous improvement and control across your organisation.
To learn more about what a vendor management system is, what its key features are, and what benefits they can bring to your organisation, download our free guide. It’ll give you all the information you need to understand how they can aid in contingent workforce planning, forecasting, management, and even procurement.