Among the first questions buyers ask when considering whether to invest in contingent workforce management technology is, “What is the payback period? When will the financial benefits of my VMS exceed my investment?”
For too long, the answer to that question has frequently been, “Well, it depends.”
Fortunately, one technology provider can now deliver an objective answer.
“Beeline’s payback period is less than 3 months.”
As a result of a commissioned study conducted by Forrester Consulting on behalf of Beeline, we now know that Beeline Extended Workforce Platform can pay for itself within the same fiscal quarter it becomes operational.
Forrester Consulting’s study, titled “The Total Economic Impact Of Beeline Extended Workforce Platform,” was published September 2021. Its financial analysis (page 27) concluded that the Beeline platform’s net benefits (benefits minus costs) equal the initial investment in less than three months. And the cumulative net benefits curve rises even further after that.
ROI of 158% after 3 years
According to Forrester and based on a composite Beeline client, an organization can reasonably expect to “experience $12.14 million in benefits over three years versus costs of $4.7 million.” Even after deducting the costs from the benefits, this leaves a net present value (NPV) of $7.44 million and an ROI of 158% over the 3-year period.
Direct benefits Forrester credited to Beeline Extended Workforce Platform include:
- Direct cost reduction due to visibility into rate cards
- Improved efficiency of extended workforce budget approval and hiring
- Costs saved from improved invoice accuracy
More savings likely due to indirect benefits
In addition to these directly quantifiable benefits, Forrester noted that the Beeline clients they interviewed for their report also reported benefits they were not able to quantify, including:
- Improved visibility with a single source of truth for contingent workforce data
- Strong partnership with understanding of business needs and exceptional customer support
- Reduced supplier costs by consolidating the supplier base
- Ensured compliance with laws, regulations, and tenure policies
- Improved security of onboarding and off-boarding processes
- Removed bottlenecks in the approval process using centralized dashboard
- Accessed and integrated data with other key tools and technologies
The world before and after Beeline Extended Workforce Platform
In its Total Economic Impact study, Forrester contrasts the world before and after the implementation of Beeline’s platform.
According to Forrester: “Before using Beeline, organizations didn’t understand how much they were spending on external labor. Managers approved timecards via email and monitored pay via spreadsheets. This antiquated system made it difficult for companies to gain control of the spend or understand the return on investment of costs as they couldn’t see which levers they needed to pull to reduce expenses. One interviewee even told Forrester that prior to using Beeline, they had instances where their company paid contractors twice for the same service.”
“Contingent labor and operations leaders interviewed for this study shared that, after using Beeline, their organizations were able to reduce the amount they spent on functional hires, which led to huge cost savings for their organizations. With access to Beeline’s analytics on talent rates, hiring managers could accurately forecast the cost of the extended workforce talent and ensure that they didn’t go over the bill rates the company had set. For example, interviewees shared that Beeline’s visibility into rate cards enhanced their contingent labor teams’ ability to offer workers competitive rates, which helped them to stay competitive against other companies pursuing the same talent. Moreover, Beeline alerted hiring managers when they tried to offer a rate over the pre-approved limit, which ensured that costs would stay on budget.”
A senior manager of contingent labor at a large retailer told Forrester how, before Beeline, his company often misclassified workers’ locations, often resulting in overpaying them. He said, “We evolved our job taxonomy and rate cards with respect to different locations in regions.”
He went on to say that they will be using Beeline analytics to increase competition among suppliers: “The way we manage our requisitions and how many suppliers we release our requisitions to, we often wonder if we are leveraging enough suppliers. Are we finding the best talent at the lowest cost? Beeline opened those doors for us.”
To read Forrester’s entire study, download it here. To learn more about the next generation of contingent workforce management technology, follow Beeline on LinkedIn or on Twitter at @BeelineVMS.