search

    white paper

    The digital playbook for your contingent workforce

    August 7, 2025

    Table of Contents

    Up to half of the people working for your company are not your employees. What do you know about them?

    50%
    of the average company’s workforce today consists of non-employee talent.
    158%
    return on investment in three years with Beeline VMS.

    According to Ardent Partners/Future of Work Exchange, nearly 50% of the average company’s workforce today consists of non-employee talent. This includes temporary workers, independent contractors, consultants, and various outsourced service providers.

    But whether your workforce includes 50% or 5% of nonemployee workers, these workers must be managed efficiently, cost-effectively, and in compliance with a growing number of laws and regulations.

    The case for centralized contingent workforce management

    For this reason, businesses establish centralized contingent workforce programs – usually within their Procurement or Human Resource organizations – to track and manage the company’s external workers.

    As a starting point, a well-run contingent workforce program is able to report, at any given time:

    • Who is working for the company
    • Where are they whe
    • What they are doing
    • What access they have to company facilities, equipment, networks, and data, including intellectual property

    In addition, the contingent workforce program office must know how to contact each individual (a concern that became critically important during the pandemic)and know their status regarding health and safety issues, mandatory training, and other requirements.

    A centralized contingent workforce program also provides a vital service by controlling the engagement of temporary workers, contractors, and service providers. Without this function, it is impossible to control contingent workforce budgets, which can be shattered by rogue spending and unsupervised sweetheart deals.

    Automating the control of costs, compliance, and efficiency

    Because of the growing complexity of sourcing and managing external workers, 81% of US companies with more than 1,000 employees have implemented contingent workforce automation software solutions known as vendor management systems (VMS).

    A VMS can reduce costs, improve talent quality,  enhance workforce visibility, mitigate compliance risks, and increase operational efficiency. VMS offerings have predominantly catered to large enterprises, but now there is a VMS that enables companies of any size to realize these same benefits.

    Forrester Consulting estimates that a VMS can pay for itself in less than three months and deliver a 158% ROI over three years.

    How to know if you need a VMS

    If you are responsible for managing your company’s external workforce, you know that managing workers and staffing suppliers using email,spreadsheets, and manual record-keeping can be an extremely time-consuming process. If you are also responsible for sourcing statement of work (SOW)-based service contractors and consultants, the complexity can be almost overwhelming.

    While there are no fixed rules for determining when it becomes cost-effective to implement a VMS, ask yourself a few basic questions:

    1. Does your company use 50 or more temporary workers or contractors (including consultants, non-employee maintenance, security, facilities, or food service staff)?
    2. Do you know how many temps, contractors, or other contingent workers are working for the company right now?
    3. Do you know how much your company spends per year on contingent labor?
    4. Do you use five or more suppliers (e.g., temp agencies, recruiters, etc.) to provide contingent labor?
    5. Do you know what laws and regulations companies that use contingent labor must follow?
    6. Do you have a way to measure the quality of your contingent workers or staffing suppliers?

    If your company uses more than 50 external workers per year or spends more than $5 million annually on contingent staff or contracted services, a VMS could easily pay for itself through increased efficiency. If you answered “no” to questions five and six, a VMS will help you mitigate risks and increase the productivity of your external workforce.

    People working in an office

    Take control of your contingent workforce

    Contingent labor and outsourced service contractors give businesses the agility they need to respond to market threats and opportunities. Using a VMS to source and manage your contingent workforce gives you the necessary oversight and control to deliver the talent your company needs quickly, cost-effectively, and with a minimum of risk.

    Control starts with visibility. A VMS gives you comprehensive visibility into your contingent workforce and related spend, allowing you to answer six important questions for your executives:

    1. What is the composition of our non-employee workforce?
    2. What access do they have to our facilities,  systems, and intellectual property?
    3. How can we be sure this access is discontinued when their assignments are completed?
    4. Are these non-employees properly classified for tax purposes?
    5. How much are we paying for specific skill sets?”
    6. Are we leveraging our suppliers and distributing work efficiently?”

    The VMS reporting enables you to make better business decisions by revealing the types of labor your company is using as well as how and where you are spending money for contract and project-based labor.

    Controlling human capital costs. A VMS empowers you to eliminate rogue labor engagement and maverick spend. You can obtain direct savings by consolidating suppliers and benchmarking rates and indirect savings through process improvements like consolidated invoicing, eliminating timecard and invoice errors, and compliance tracking.

    With a VMS, you can:

    1. Review and analyze vendor rates
    2. Analyze and reduce overtime usage
    3. Consolidate budget tracking
    4. Negotiate supplier discounts
    5. Track and analyze turnover
    6. Increase your spend forecast accuracy

    By sourcing all external workers through your VMS, you can protect your company from uncontrolled labor engagement and eliminate any “invisible workforce” not included in your budget.

    side profile of man working on laptop computer

    Controlling compliance risks. As contingent labor increases, the compliance challenge grows. Governments want to ensure that workers are properly classified for tax and benefits purposes. Equally important, companies need to ensure that their hiring policies – and non-employee engagement policies – are properly followed.

    Your VMS provides visibility of all stages of the procurement lifecycle, enabling you to enforce company procurement policies. It can also limit exposure to worker misclassification, co-employment, and other legal and regulatory compliance risks.

    Quality control. Use your VMS to measure and monitor the performance of your suppliers and nonemployee workers while creating efficient processes for acquiring, onboarding, and offboarding talent.

    A VMS can give you a more complete picture of the quality of your external workforce, including:

    1. Billed hours and cost per contingent worker
    2. Project talent cost
    3. Contingent worker (and hiring manager) performance
    4. Milestone and project completion
    5. Number of re-engagements
    6. Contract extensions

    Controlling operational efficiency. It is no longer cost-effective to manage this labor manually or on a distributed, departmental basis. Instead, virtually all major enterprises have established centralized contingent workforce management functions to source and manage non-employee talent.

    Here are 10 ways a VMS can increase process efficiency:

    1. Guides hiring managers in the creation of job requisitions
    2. Distributes job requisitions to suppliers in accordance with approved procedures
    3. Automates candidate review and evaluation process, including scheduling and tracking interviews
    4. Allows for rate negotiation
    5. Provides consistent onboarding/offboarding
    6. Manages timekeeping and expense reporting
    7. Automates the entire accounting and billing process, including application of local tax rules
    8. Automates worker offboarding, ensuring that all assets are returned and security access terminates when the assignment ends
    9. Integrates with enterprise ERP, HRIS, and other systems for accurate, error-free data exchange
    10. Provides an auditable system of record for all contingent workforce data
    professional woman standing, smiling in office meeting with others

    Best-in-class technology scaled to fit your business

    Since 2021, Everest Group has published an annual analysis of the VMS market. Their PEAK Matrix® Assessment reviews the market impact, vision, and capabilities of VMS providers worldwide. This Everest Group report will be of interest to businesses of all sizes that are thinking of implementing a VMS or upgrading an existing VMS system.

    Everest’s assessment of 22 leading VMS providers details not only the products’ features and functionality but also the global VMS landscape by geographies, industries, and job types supported. The 114-page 2024 report rates Beeline as a Leader and Star Performer in this product category for the fourth straight year.

    One reason cited for Beeline’s selection as a Star Performer in 2024 was Beeline Professional, a VMS solution tailored for mid-sized contingent workforce programs. Everest Group also noted that Beeline continues to be one of the largest providers of managed spend.

    The time to digitally transform your contingent workforce is now

    As reliance on contingent talent continues its upward trajectory and managing an external workforce grows more complex, a VMS is now an essential business tool.

    With a VMS, companies can position themselves to navigate the challenges of contingent workforce sourcing and management. They can also leverage external talent as a strategic asset for driving innovation and growth.

    In this era of constant change and evolving workforce dynamics, digitally transforming extended workforce management with a VMS is a vital step towards securing a competitive edge and future-proofing your business.