When to Use a Vendor Management System (VMS)

When your contingent workforce is exploding, check these 10 signs to determine whether your business would benefit from a VMS.

To need a VMS, a company should be using contingent workers on a regular basis. This is a qualifying question for any company considering adopting a VMS. A Vendor Management System can be an essential part of a Company’s strategy to reduce the complexity of its contingent workforce program and manage it effectively.

Contingent workers are a part of the composition of many companies’ total workforce these days, and if your business isn’t already using a VMS, it may be time to consider it. Ask these 10 questions to determine whether you should continue managing your staffing needs internally, or if it would be best to partner with a software provider to better streamline and manage your contingent workforce program.

10 signs you need a VMS:

  1. You’re talking to one of your stakeholders and suddenly they ask you for some concrete details of your contingent workforce program such as spend. If no one did that, you could take this as your cue and consider the question right now and answer it for yourself. If you become painfully aware that you have no idea of how many of your workers are contingent and you also have no idea of the amount you are spending on the program, it’s time you adopted a VMS.

  2. You have an urgent requirement and decide to open the position to your staffing vendor(s). Do you need to have a clear idea of how long it will take for each of the staffing vendors on your list to fill that position? Do you maintain relevant data to work it out for yourself? If your answer to both the above questions is no, then it’s time for you to bring in a software to deal with the tracking of your vendors’ time-to-fill capabilities.

  3. You have never tracked the attrition rate among your contingent workers and you’re not aware of their tenure details after coming on board either. They could be leaving in the middle of an assignment or staying with you for the length of their term or they may be continuing to work for you without your knowledge, for all you know! If your program is unable to provide you with these details, think VMS to plan your workforce better.

  4. You are not sure whether you are compliant with regulatory requirements when bringing these workers on-board – like having your vendor conduct their background, drug testing and financial background checks where required. You are also not aware if anyone is maintaining an audit trail of these checks with impeccable documentation to show for it. This could spell disaster with a capital D, and the time to act is now.

  5. You have so many contingent workers that you find it impossible to track their identities to learn if any of them are former employees. You also cannot confidently assert that none of them are on any of your internal blacklist of employees you had fired and vowed never to re-hire.

  6. You don’t really know how much you’re paying for overtime duties performed by your non-employees. Do you have a foolproof strategy to bring down the number of overtime hours worked by your non-employees?

  7. You regularly find yourself wishing for some insight into the program’s performance and wish to track some key aspects of its management. You would love to have some reports on its key metrics to manage it better. You would be overjoyed if you could have access to the performance of each of the non-employees and their achievements.

  8. You’re not sure if your line managers are doing their own hiring of contingent workers and paying whatever prices they wished, completely bypassing the selected bunch of staffing vendors with whom you have negotiated narrow margins.

  9. You are one of a very select number of people in your organization capable of dealing with vendors, or managing the complex web of events needed to ensure access to the required talent.

  10. You find your projects starting late, being postponed or cancelled as the required human resources are unavailable.

Of course, a VMS is capable of delivering much more value than just the automating your contingent workforce program or bringing in the best practices. But if you’re not sure the answer to either of these ten questions, it’s time to streamline your efforts with a VMS.

Are you happy with the way your contingent workforce program is running? In other words, are you able to optimize the utilization of your contingent workers? Are you unhappy but resisting change, thanks to institutional inertia? How would you recognize that you need an efficient and effective tool that can help you manage your extended workforce?

Doherty offers a customization VMS solution to fit your unique workforce needs. Learn more by visiting

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