For nearly two decades, the processes that most companies use to source, hire and manage workers have existed in two separate, parallel silos, with traditional employees in one and with non-employee, contingent workers in the other. On the employee side, HR departments have had robust, formalized protocols and resources for every step of the process. The opposite has been true for contingent workers, especially at companies that do not have a vendor management system (VMS) in place to create a unified platform to bring order to the ad hoc, highly-inconsistent way these workers have typically been acquired and managed. VMS systems have dramatically narrowed that gap between those silos, but most HR departments continue to have far more tools and resources for steps such as talent sourcing, interviewing, candidate assessment, compliance protocols and more. That gap is about to disappear, though, and it’s because of a wave of growth in new products that complement and integrate within existing VMS systems.
Typically, when people talk about innovation and VMS systems, they simply focus on the features in the software itself, but that’s not the only area where innovation is happening. I am seeing an explosion of new, original solutions that link to VMS systems and deliver tools that have never been available through a VMS before. This enables a streamlined and replicable process for finding, hiring and managing contingent talent.
Many of these mirror the technologies that have given HR a leg up for so many years, which means that companies can make their contingent workforce management as robust as for traditional employees for the first time.
As readers of SIA’s blog certainly know, this is critically important because contingent worker hiring is often managed by different department heads and hiring managers using different vendors and approaches with different processes, services and price points. The result is a fragmented model riddled with inconsistencies, inefficiencies and serious compliance risks. Supplier relationships suffer and great talent can easily slip through the cracks.As the number of non-employee workers grow — with many companies approaching the 40-50% mark for the portion of their workforce comprised of these workers — that means missed opportunities and lost ground against competitors who are doing more to win the war for talent.
What do these new VMS-integrated solutions look like? Hiring is one of the areas where some of the most interesting work is being done. All of that is done through the VMS in a way that makes the hiring process more efficient and faster. This is just one of the ways that the gap between hiring on the HR side and hiring on the contingent side is shrinking.
Another example involves compliance, where there has traditionally been an enormous gap between the two types of workers. HR departments have highly formalized compliance protocols in place for employees, but that has largely been absent on the contingent side, creating liability and risk in the process. Companies are linking their solutions into the VMS to bring it to contingent worker management, such as HireRight’s background check and security protocols and Montage’s video interviewing solutions, bringing parity between employee and non-employee worker hiring.
Technology solutions such as these that help source, hire, manage, onboard and offboard contingent workers must work in tandem with the existing VMS – and must deliver even more functionality and value to its users, which include both customers and MSP partners. This is going to be a really exciting time for VMS users and it represents a major step toward the ultimate goal of giving companies a means of managing their entire workforce that is just as robust for contingent workers as it is for traditional employees. Even just a decade ago, you would get laughed at if you said that the tools for both parts of the workforce would be on par with one another. But it’s coming true as we speak, and that’s a very exciting thing for the VMS industry and for the companies that use these platforms.