This blog was originally posted on in November 2022.

According to the CXC Contingent Workforce Global Trends Report, 77% of executives believe that freelance and gig workers will substantially replace full-time employees within the next five years. As a result, a growing number of today’s businesses need innovative workforce technology that can support strategies for both their full-time and extended workers. 

While a vendor management system (VMS) is traditionally associated with the contingent workforce, this technology can provide the support you need to scale both your full-time and contingent workers. By implementing a VMS and seamlessly integrating it with a human capital management (HCM) solution, your company is one step closer to embracing the future of total workforce management.

What Is Total Workforce Management? 

Total workforce management refers to a strategy of managing both full-time and contingent workers using a single, cohesive system. This enables a company to better understand workforce costs, streamline important on/offboarding processes, and track all employees across their various locations.

By providing increased visibility, total workforce management empowers companies to better plan for upcoming work and prepare for unexpected challenges.

By providing increased visibility, total workforce management empowers companies to better plan for upcoming work and prepare for unexpected challenges. As a result, organizations have the agility to pivot as needed, making it easier to ramp up or slow down as the market shifts. 

Connecting Your VMS and HCM to Manage the Total Workforce

As the workforce evolves, VMS and HCM solutions are both necessary tools for navigating the rapidly changing market. While many companies employ both, they’re often kept separate and handled by individual teams. 

Adopting technology that connects seamlessly and provides a single system for sourcing, hiring, and managing your full-time and contingent workforce is the first step toward total workforce management. A quality, native connection between HCM and VMS provides a holistic workforce view that allows data to be shared quickly and efficiently. The resulting information can be used to make more informed hiring choices and other strategic decisions. 

The connection between our VMS and Workday Human Capital Management is a good example of a fully aligned technology ecosystem. Leveraging application programming interfaces (APIs), we’ve created a seamless connection between our VMS and HCM systems. By using APIs as opposed to a secure file transfer protocol (SFTP), the connection reduces manual processes and facilitates real-time data transfers. This brings many business benefits such as process optimization, reduced manual effort, reduced risk of data security breaches, increased data accuracy, improved and consistent employee experiences, as well as a sophisticated system to support direct sourcing efforts. 

Modernizing Direct Sourcing

Direct sourcing models—in which companies leverage their brand power to attract and hire talent directly, as opposed to using third-party services—are a core part of many organizations’ hiring strategies. Historically, a company would manage its direct sourcing by white-labeling the most popular job board at the time or working with staffing agencies on recruitment. Now, many VMS systems have a built-in recruitment platform with talent pools to facilitate direct sourcing. 

When working with a fully aligned VMS and HCM platform, organizations are often able to do all of their direct sourcing through their HCM, whether for contractors or full-time employees.

For example, David Somers, group general manager of oCHRO products at Workday, discussed how companies will be empowered to directly source contingent labor through Workday Recruiting. Organizations using this system will be able to optimize processes and practices across all worker types to realize even greater workforce value and agility. Data quality will be significantly improved with the incorporation of both full-time and external employees—resulting in more informed decision-making that drives business success.

In addition, applicants who apply for full-time positions will be able to identify their willingness to consider contractor roles, therefore broadening the talent pool across all role types. Organizations will be able to assign specific learning and safety courses by worker type through Workday Learning, as well as discovering insights into employee engagement scores by worker mix through Workday reporting and analytics—and so much more. 

Leveraging the “Hub” Model 

Bringing together a VMS and HCM also offers organizations the opportunity to move to a “hub” model. Under this model, two integrated systems are used to track and manage your workforce, seamlessly transferring data to each other. This allows the HCM to become a hub for provisioning and deprovisioning across badging, network access, and email for the complete workforce including contingent labor. Confining these activities to a single system helps companies strengthen security protocols across the entire workforce and significantly reduces the likelihood of sensitive information being accessed post-employment. It also prevents falling into a “swivel- chair” solution, where manual data entry is completed separately in the VMS and HCM platforms, leaving data efficacy subject to human error.

Under this model, two integrated systems are used to track and manage your workforce, seamlessly transferring data to each other.

Workday offers a hub model—providing customers who use both our VMS and HCM systems with significant benefits. As Joe Hoskins, vice president, director of human resources systems and operations at First Financial Bank, who uses a hub model, says: “Prior to using the integration between Workday and VNDLY, our team had a manual process for transmitting data to VNDLY. Through the integration, we can pull data directly from Workday into VNDLY to keep everything in sync. This not only provides us with more efficient system administration, but also a seamless experience for our hiring managers who have access to the correct data in both systems.”

With a VMS and HCM platform working together, organizations can better align processes and leverage data from both systems to meet business and functional needs. Stakeholders can decide if certain tasks should be worked from their VMS or HCM. This allows the system to reflect business processes accurately and also deliver a user-friendly experience that drives adoption.

Ultimately, bringing together your VMS and HCM platforms increases data efficacy, decreases manual labor, and allows your team to rapidly change when necessary. With a seamless system, your team will have everything necessary to successfully manage your growing contingent workforce.

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