As contingent workforce management (CWM) grows in importance for many businesses, stakeholders should align to select the right technology to effectively manage their external workers. Learn more from our guest bloggers from Everest Group, a global research firm.
This article was contributed by Krishna Charan, vice president at Everest Group, and Soumya Bansal, senior analyst at Everest Group.
Talent is valuable to enterprises regardless of the economic environment. Hence, organizations are looking to strategically adapt talent acquisition and management to effectively accommodate different types of workers. Most enterprises today are slowly moving toward total talent management (TTM). By leveraging people, processes, and technologies for both permanent and contingent workers, companies are actively working to build sustainable talent practices. A move toward skills-based hiring, irrespective of the type of talent hired, is also on the rise. This can help address the evolving nature of work, reduce skills gaps, promote diversity, equity, and inclusion, and improve cost efficiencies. Integrating vendor management systems (VMS) and human capital management (HCM) systems is crucial to this evolving solution.
The increasingly strategic emphasis on aligning workforce planning, talent acquisition, and management with long-term business objectives is pushing business leaders to actively participate in skills-related decision-making and management processes. However, the siloed approach to talent acquisition and management still prevents enterprises from achieving holistic TTM. Creating a formal contingent workforce management (CWM) program can be the first step to developing an effective TTM strategy.
Today, successfully implementing a CWM program requires taking into account many diverse players, including staffing suppliers, MSPs, human resources/talent acquisition, IT, procurement, hiring managers, and talent.
When managed effectively, contingent workers can provide several benefits such as increased productivity, higher cost savings, and faster talent deployment. To achieve these benefits, enterprises have started to establish formal CWM programs in-house or with the help of managed service providers (MSPs).
Today, successfully implementing a CWM program requires taking into account many diverse players, including hiring managers, human resources, IT, MSPs, procurement, staffing suppliers, talent acquisition, and talent. Moreover, the growing involvement of business leaders in talent-related decision-making makes it imperative to examine their key challenges and requirements, as well.
In order to address stakeholder considerations, enterprises first need the appropriate technology stack to seamlessly monitor, manage, and pay the contingent workforce. Most importantly, stakeholders require tools that have end-to-end compliance capabilities with internal and external labor rules and regulations. As a result of this need for digitalization, the role of a company’s CIO in implementing new CWM technologies that align with overall business goals has become increasingly important.
VMSs have long been the core technology to streamline and manage the contingent workforce. These systems facilitate a range of activities, including:
In this highly disruptive market, some VMS providers have quickly adapted to changing enterprise requirements with next-generation technologies, deep analytics, and stakeholder-centric approaches. Most VMS providers now serve all extended workforce segments, including temporary workers, services procurement/statements of work, independent contractors, freelancers, and gig workers.
As TTM gains prevalence in the market, many VMS solutions are focusing on seamless integration with other enterprise technologies, especially HCM systems, to provide a comprehensive workforce view and a unified platform for effectively sourcing, hiring, and managing both permanent and contingent workers.
By integrating VMS deeper into the core HCM foundation, data can seamlessly flow between the two systems. Performance management, learning, and development are also unified. Most importantly, this eliminates the need for separate systems and manual data entry, saving time and reducing errors. The result is improved visibility, reporting and analytics, significantly lower costs, and reduced compliance risks—all leading to better overall efficiency, collaboration, and communication.
Enterprises need to start by creating a business case to gain buy-in from all stakeholders and assess existing CWM processes’ strengths and gaps.
Selecting and implementing a VMS can be daunting for many organizations. Enterprises need to start by creating a business case to gain buy-in from all stakeholders and assess existing CWM processes’ strengths and gaps. Factors such as cost savings, deployment efficiency, access to talent pools, capturing rogue and tail spend, and minimizing compliance risks must be carefully evaluated.
Apart from this, to create a more holistic talent management strategy and operationalize TTM, it’s become increasingly important to keep permanent talent acquisition stakeholders in the loop as well for effective planning and change management. This increased transparency and communication between all stakeholders while implementing and integrating the VMS system with HCM systems helps to ensure clear lines of accountability and governance.
Overall, TTM evolution can be complex, and enterprises need to be committed for the long haul. As enterprises undertake this journey, it is crucial to carefully consider partners/providers who not only have robust capabilities currently but also a vision and strategy for the future.
Check out the latest research produced by Everest Group, “Aligning Stakeholders and Technology in Contingent Workforce Management,” to learn more about the core functionalities offered by VMS solutions to address end-to-end stakeholder requirements for CWM.
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