Introducing Workday VNDLY: One Workforce, Working Together

The extended workforce—meaning consultants, gig workers, and contract workers—is a growing force in the labor ecosystem, taking up as much as 36% of the workforce in the U.S. and performing as much as 25% of the work in an enterprise. But despite this growth of external workers, talent management systems and practices are typically designed only for full-time workers.

That’s what makes the latest development for VNDLY, a Workday company, all the more compelling: 

VNDLY, a Workday company, is now Workday VNDLY, an extended workforce and vendor management system (VMS) that’s part of Workday’s suite of products. 

Along with the product name change, the user interface will reflect a new look and feel aligned with the Workday brand. These changes demonstrate Workday VNDLY as the only VMS that can directly connect into Workday’s core data foundation. This makes Workday the first enterprise management cloud platform to fully include extended workers in the workforce ecosystem—marking the future of work powered by one workforce, working together.

We chatted with Co-General Managers of Workday VNDLY, Shashank Saxena and Mariana Santiago, to catch up on the latest developments and what’s in store for our VMS system.

Workday’s acquisition of VNDLY closed in December 2021. Let’s bring everyone up to speed: What’s happened since then?  

Saxena: It’s been an exciting time since the acquisition. For background, VNDLY was a Workday Access Partner and the only VMS provider to receive a Workday Certified badge for its integration pre-acquisition. We already had more than two dozen customers using VNDLY’s integration to Workday Human Capital Management (HCM) by the time VNDLY joined Workday.

As a result, we already had a really strong foundation in place, which prompted us to ask ourselves, “Now, how do we take the value we’re delivering for our customers to the next level?” 

Santiago: We’re harnessing the power of the real-time connectivity between Workday HCM and Workday VNDLY to create one workforce optimization solution that enables businesses to plan, execute, and analyze for the entire workforce, not just part of it. At Workday, we could see the shifting workforce dynamic that is becoming more reliant on contingent labor. I was directly hearing about the challenges our customers faced not only in managing these external workers, but also in gaining that total workforce visibility. 

That’s why Workday acquired VNDLY. Shashank’s vision, as former CEO of VNDLY, was different to others in the market in that he knew the future of the VMS was moving toward being more ingrained in a company’s workforce management technology stack. As a result, integration with other applications to bring that ecosystem together was going to be key.

There has been a ton of excitement around Workday VNDLY from our customers. They are benefiting from the value of using Workday VNDLY alongside Workday’s full suite of products because they now have the last puzzle piece to intelligently manage their total workforce—full-time employees, frontline workers, and contingent labor.

What Workday VNDLY product capabilities have customers been asking about?

Santiago: At a high level, our customers are looking at how Workday VNDLY helps them manage their contingent labor as part of their total workforce. HCMs are designed for managing full-time workers. The distinction of Workday HCM compared to other HCMs is the power of leveraging a connected VMS like Workday VNDLY, which gives our customers robust capabilities for contingent labor management—such as vendor collaboration, sourcing optimization, and invoicing—while also addressing common concerns, such as risk and compliance of contingent worker status and properly deprovisioning extended workers from company systems. 

Workday VNDLY can add so much to a business when we look at areas such as operational efficiency, cost savings, and enhanced security protocols. And when fully integrated with Workday HCM, the return on investment only increases as you gain that holistic view of the workforce and can start to leverage other parts of Workday to continually improve extended workforce management.

And the Workday VNDLY journey is just starting. We plan to keep connecting and infusing more intelligence into the Workday VNDLY solution. We plan to infuse more machine learning into Workday VNDLY to bring the power of our Workday platform, such as planning and skills, to the world of the extended workforce to intelligently recommend sourcing strategy, optimize resource allocation when demands change, and guide creation of statements of work based on historical insights.

Saxena: We have a robust, native API-based integration with Workday HCM, and our customers are asking for additional API-based integration with other Workday products, such as with Workday Strategic Sourcing or Workday Financial Management for cost center-based accounting. As an organization, we are taking this feedback onboard and are always looking to continue to enhance and develop our technology with our customer needs in mind.

What’s accelerating the need to have an agile, unified approach to managing a full-time and extended workforce?

Saxena: Consider this: Globally, companies spent roughly $5 trillion on contingent labor in 2021, up from $4.4 trillion in 2020. Spending on contract workers is expected to increase in the coming years. 

But currently, it’s highly likely that the cost of contingent labor is missing from calculating total workforce spend. It’s been reported that as much as 68% of independent workers within an organization aren’t included in workforce budgeting and planning. And that lack of visibility prevents companies from effective workforce planning. 

Another trend driving the need for a unified approach to managing the workforce: Companies are shifting toward a skills-based workforce strategy, and while many specialized skill sets are available within the contingent workforce, companies are likely missing the opportunity to tap into that labor market.

Let’s say you have job openings where the skill sets of your contract labor are a perfect match. However, without a holistic view of the workforce, you’ll miss the opportunity to tap the skills of your extended workforce already within your organization. In addition, contractors with the sought-after skills may be open to converting into full-time employee status, but again, without incorporating them into your workforce strategy, those conversations may never happen.

The labor landscape has gone through rapid change in recent years. It seems like each year there’s a new and urgent labor challenge. What’s the top workforce management challenge in 2023 that Workday VNDLY is helping to address? 

Santiago: One of the ways to empower the contingent workforce is having supportive managers, but managers also need support.

That’s why our team is working on simplifying the product experience for managers. A manager obviously needs to focus on how they manage their teams, and what can get in the way is a lack of visibility into whether their team is a mix of employees and contingent workers, or maybe they’re all contingent workers. A manager needs to see their team as one. 

And that’s what we’ve been focusing on—taking that manager experience to the next level by simplifying it even more. For example, we’re bringing more contingent worker data points into the overall workforce data set in Workday HCM in a format that’s familiar to hiring managers. In addition, we continue to improve the connection between Workday HCM and Workday VNDLY by adding even more functionality that is enabling updates in both products to trigger an update or associated process in the other, greatly simplifying task management.

We also know different capabilities are needed to manage the nuances that come with different worker types. But with the focus on user experience and the refreshed Workday VNDLY user interface, our users don’t see an individual product. Our users go to the system to do what they need to do. And they could be crossing over many different products. So the first area of focus right now is on the manager.

You both have highlighted the value of a holistic view of the total workforce. Can you also speak to how Workday VNDLY helps companies support the differentiated needs of workers based on their classification or role? 

Saxena: Industry nuances are driving differentiated requirements, such as some industries being forecasted to have a higher growth rate of contingent labor than others. For example, in the financial space, some reports suggest as high as 81% of organizations will enlist the services of contingent workers. If we look at the telecommunications space, where highly specialized skills are needed, we’re seeing those businesses come up against issues in accessing the right talent. I saw recently there has been a 170% increase in job posting within that industry between 2020 and 2022, and 67% of companies just can’t get the people they need with the specialized skills they’re looking for. This is a prime opportunity to fill that skills gap with external talent.

Workforce scheduling of contingent workers is another area that needs that differentiated support. Consider the typical staffing scenario in retail, an industry that has a lot of contract hires. Retailers deal with volume hiring in a lot of cases and need to account for seasonal peaks. This, in turn, results in complex, varying shift requirements across employees and any external workers needed to meet demand. Workday VNDLY can tap into the capabilities of Workday Scheduling once integrated with Workday HCM, or connect to other scheduling tools in place, enabling companies with flexible scheduling capabilities for all workers, including suppliers and vendors.

Santiago: Scheduling is an excellent example, exactly as Shashank explained. Also, think about scheduling in the context of a production line in a manufacturing scenario. For the manager who is allocating work and scheduling shifts, they’re thinking “OK, I need more people here, more people there.” They don’t care who is contingent, who is an employee. You need to get work done, right? As a manager or that supervisor, you don’t care about systems integrations or what is happening behind the scenes. 

Workday VNDLY is powering the future of work. And by future of work, I’m referring to the nature of work right now—that it’s boundaryless, meaning a work model that quickly mobilizes organizations to adapt. An example of that is companies extending their worker ecosystems by relying more on their external workforce to fill critical skills gaps, achieve company goals, and scale the business. Can you speak to how Workday VNDLY enables organizations to adapt to a boundaryless nature of work? 

Santiago: Organizations are no longer static. As an organization, you cannot achieve what you need if you are too rigid or static. If you have a dynamic organization, it’s like a living organism that’s moving and adjusting and doing what needs to be done to get to the goal. And that is driving the need to tap into every single worker in your company, not just employees. That’s orchestrating, where you’re identifying the skills and matching up the talent across workforce ecosystems with the needs of the business. The value of Workday VNDLY is that it truly enables dynamic organizations to approach talent as one workforce, working together.