The Changing Financial Services Workforce: 5 Advantages of a Vendor Management System (VMS)

In this article, we discuss:

• Compliance

• Highly competitive resource needs

• Data security and protection

• Spend optimization

• Program process standardization and governance

As workforce decision-making in the financial sector continues to change with the market, it seems like a foregone conclusion that contingent workers will continue to play an ever-increasing role in how these companies overcome challenges. 

For some financial services enterprises, as much as 30% of their workforce is contingent labor. The key to effectively managing this growing group of workers is investing in technology designed to support the external workforce. This is where a vendor management system (VMS) comes in. 

Leveraging Technology to Effectively Manage Contingent Labor

By utilizing a VMS, enterprises gain the capabilities to support the end-to-end lifecycle management of these workers—from sourcing to onboarding, to invoicing, to reporting, and so much more. Businesses gain complete visibility into their contingent workforce and start to factor these workers into total workforce plans. This means that business decisions around hiring are made with a complete picture of the workforce. 

A VMS can support top-of-mind concerns for organizations in the financial space, including:

• Compliance: Attestation requirements are supported with the use of a VMS by tracking the completions of crucial pre-hire activities such as background and credit checks. It can also support managing tenure policies across locations and help keep track of the rehire eligibility of these external workers. 

• Highly competitive resource needs: A VMS can help acquire the external talent needed and get them in place quickly. Collaboration with vendors is greatly improved with engagement capabilities that support streamlined visibility into hiring plans for vendor teams. Job postings, both approved and pending approval, can be made visible to vendors so they can start sourcing for open roles as soon as possible.

• Data security and protection: Cybersecurity and data protection are top of the agenda for the sector, with 76% of companies citing enhanced security as an active priority for technology investments. A VMS can support this area with onboarding and offboarding checklists so key requirements can be ticked off the list as workers join and leave the organization. A VMS that connects with human capital management systems or access management tools is vital to supporting provisioning and, more importantly, deprovisioning. This way, businesses can maintain a real-time view into who has access to what, and can remain confident that access is revoked as contracts end.

• Spend optimization: With budget constraints and cost savings areas of focus, a VMS can help by introducing cost controls through capabilities such as rate card thresholds to enable maximum rates for open roles to be set and enforced with vendors. Approval workflows can be established to ensure only approved spend is invoiced. In addition, companies are supported with analytics capabilities that provide complete visibility into contingent labor spend. When coupled with HCM, this spend data can be viewed alongside full-time employee costs to gain access to total-cost-of-work insights to strengthen those workforce decisions.

• Program process standardization and governance: An innovative VMS introduces next-level process standardization and governance through functionality such as approval workflows for spend, time and expense submittal, invoice creation, and statement of work engagements, as well as visibility into vendor key performance indicators.

Bottom line, with 79% of financial institutions planning to increase their tech spending, reviewing the workforce tech stack and the need for a VMS to support the growing reliance on contingent labor should be seen as a key priority.