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The Benefits of Vendor Management Systems (VMS) on Employee Workforce Management

Managing a contingent workforce with hundreds of contractors is a time-consuming, and often costly task to manage. If an employer does not have the bandwidth or systems to manage an internal team to properly screen and qualify candidates, they can seek solace in the form of Vendor Management Systems (VMS).

What is a VMS? A Vendor Management Systems (VMS) is an internet-enabled, often web-based application that allows organizations to manage and obtain temporary and permanent staffing services. Features of these systems include order distribution, consolidated billing, and significant enhancements in reporting abilities. These systems not only support the order requisition and candidate submittal process, but provide support components or modules that enable time, expense and reporting capabilities to the benefit of both the employer and vendor.

Process management is a large component of the system, however the tools used in VMS often allow employers to access a wide range of reporting to view the service vendors are providing, monitor vendor’s finances spent on accounts, and examine time sheets and expenses that associates are submitting once they’ve been hired.

What value does this service bring to employers?

Reduced Costs: By reducing costs, employers can then eliminate purchases made within an organization that are not in compliance with negotiated contract terms, which in turn works to reduce waste and fraud reduction, and implement structured/rapid implementation methodologies which all in turn have an impact on added costs that build up when there are no formal systems in place to monitor vendor processes. Tracking fees associated with the staffing process enables employers to closely monitor their vendors, ensuring they comply with the terms and conditions of the contract they’ve signed so no fees go over intended budgets.


Corporate Compliance: VMS Compliance systems manage contractual compliance, which includes a standardization of all contingent staffing processes. This process includes bill rate standardization/management and incorporating consolidated invoicing functions. In addition to the standardization processes, the benefit of VMS is streamlined requisition approval. All of these items enable employers to monitor contractual processes which will in turn reduce the number of contract infringements on behalf of vendors, in addition to providing employers with a series of systems in place to track and monitor progress.

Measurable Results: Tools often allow employers to gain access to vendor performance tracking, which displays fill times and additional information that employers can use to evaluate the vendors performance. An added benefit of VMS is that certain providers allow real-time reporting, so employers can get up-to-date information to check the status of their staffing projects.

Increased Efficiencies: With the involvement of a third party vendor, employers are able to increase overall efficiencies such as reduced time-to-fill cycle times, which refers to the process of submitting an order and having it filled within a certain timeframe. An added efficiency comes in the form of proper management through these dedicated tools, and improved security of confidential files. If an employer’s company does not have the appropriate means to safely secure files, VMS tools provide a safe haven for confidential documents. Overall, processes run smoothly when managed by a VMS team that is dedicated to ensuring both parties (employers and vendors) meet all requirements of the project.

In addition to the items above, vendor tools can also be found to enhance items such as requisitions, approvals, time management, expense management, payment and reporting.

Advantages of VMS for vendor compliance

Compliance through Technology

Tools and their integrated functions enable vendors to effectively manage the needs of employers, while enhancing their contract compliance capabilities.  Specifically, these systems enable vendors to provide front-end data validation which reduces the number of errors during entry of staffing orders being filled.

In addition to the reduction of errors, contract administrators enter the employer’s service requirements including invoice/reporting needs and contract bill rates, information which is then available to all vendors at the beginning of the staffing program. As a result, correct bill rates are automatically applied whenever an order is placed, reducing the back-and-forth that is a result of vendors and employers not being on the same page. Plus, this ensures vendors are putting forth candidates with the proper rates.  Consolidated billing item and bill rate control ensure all vendors comply with the agreed upon rate card. This process helps streamline and standardize the process of communication by giving a new face to electronic communication where messages can be broadcasted to all vendors and archived within the tool for future reference. Also, to make certain that vendors are addressing an employer’s requirements, tools give vendors the option to review or update items periodically.  VMS tools can validate information so that vendors will comply with requirements that are applied and processed to fill all of the employer’s ordering, time capture, billing and reporting needs.

Third party VMS tools deliver attainable solutions to employers seeking  to improve vendor compliance issues, along with the added perk of reduced costs and complete control over managing a contingent workforce.

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