Insights about the Extended Workforce

The world of work is constantly changing and we try our best to keep you informed about those changes. 

VMS to What’s next: Future-proofing your contingent workforce with the right technology

The Vendor Management Systems (VMS) market is shifting. Rapidly changing technology is transforming the future of work, with exponential computational power driving the world and workforce into the Intelligence Revolution. As a result, more and more providers are beginning to transition away from the classic VMS naming conventions for their software and are adopting new language such as “Extended Workforce Platform” or “Non-Employee Management System.”  

But what’s changed and why? Is it a simple case of a name change to represent that the technology will manage more than just vendors? Or is there more to it than that? Does this change in technology represent an opportunity for organizations to leverage new pieces of tech or new components for programs?  

If you’re interested in what’s next for the world of VMS and would like to strengthen your knowledge around the new world of Extended Workforce Management Systems, the information below will help you make informed decisions when it comes to understanding VMS and ‘future-proofing’ your program.

Contingent workforce technology: Vendor Management Systems (VMS)  

According to Staffing Industry Analysts, more than 80 per cent of organizations, including FORTUNE 500 and GLOBAL 1000 companies, have a Vendor Management System in place to manage their contingent workers and contingent work.   
A Vendor Management System is a cloud-based technology software platform that helps to facilitate the process of contingent workforce procurement and contingent workforce management. Employers who invest in VMS technology will streamline vendor performance to better manage labor costs, maximize productivity, ensure compliance and increase efficiency.  

Are there distinct differences between a classic VMS and these “new” systems? 

There are many flavors of today’s VMS technology. Some are called non-Employee Management Systems, Extended Workforce Systems or Agile Work Platforms – And VMS providers agree that a VMS today does so much more than just ‘manage vendors.’  

However, if over 90 per cent of providers and buyers still currently call the solution a VMS, then is there really a difference in function?  Or is the difference actually a business case alignment for change?  

Why a VMS is critical to achieving Total Talent Management 

A Vendor Management System is also essential to achieving Total Talent Management across an entire organization.  
The data and analytics capabilities of a VMS enable organizations to make better enterprise-wide decisions. The management system gives users direct access to the data that allows employers to gauge the success of their programs and make adjustments accordingly. 

The AI technologies that drive a powerful VMS  

Technology solutions that include self-learning or smart algorithms can be considered AI. The terms below include technologies like:   
Artificial Intelligence (AI)Algorithms exhibiting any behaviors that are considered ‘smart’. 
Machine Learning (ML): Algorithms that identify patterns and use these patterns to predict outcomes or make decisions. 
Natural Language Processing (NLP): Algorithms which can interpret, transform and generate human language. 
Robotic Process Automation (RPA): Algorithms that mimic human actions to reduce repetitive, simple tasks. RPA is generally not considered a form of AI.  

Contingent workforce management VMS technology opportunities:  

When organizations have the right VMS technology solutions, employers can gain better control over their contingent workforce management with: 

End-to-end visibility over the entire contingent workforce   

A VMS provides employers with total transparency over their workforce. The information gathered within a VMS grants visibility into who is working for the organization, where the workers are performing the work and the process involved to perform the work. 

It’s imperative to have a VMS as integrated as possible into the other workstream systems that exist within an organization.  

ERP, Project Management, Onboarding, and HRIS systems all factor into the ability to gain visibility over a single source of ‘non-employee’ truth. 
This valuable information provides employers with contingent workforce management insight into the value of each resource – ultimately increasing cost savings, improving worker performance and mitigating risk by enforcing compliance.  

Visibility into DEI and diverse workers 

 VMS technology should also provide employers with visibility into diversity spend and diverse workers. This allows organizations to gain better control over their DEI goals and keep track of important paperwork with onboarding international talent.  

Contingent workforce cost savings  

One of the most significant benefits of a VMS is saving on contingent workforce costs, and managing vendors from a central data hub allows employers to save in many ways. The information assessed within the VMS technology allows employers to: 
• Tap into talent pools already within the system – saving on additional recruitment costs and time to hire. 
• Better manage payroll and flag errors in overtime pay and higher than usual rates. 
• Provide insights into rate cards in order for employers to make better data-driven hiring decisions.    
• Gain access to predictive analytics that provide actionable suggestions for contingent work and contingent worker savings.  

Automate and streamline contingent workforce management processes  

Vendor management solutions will guide users step-by-step through each process associated with procuring external resources. 
From creating a requisition to offboarding, vendor management software will seamlessly complete each task and process. With automation eliminating tedious administrative responsibilities, organizations can save time and money with vendors.  

Accurately track applicants  

A VMS has powerful applicant tracking capabilities that create a more efficient hiring process across all areas of an organization. With automation tackling the administrative tasks associated with onboarding, offboarding and all tasks in between, employers have access to all hiring analytics with the ability to reject or accept any information in the workflows.  

Reporting and analytics on contingent workers  

A Vendor Management System allows organizations to gather comprehensive information on their contingent workers and workforce management program. Employers will have access to information that can accurately evaluate costs, time-to-hire, candidate quality and quantity and the organization’s exposure to risk. These data-driven reports allow organizations to evaluate their numbers against the competition and the industry.  

Efficient processes and compliance  

A Vendor Management System will ensure processes and procedures are consistent across all areas of an organization’s departments and locations – even if their contingent worker programs are managed independently. This capability not only sets the standard approach to management, but also ensures that organizations are compliant with local legislation.  

Vendor integration  

Through a VMS, organizations can track pre-defined performance metrics during the duration of the contract(s) with vendors. This enables employers to gain greater visibility into their vendor relationships and have more control over the selection of their vendors. A vendor management solution that integrates with a VMS can give employers confidence in the quality of services that are being delivered.  

Stronger vendor relationships  

The relationships employers foster with vendors are just as important as the performance of vendors, and employers should continuously work to strengthen these relationships. A VMS will track the performance of vendors, yet it can also solidify relationships with these external partners as well. With effective management of vendors, business leaders can create mutually beneficial processes that build the trust and loyalty needed to keep great vendors as part of the organization’s talent supply chain.  
Creating an internal Vendor Management Office function will also help to form and enrich these vendor relationships.  

Greater administrative efficiencies  

While vendor performance is a significant benefit of a VMS, additional benefits of vendor management include greater administrative efficiencies. 
Acting as a central hub for vendor data and record keeping, a VMS can eliminate data duplication, cut down on administrative costs and clerical errors, while ensuring compliance and better business practices. VMS technology will also help employers better manage relationships with their vendors by ensuring heightened efficiencies and compliance.  

Decrease in time to hire  

Time to hire is one of the most important hiring metrics to Recruiters and Hiring Managers. The VMS technology will give employers access to the automated sourcing solutions that will find talent quickly and effectively. This not only decreases time to hire, but also creates a better candidate experience.  

Ensuring seamless integration of technology  

A familiar pattern emerges with procurement professionals around integration – studies have found just over half of procurement executives surveyed (53 per cent) are “highly informed” about the responsibilities of the service providers, and even less are informed of the duration of work, access to facilities, systems and confidential information, work quality, progress against milestones and/or deliverables, and compliance with licenses and certifications.   
Integrating the VMS into your organization’s IT ecosystem – including Human Resources systems, procurement, supplier systems, access/credentialing systems and ERP/AP tools to start – will provide a seamless end-to-end process.  
If you’re considering a VMS or are re-evaluating your current system, significant operational changes can require a new management solution as you remodel your blended workforce. A Managed Services Provider (MSP) will support these tech changes across the entire contingent workforce delivery.  

Vendor management systems and total talent management  

VMS Technology grants employers the ability to gain control over their workforce while also helping to achieve Total Talent Management in a global and digital economy.  
The best technology platforms will break down silos that exist between Human Resources and Procurement – the keys to achieving total talent management.  
While Human Resources will track performance metrics like vendor engagement and vendor retention, Procurement KPIs will focus on performance metrics like vendor cost and vendor risk. As such, it’s critical for each function to identify and embrace a shared business goal.  

Breaking down silos 

This means breaking down the silos between departments to understand what drives the other business function and what objectives they must meet. Understanding the needs of both business functions and connecting priorities encourages each one to work towards their common performance goal: filling skill gaps with high-quality workers in the most cost effective manner.  
A Vendor Management System can provide the transparency that Human Resources and Procurement Departments need to ensure their business successfully engages and manages both full time employees and contingent workers with the same processes, protocols and efficiencies across the entire business supply chain.  

Maximizing the value of engagement and performance metrics 

With true collaboration between Human Resources and Procurement business functions, and the implementation of the right technology, business leaders can maximize the value of all full time and contingent engagements and performance metrics across the entire talent supply chain process. 

Interested in learning more on how to future proof your VMS program for 2021 and beyond?

Download our free Case Study to learn how Procom’s VMS technology helped one client partner save on contingent workforce costs and more.


Insights by Topic


Job Seeker


Contingent workforce


Hiring Tips

Subscribe via email

Stay up to date with the latest job search information, hiring tips, and contingent workforce insights in your inbox.


VMS to What’s next: Future-proofing your contingent workforce with the right technology

    First Name*

    Last Name*

    Work Email*

    Job Title*

    Company Name*


    We take privacy seriously. By clicking below, you agree to receive product and service related communications from Procom. We will never sell your email address to any 3rd party or send you spam.