Managing your company's talent and contractor workforce is a daunting task for any organization, so it's no surprise that there are now hundreds of Vendor Management Systems (VMS) on the market. In fact, the vendor management systems marketplace is exploding.
But before you jump the gun and start the evaluation process, it's important to realize that the key factor driving your decision to purchase a VMS should be the number of contractors or consultants you are managing, i.e., your total transaction volume.
Companies managing under 200 consultants do not need to purchase costly VMS technology tools.
There are many other low-cost, quick-to-implement vendor management options available.
Over the past 20 years spent helping many organizations with their vendor management and talent requirements, we've found that mid-market companies managing less than 200 consultants annually are not well-suited to a heavy technology-driven VMS solution. These companies don't need to invest significant dollars, training time, process reengineering, and resources on an expensive IT tool. In fact, they can benefit more from hybrid approaches that emphasize the role of people and processes in vendor management, supported by technology.
So, what are these alternative or hybrid approaches? And how do you know what's the best VMS solution for your organization?
There are plenty of options available, from recruiting process outsourcing to personalized vendor management. It’s important to know that you are not restricted to just one option. There’s always someone out there willing to offer a fresh idea.
Personalized Vendor Management: The Human Side of VMS
A personalized VMS emphasizes the role of people and process as the driving force for efficiently managing vendors and staffing requirements. Instead of relying on the rigidity of a VMS technology to dictate the procurement process, this approach puts an Account Manager—supported by a team of dedicated recruiters and subcontractors—at the heart of the process.
The account management team develops a strong understanding of the company’s business needs and cultural drivers, enabling it to find best-fit candidates quickly. The team doesn’t use a technology tool to direct the workflow and shield hiring managers’ participation in the process. Instead, the account management team works directly with hiring mangers to prioritize requirements and communicate candidate information. The hiring manager has the option to use the technology (applicant tracking system) running in the background; or to leave the technology management to the recruiters they have come to know and trust.
Similar to a technology-centric VMS, a personalized vendor management team is accountable to the procurement and finance organization for cost containment, vendor management and service-level reporting. Unlike a technology-centered solution, there are no expensive technologies to license or implement, deployment speed is as fast as a client can manage, and reporting and metrics are determined exclusively by a client’s needs; not the limitations of the software.
We have successfully implemented this personalized vendor management solution for several of our clients and they've experienced benefits like:
- Higher hit rates, better candidates: A person, not a system, can distinguish between a rock star candidate and an average candidate. Instead of delivering 30 resumes for one requirement, a recruiter only presents two to three candidates who have been carefully pre-screened and vetted based on the Account Manager’s close relationship with the hiring manager.
- Limited change management: A human-run vendor management solution doesn’t force major changes to your existing procurement process. Large technology implementations, on the other hand, require significant change management and process redesign.
- Faster adoption: Asking hiring managers to learn a new technology tool requires lengthy ramp-up times. Removing this burden results in faster implementation speeds and higher adoption rates.
Celerity's vendor management approach for mid-market companies puts smarts people at the center of the VMS process. They respond and adapt to unique client needs and access technology as needed for managing candidate workflow, analytics and reporting.
VMS Technology Does Makes Sense when...
While VMS software solutions can help simplify how companies source, procure and manage their contractor community, they are not the right solution for every company and often diminish the human component required for locating top-notch talent. VMS software makes more financial and business sense when managing a significant number of contractors (400+) and high transactional volume, thus requiring automation and integration into client systems. In those cases, the lack of personal attention to a hiring manager’s needs is the trade off for being able to manage a large contractor labor pool.
The bottom line? Realize you have options and alternatives. And if you are a mid-market company managing fewer than 200 contractors, you can effectively manage your contractor pool using a hybrid or more human-centric approach.
With refined talent practices, learn how Celerity is perfectly positioned to manage your network of vendors, partners, suppliers and consultants