New talent sourcing approaches are slashing staffing agency costs… but are you missing out because your tech is out of date? Find out what you need to supercharge your VMS and get ahead of the competition.

The relentless move to on-demand talent sourcing

The last few years have seen a widespread move from full-time recruitment of internal employed roles to the contracting of an external workforce. Whether your business today is doing aspects of this, or like many US firms, is running up to half of it’s workforce in this way, harnessing on-demand talent is the way forward.

Why? Principally, because your business needs to adapt fast. Its impossible to reliably predict the volume of recources or skills the business will need from one month to the next. Paying for talent on-demand is what makes companies competitive. Small wonder then that Google, Disney, Boeing, Amazon, L’Oreal, Microsoft, Procter and Gamble, Facebook, Unilever, Walmart, and Gulfstream all now operate armies of contract workers.

Vendor Management Systems – Arguably the poorest description of an enterprise platform ever

According to the talent industry, if you’re looking for a software platform to manage your external workforce, what you’re looking for is a Vendor Management System. This term harks back to the early days of external workforce, when most contractors were sourced through indirect staffing procurement teams, not the HR department. Back then, the focus of any software platform was to manage a supply chain of staffing vendors, the payment of contractors—that sort of thing.

How the world has changed since then. We have seen the emergence of the gig economy, direct sourcing using online portals, Statement of Work (SOW) contracting of labor, the rise of task-based job portals, and more recently career portals. And yet, the trusty VMS rolls on as the most widely understood terminology for external workforce management software.

Supercharging your VMS is easier than you think

Very few of the early market entrants to the VMS space have kept up with advances in the talent industry. That’s understandable, when you consider the industry is over 20 years old, and longstanding VMS providers have reached a size and scale that means it’s assumed anything you need is in the box, even when that’s far from the case.
Fortunately, you don’t have to suffer the disadvantages of operating an outmoded VMS. The joys of cloud computing and SaaS solutions means it’s now possible to retrofit the best-practice tools to your existing VMS without fundamentally altering existing processes. Question is, what can you add on to your VMS and is it worth it?

Here are five examples of must-have grafts that you will want to consider.

1. Direct sourcing

It’s the biggest must-have in the talent industry today. Direct sourcing allows companies to leverage their brand appeal to build their own on-demand talent pool. A direct sourcing platform lets you reach out directly to potential candidates who find your digital job board, or hunt out your social media presence. This approach allows businesses to save thousands on staffing vendor costs. Additionally, it is usual for the quality of candidates (and their productivity) to be higher, because these applicants WANT to work for your business. Also, you can prepare applicants as they join your talent pool, so they are ‘ready to be employed.’

2. Statement of Work

Statement of Work (SOW) contracts allow businesses to pay for the completion of jobs, projects or outcomes, rather that for the amount of time spent working.  It’s easily argued that SOW contracts are good for both parties, as contractors know what’s expected of them, and the reward they will receive, while the contracting businesses pay for results. However, like most new processes, SOW contracts can be time consuming to draft and project manage. For this reason, SOW digital platforms have emerged to minimize the resourcing and management burdens of running these contracts.

3. 24/7 talent and workforce engagement with AI chatbots

When chatbots were first introduced to the business world, their future looked promising. However, fact is that an untrained chatbot is really no better than an untrained customer service agent. New AI powered training platforms are changing that. Combining neurolinguistic understanding with machine learning capabilities, they continually educate bots in what enquirers really want. This intent based understanding turns a chatbot into a highly capable assistant. The talent industry is using these intelligent chatbots to answer external worker questions on a 24/7 basis.

4. IC compliance vetting with AI

IC compliance vetting is essential to ensure your business doesn’t employ individuals on the wrong terms. This could put the business on a collision course with tax authorities tasked with clamping down law-breaking firms.

Delays and inaccuracies in IC compliance cost businesses millions of dollars every year. Thankfully, artificial intelligence can help streamline IC compliance. Script-based online platforms enable applicants to go through compliance questionnaires online, any time of the day. This also means that non-compliance risks are quickly flagged to administrators.

5. Pay analytics

Saving the best for last, no business wants to pay over the odds for its talent. Yet, not paying enough for the right skills and experience could find you with low fill rates, poor quality candidates—or both. Modern pay analytics platforms allow recruitment teams to calculate the optimal pricing points for roles based on a number of variables, including job titles, role characteristics, location, experience, qualifications, etc. It means you get the right person, with the right skills, in the right place, time, and price.

Don’t have a VMS?

According to industry analysts, 70% of all US companies operate some form of a Vendor Management System. That figure drops to less than 30% in other parts of the world. If you don’t already have a VMS, you’re going to need a system to manage your external workforce in the next two to three years.

What makes matters slightly more confusing is the fact that some of the best technology alternatives are positioning themselves under new banners like Talent Engagement Portals, Career Portals, etc. Rest assured, if you delve into this marketplace, it’s likely you will soon be able to work out the providers who can support your needs.

Discover how Simplify Workforce can supercharge your VMS.

Request a demo today.

Ian Tomlin

Ian Tomlin


Ian Tomlin is a marketer, entrepreneur, business leader and management consultant. His passion is to help make great ideas happen. Relentlessly optimistic about the potential of technology for good, Ian’s 30+ year career has focused around the intersect of strategy, technology and marketing. He writes on subjects including workforce management, future of work, talent acquisition technology and organizational design.
Ian has written books, articles and guides on brand, digital transformation, enterprise applications, data science, and organizational design. He can be reached via LinkedIn or Twitter.