Businesses have not yet fully adopted the technology to meet the shift in the market. As technology is the fundamental ingredient to the operation of an external workforce strategy, businesses must reevaluate their Vendor Management Systems for them to be able to reach their full potential.
What’s changing in the market?
While some businesses are enjoying rapid growth, others are looking to slim down their workforce in response to increasing labor costs and a more general slowdown in the market. All this points to the talent market increasingly shifting towards an external workforce, for both businesses and individuals.
The external workforce can help organizations achieve their talent demands, and businesses are beginning to realize this. This itself has demonstrated that having a large proportion of payroll coming from the external workforce can increase both financial efficiency and time to completion.
Similarly, individuals have increasingly prioritized their personal and mental well-being over full-time employment. Instead of loyalty to a single employer, workers are choosing to be loyal to themselves. Those who have become embedded in the external workforce ecosystem have chosen to build their work life around their personal needs, rather than the other way around.
Previous iterations of VMS platforms were not built to deal with the increasing intensity and turnover of external workers.
Gen 1 – What has come before?
Consequently, they did not meet the needs of any other internal department. Yet, in less than a decade, these platforms have transformed from a simple system of records to end-to-end external workforce management portals.
Gen 2 – What do most currently have?
One big limitation of second-gen VMS software was that many of the providers assumed that all customers should be deployed onto the same platform. This meant that there was little scope for customization by organizations. These systems now appear noticeably pre-pandemic. They do not cater for multiple stakeholders or any of the features that are needed for end-to-end talent management.
Gen 3 – What is yet to come?
Moreover, Gen 3 platforms allow candidates to build a relationship with a particular employer. Rather than taking one job after another, they can build long-term relationships in the external workforce. This requires more than just the procurement-based modules, but rather ones that cater for the more “softer aspects” of employment.
This specifically means that these platforms can track the training and recognition of workers, and even allow to monitor candidate well-being to further the scope for retention. These features are essential for any employer looking to rethink their external workforce strategy.
Why organizations should look to innovation to navigate the changing market
These workers are specifically looking for the soft aspects of external workforce hiring that only Gen 3 can provide. Instead of having an entirely procurement-based VMS, organizations should rightly champion a technology-led overhaul of their external workforce.
For many organizations that already operate a VMS platform, this means they need to consider the pains and gains of their current technology. Whilst it may seem a laborsome task to upgrade your system, particularly if it is meeting your current needs, it is essential to future talent planning.
With the fundamental shift in the talent market towards the external workforce, companies should not fall behind by prioritizing the present. Here organizations should not be afraid to innovate. 2022 is the perfect time to overhaul your talent strategy and technology systems. Only those who do will be able to reap the rewards.