Next Generation VMS
Considering Next Generation VMS technology?
The first generation of VMS solutions were Software-as-a-Service platforms designed to serve all customers with one software app. In an era of Total Talent Management and Talent Ecosystems, this technology architecture significantly hampers the ability of VMS vendors to respond to innovation, customization and integration requests.
About Vendor Management Systems (VMS)
VMS platforms have been around for over a decade. In the operation of indirect sourcing procurements for the contingent workforce market, they’ve now become commonplace. It’s thought that the majority of Fortune 500 organizations today either operate their own or pay for a third-party to use on their behalf.
When they arrived on the market, the role of the VMS system was to normalize indirect channels and achieve early-stage economies—by enforcing terms and conditions across supplies, reduce operating costs through automation of workflows, speed up payments and cut out duplication of effort and steps in processes. Systems were expected to take care of the publishing of job opportunities, manage and aggregate vendor responses, simplify scheduling of interviews, address the thorny issue of background check processing, make sure timesheets and expenses were dealt with in a timely and accurate way, then automate the purchase to pay process; resulting in workers, and vendors getting paid the right amount at the right times.
What changed to produce gen-2 solutions?
Well, research conducted by BCG on 11 markets indicates that the IT sector is most affected, where gig work provides the primary source of income for 9% of workers, while 24% see it as an additional income source. From our experience, all industries are now taking their strategies towards an on-demand workforce seriously, with most adopting a Total Talent Management (TTM) ethos in the way they source work.
Whilst general perceptions of the subject are that gig working is only for manual or relatively low-skilled jobs like taxi driving, this isn’t backed up by hiring trends. It’s every bit as likely you’re going to find top-talent and hard-to-reach job skills (like scientific, technical and professional candidates) in the gig economy—because they can achieve higher rates of pay and an improved work-life balance—than in the full-time workforce. Adoption of gig workers is across the board.
Watch our video…
Total Talent Management (TTM) is the latest way to source the talent you need by leveraging the gig economy, operating a joined-up digital talent ecosystem equipped with AI to harvest the people you need to drive your organization forward.
Learn more by watching our short video introduction!
Re-thinking how work gets done
We’re all accustomed to identifying work that needs to be done and hiring someone on a full-time contract to do it. But work packages can be broken down in more ways than one, and approaches fashioned by victorian-era industrialists into hierarchical organisational designs might not be the most appropriate for the digital era!
As time moves forward, we’re seeing work packages becoming more fragmented into smaller and smaller packages. Consider:
1. Job Role Descriptions
Aggregating a series of ‘work to be done’ activities into a job role description is the most common way people have traditionally been hired. The benefit of this is the hiring manager is able to flex the activities within the scope of the role, and it gives the employee an indication of what’s expected of them.
They may be the most common form of work packaging but job descriptions have a HUGE downside:
More often than not, such contracts include a broad sub-point that says something like—‘…and any other duties your manager may ask you to perform to assist in the achievement of departmental objectives.’ These catch-all statements mean that many professionals find they’re asked to discharge tasks that fall outside of the bounds of their subject-matter expertise and beyond the activities they enjoy fulfilling.
They hide the potential of individuals. You can be sure that when someone applies to be an Accounts Payable Clerk, that’s not the only thing they’ve done in their life, or the only experience and skill they have. Much of the potential of a workforce gets lost in multi-layered hierarchical management structures and job descriptions that mean talent is bound tightly to departmental needs; prevented from being leveraged by the rest of the organization.
They distort recruitments. Recruitments focus on finding individuals with the broad skills-set required to fulfil the combination of work built into the ’work package’ as interpreted by the hiring manager. But hiring managers are not organizational designers. This interpretation of work package might not best serve the organization.
They blur contributor performance because it’s not clear how contributors are fulfilling their time, and how well they’re being managed.
2. Discipline or Activity-Led Hiring Briefs
Another form of job description, but with an important nuance: When hiring managers look to hire temp or contingent workers, they will focus contractual requirements (yes, in the form of a job description) more on the fulfilment of a specific discipline or activity, less on ‘and everything else’ departmental needs. This makes it easier for the company, hiring manager and contractor to measure their performance. It also means the contractor is able to focus on the type of work they like and want to do, not end up a dogs body for a department manager trying to make ‘department budget’ ends meet..
A statement of work contract allows a hiring manager to articulate work packages based on project milestones and outcomes. Aligning contractor payment rewards with project outcomes makes a lot of sense. It means workers are incentivised to deliver outcomes, not just turn up. SOWs are proving a great way for hiring managers to make sure they get the quality of work they demand from contractors.
4. Work Tasks
In the gig economy, one of the fastest growing forms of work packages are work tasks. These are normally published on a marketplace portal of tasks that contractors can bid for. This means departmental managers can segment work into tiny packages and pay for results—think of it as a microscopic version of a statement of work! Of course, robots are getting much faster at working through tasks than humans. We can therefore expect more and more work to be distilled into tiny ‘noughts and ones’ tasks in the future, with robots fulfilling more of them than humans!
Smarter resourcing of work at departmental level
Most work allocation happens at a departmental level within an organization and it’s important therefore to re-educate departmental managers on the viability of the various ways of getting a job done; equipping them with the encouragement and knowledge to question ‘norms of behavior’ that may not be in the best interests of the organization (or the payroll budget!).
Ask most CxE’s today, and most believe that the majority of their work activities are performed by full-time employees. In reality, an increasing amount of jobs are being fulfilled by machines (computers, software robots, algorithms, chatbots etc.) and a significant proportion of remaining work tasks are fulfilled by outsourcing firms and members of the gig economy. Knowledge portals and crowdsourcing platforms also win their fair share of work.
When jobs need to be performed, department heads today have more options to consider. This is causing HR and recruitment professionals to encourage a joined-up ‘Total Talent Management’ approach to sourcing work, starting with a thoughtful triage approach that questions hiring norms of behavior that may be founded on ignorance, or the outmoded belief that hiring someone on a full-time contract is always the best solution.
Total Talent Portals: Tech for the gig economy
Changing attitudes and behaviors can be ‘enabled’ by effective Total Talent Management technology ecosystem. This takes the form of an integrated portal (like Simplify TTM!) that equips recruitment teams to work with procurement and IT colleagues to adopt the best approach to getting work done.
Central to the operation of a successful TTM approach are the following factors;
Re-thinking organizational designs
In most companies today, recruitment is a function of HR, separated from procurement and IT. When work may be performed through technology automation, robots, full-time workers, gig workers, knowledge portals, crowd sourcing platforms or outsourcing firms, the best organizational unit to make decisions on how best to fulfil it is a centralized ‘organizational change and improvement team’ responsible for making triage decisions in the best interests of the enterprise; placing business outcomes over departmental aspirational priorities. Separating out these delivery options through different decision-making and sourcing channels only serves to distort the decision making process.
Re-educating your internal audience
Departmental managers that hold a significant influence over how work is packaged and how it’s fulfilled need to be educated in the options at their disposal to get work done, although surprisingly few departmental managers have access to the broad gamut of task delivery options that exist in the market today.
Defining work packages in a smarter way
As we’ve mentioned previously in this article, Total Talent Management has to be seen as part of the solution to equipping organizations with all of the sensible choices of work delivery that exist today, framed by well-designed work packages.
Creating a tailored triage engine that provides outcome recommendations
Core to any effective work-fulfilment engine is a thoughtfully designed triage approach, that today probably includes AI-enabled technology to sift through the available packaging options.
Bringing access to relevant work sourcing options
Unless departmental managers have access to all of the various instruments to fulfil work, they can’t use them!