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Struggling with Vendor Management? You’re Not Alone.

Vendor management involves overseeing relationships with staffing vendors and third-party agencies. The goal is to supervise and control the staffing process from onboarding to the final payment.

Vendor management teams leverage the expertise of external staffing vendors to optimize the recruitment process. Efficiently managing these relationships enables companies to access large pools of qualified candidates, enhances hiring efficiency, and reduces time-to-fill.

Unfortunately, many teams struggle with vendor management. Improperly managing vendors impacts the effectiveness of the process.

Why Vendor Management Matters in a Contingent Workforce World

There are many reasons why vendor management is essential for contingent workforce solutions:

  • Fostering positive relationships helps vendors understand a company’s business needs.
  • Vendor relationships impact the longevity of agreements, collaboration, and goal attainment.
  • Nurturing vendor relationships enhances customer service, product quality, and cost efficiency.
  • A company can increase its competitive advantage, such as through access to exclusive candidate pools.

Increased Reliance on Staffing Vendors

Companies increasingly rely on staffing vendors for flexible and contract-based hiring for the following reasons:

  • Access to specialized talent
  • Fast hiring process
  • Scalability
  • Risk minimization
  • Cost efficiency
  • Compliance

However, working with multiple staffing vendors increases complexity across departments and locations, potentially leading to adverse results:

  • Poor candidate screening
  • Disconnected communication
  • Inconsistent staffing coverage
  • Inefficient workflows
  • High turnover
  • Compliance risks

The Cost of Poor Vendor Oversight

Poor vendor oversight increases company costs in these areas:

  • Cyber threats: Proper vendor management strengthens cybersecurity, protecting confidential company, employee, and customer data. Conversely, vendors who do not meet stringent cybersecurity standards increase the risk of data breaches, potential legal battles, and reputational damage.
  • Supply chain disruptions: Effective vendor oversight is needed to minimize supply chain disruptions that impact production schedules and cause delays. Otherwise, the company could miss business opportunities, reduce customer satisfaction, and lower revenue.
  • Operational inefficiencies: An efficient system is required to evaluate vendor performance, negotiate favorable contracts, and monitor service levels. Otherwise, the company risks overspending on goods and services. The results can include missed opportunities for cost savings, ineffective negotiations, and maintaining relationships with underperforming vendors.
  • Compliance issues: Vendors must adhere to industry standards and regulatory requirements. If they do not, the company could face legal and financial penalties. These factors erode customer and stakeholder trust.

The Most Common Vendor Management Mistakes

The following are common vendor management mistakes:

Lack of Centralized Visibility

A lack of centralized visibility creates disconnected processes across departments and locations, leading to the following results:

  • Scattered data: Fragmented data prevents a clear picture of the vendor ecosystem, increasing the likelihood of working with outdated information.
  • Inefficiency: Manually handling administrative processes takes away time that could be spent on strategic sourcing or supplier development.
  • Errors: Entering administrative data increases the risk of typos, duplicates, and missed updates. Small errors can cause big problems, potentially leading to payment delays and compliance issues.
  • Costs: Process delays increase operational costs. Hunting down information takes away time from strategic initiatives.
  • Compliance: Incomplete or scattered vendor information is a significant liability during audits. The company can face fines and reputational damage.
  • Fraud: A decentralized system lacks built-in controls and alerts, increasing the risk of fraudulent updates to bank information or business addresses going unnoticed.

Inconsistent Rate Management

Inconsistent rate management can lead to the following:

  • Operational inefficiencies: Manually managing pricing models and billing cycles is labor-intensive and prone to errors. Inconsistent rates can cause confusion and delays, impacting business operations.
  • Difficult data comparisons: Inconsistent reporting of vendor rates increases the difficulty of comparing performance across periods and entities.
  • Impaired decision-making: Inconsistent data provides unreliable information supporting resource allocation, budgeting, and forecasting.
  • Customer disputes: Inconsistent pricing can lead to customer problems, reducing trust, satisfaction, and loyalty.
  • Financial losses: Customers can be under- or overcharged, resulting in revenue loss, customer disputes, and churn.
  • Reputational damage: Customers who feel deceived by inconsistent pricing are likely to leave negative reviews online, stop renewing contracts, and harm the company’s reputation.

Poor Compliance and Documentation

Improper documentation can cause a company to fall out of workforce compliance, increasing the risk of audit failures and legal issues:

  • Inadequate vendor management can lead to noncompliance with complex privacy laws and regulations.
  • Not limiting vendor access to confidential information can violate data protection policies.
  • The company can face fines and reputational damage.

Missed Performance Benchmarks

The impact of missed performance benchmarks due to a lack of vendor management includes:

  • Talent shortages: Delayed placements and inconsistent performance can lead to talent shortages.
  • Increased costs: Underperforming vendors contribute to increased procurement costs, unexpected expenses, and missed opportunities for cost savings.
  • Operational inefficiency: Missing benchmarks leads to disruptions in the staffing process, including delayed placements, inconsistent candidate quality, and difficulty meeting staffing needs.
  • Supplier disengagement: Persistent underperformance can contribute to vendor disengagement, reduced service quality, and responsiveness.
  • Reputational damage: Poor vendor performance can negatively impact a company’s reputation.

Vendor Overlap and Siloed Communication

Vendor overlap occurs when multiple vendors are hired to fulfill the same or similar roles or tasks, leading to duplicated efforts and potential conflicts. Siloed communication involves teams or departments working in isolation, limiting internal and external sharing of information and collaboration.

These factors contribute to inefficient coordination among suppliers and internal stakeholders.

The potential impact of vendor overlap includes:

  • Administrative overload: Managing multiple contracts, invoices, and compliance checks increases the administrative burden.
  • Inconsistent quality of candidates: Vendors could have different screening and vetting standards, creating inconsistent talent pools.
  • Lack of accountability: Multiple vendors increase the difficulty of pinpointing responsibility when issues arise.
  • Weaker vendor relationships: Spreading staffing needs across too many vendors can weaken partnerships and reduce focus on specific business needs.
  • Higher costs: Potential inefficiencies and errors can elevate operational costs.

Siloed communication can have the following effects:

  • Communication barriers: Misunderstandings, delays, and a lack of transparency are common.
  • Limited visibility: Gaining a comprehensive understanding of procurement activities, expenditures, and supplier relationships is challenging.
  • Inefficiency: A lack of coordination can lead to duplicated efforts and slower decision-making.
  • Compromised data security:  Sensitive data can be at risk without proper communication and coordination.
  • Lower employee morale: Employees might feel disconnected and frustrated due to a lack of information and clarity.

Why Partner with Anserteam for VMS and Vendor Oversight?

The following are reasons why companies partner with Anserteam for vendor management system (VMS) and vendor oversight:

Intelligence: By conducting research and fostering partnerships with forward-thinking technology organizations, we assist in selecting, integrating, and optimizing innovative technologies. Our vendor management solutions technologies are easy to implement and use, bringing total visibility and accountability into your labor management program.

  • Visibility: Our VMS technology offers quick implementation, easy use, and effective reporting. Our technology partnerships provide custom solutions to solve complex business challenges.
  • Reduced costs: Wage analysis, streamlined pricing models, and process optimizations lead to substantial savings.
  • Improved talent quality: Consistent vetting parameters and candidate talent pools ensure access to the best available talent.
  • Accurate tracking and forecasting: Real-time data analytics help quantify spend, increase ROI, and more accurately forecast labor needs.

Proven Results Across North America

Anserteam’s proven results across North America make us a top choice for staffing vendor optimization:

  • Over 15 years of refining our contingent workforce management program has produced efficient teams with effective results.
  • Since 2004, we have helped companies reduce costs, mitigate risk, and optimize contingent workforce management programs across all industries.
  • Whether a company needs recruiting services or total end-to-end program management, we customize each program to address unique business challenges.
  • Employers negotiate one contract, manage one vendor, and pay one invoice across the entire program.
  • Our company is WBENC Certified for TIER 1 and TIER 2 Diversity spend solutions.

Custom-Tailored VMS Configurations

Anserteam’s custom-tailored VMS configurations provide many benefits:

  • Seamless integration with existing systems: Our vendor management services help optimize a company’s current VMS system. Or, we can integrate a recommended VMS into internal timekeeping, accounting, or reporting systems to automate and streamline the process.
  • Customized workflows: Simple ordering process, time-keeping, automated approvals, key performance indicator (KPI) tracking, real-time spend analytics, custom reporting capabilities, and streamlined invoicing are included.
  • Increased visibility of spend: Procurement and Human Resources departments can quickly and easily view the entire contingent labor program on demand. Teams can analyze, optimize, and maximize the performance of the workforce.

VOP and MSP Services That Maximize VMS Value

Vendor on premise (VOP) and managed service provider (MSP) services maximize VMS value in these ways:

  • Dedicated onsite teams: Anserteam’s onsite program offers the highest level of integration for high-volume locations.
  • Results by the numbers: We have seen up to a 76% reduction in time-to-fill orders, a 48% reduction in turnover, a 38% reduction in absenteeism, and a 78% reduction in safety compliance issues.
  • Ideal for high volumes of contingent workers: Our onsite representatives can manage dozens or hundreds of temporary employees with standardized recruiting, onboarding, training, and offboarding programs.
  • Full integration with in-house teams: Our VOP program provides a dedicated onsite team that is accessible via a 24-hour hotline to handle any staffing and employee management responsibilities. As an extension of the Human Resources team, our staffing experts can offer strategic guidance, reporting analytics, and support for your safety and compliance initiatives.
  • Effective employee incentive programs: We can implement employee incentive programs to keep teams engaged. Our process creates a pipeline of flexible employees ready for quick hire during peak periods, boosting morale, production, and retention.

Let’s Solve Your Vendor Challenges Together

Contact Anserteam for a VMS demo or vendor audit consultation. Or, learn more about our VMS and MSP solutions.