Today, as much as 30-50% of an organization’s workforce is considered external. Manufacturing companies use contingent labor and services to quickly meet demand, technology companies to find workers for positions with unique skill sets, and oil and gas companies to combat labor shortages. Behind the scenes, they need total visibility in order to optimize all areas of services procurement including complex spend, workforce quality, regulatory compliance and labor program efficiencies. Fieldglass' Vendor Management System (VMS) can help companies achieve this and more, all while easily integrating with other internal systems to enable a holistic view of both talent and spend.
7. 7
Culture of Innovation with Clients
Decision Wizard Outsourced/Offshore
Complex Rate Schedules
Supplier Pre-Qualification
Secure ID
Walk Up and Use InterfaceContestability
Monthly Rate Cards & Timesheets
15. 15
- Faster Access to Talent
- Role Classification = Rate
Alignment vs. Market
- Cost Containment; Rates,
Overtime, Taxes etc.
- Reduced Administrative Burden
- Increased Financial Visibility &
Control (approvals, etc.)
- Reduced Health and Safety
Incidents
- Mobility
− Regulatory Compliance
− Right Sized Supply Base
− Supplier Performance
Improvement
− Evaluation and Adoption of
Innovative Ideas / Best Practice
− Optimal Skill Mix (Direct vs.
Contract Labour)
− Financial Control
− Competitive Bidding
Deliverables that provide ROI
The Total workforce should be looked at in two dimensions: The first segment are those direct workers that companies use a dedicated payroll system or an HRIS to track and manage them. For the most part, many organizations already have that problem solved.
The second segment are external workers. Managing them is the challenge. From a workforce perspective, commonly the external workers represents between 30 and 50 percent of the total direct workforce. And from a finance and procurement perspective, the external workforce can represent between one and five percent of revenue.
Let’s dig into the various types of contingent workers. We have contract workers/Agency Temp workers, outsourced workers, Statement of Work, or SOW engagements, and Independent Contractors. From a hiring manager’s perspective there are a lot of steps involved in engaging an external worker or service: requesting a resource, to onboarding a worker, to tracking them, to reporting on them.
Fieldglass’ market-leading cloud Vendor Management System (VMS) automates the complete contingent and SOW labor lifecycle -- from initial discovery and qualification through performance management and complex invoicing and payment.
Fieldglass is a recognized leader for managing all categories of non-payroll labor spend:
Contingent labor in numerous categories
Statement of Work (SOW) projects and services
Independent contractors
Specialized talent pools, such as retirees and alumni
[NOTE – this slide builds to help tell the story/show the problem]
Although the problem is simple, it can be complicated by manual processes, decentralized management, etc. etc. etc.
Let’s take a step back and talk about how organizations might currently manage their external workers. There are a lot of administrative aspects to managing the constant flow of workers and service providers coming in and out of your organization.
Once you decide to centralize the management of your external labor you’ll want to put in place what is typically called the Program Office, or PMO. Some companies manage their contingent workforces internally, also known as “self-managed programs,” while others leverage a third party to manage these workers. This third-party is called the “Managed Services Provider,” also known as the MSP.
Using manual processes, hiring managers typically work with the PMO to request a worker. Based on the requirements for the position, the PMO will then work with staffing agencies, or suppliers, to find recruit the right candidate or worker.
As you can see, at any given moment, hiring managers, the PMO, suppliers and workers could be in contact with one another using manual, disjointed and untracked processes. Imagine the amount of back to back emails and phone calls.
With a Vendor Management System like Fieldglass in place, you can take a more organized and systematic approach to managing your contingent workforce.
Highlight the benefits of the App
The VMS Standardizes processes –
All hiring managers follow the same process and use the same job descriptions.
The VMS enforces approval processes to ensure proper visibility and accountability
The VMS distributes the req based on predefined rules – Tiering to take advantage of preferred vendors and volume discounts. What’s important is there is a bidding process, there is competition to ensure the best market rate. There is an even playing field.
The suppliers submit candidates and the PMO can vet them to ensure a number of things:
Rates are consistent with Rate cards
The candidates are compliant with any regulatory requirements. This is important in the Healthcare industry with nurses to ensure they have the right certifications. Or in the mining industry which is heavily regulated around Health and Safety.
When the worker is hired, the VMS facilitates the onboarding process – Needs to get Badges, laptops, seating, etc. Likewise when the assignment is complete, the VMS facilitates the offboarding process.
Time collection and invoicing
All the while, the application is collecting data – rate data, process times, worker data. All of this is raw material for program reporting an analytics.
You see, a VMS-Fieldglass delivers a tremendous amount of value.
The most immediate is cost savings. Through competition, rate cards, and higher visibility, a company is able to significantly reduce hard costs savings. Our customers typically see a 15-20% decrease in cost in the first year alone.
Soft costs can also be driven down through efficiency gains - With Fieldglass a company can standard processes which improves workflow and shortens cycle times – not only time to fill positions, but also invoice cycle time. Many customers are able to take advantage of quick pay discounts.
Fieldglass ensures compliance to regulatory requirements by requiring the staffing company to upload proof of certifications, or credentials. Another recent example of this is Rio Tinto, a mining company in Australia. The Fieldglass application has been integrated into Rio Tinto’s Enterprise Resource Planning (ERP) system. This close integration ensures a successful deployment of its global framework and helps the company to maintain Health, Safety, and Environment compliance training during onboarding.
Visibility – A VMS provides visibility into all aspects of the workforce, How much is being paid, how are suppliers performing. Increased visibility allows for analysis to identify further optimization and cost savings.