What are the Benefits of Contingent Workforce Vendor Consolidation?
3 min read
When it comes to managing a contingent workforce program, many organizations are introducing unnecessary risk and spend by using a multitude of staffing agencies and suppliers that they simply do not have the resources to manage effectively.
When a company has dozens of staffing suppliers and many more contingent resources, their team spends an unmanageable amount of time on the complex processes and paperwork associated with onboarding, offboarding and paying staffing agencies.
What if you could consolidate all of those processes into one point of contact? In this blog, we take a look at what supplier consolidation is, how it can benefit your organization, and some key steps in building a successful vendor consolidation strategy.
What is vendor consolidation
In general terms, vendor consolidation is a supply chain management strategy where companies reduce their supplier base to a few trusted partners in an effort to streamline the procurement process, improve the quality of business operations and to cut costs.
When it comes to the contingent workforce, supplier consolidation is the tactical approach of outsourcing the time consuming paperwork and processes associated with managing your contingent workforce suppliers to a third-party expert with repeatable and consistent processes without having to implement a complicated, time consuming and expensive full MSP program.
Rather than a multitude of contacts and invoices, your organization will instead have just one point of contact and one invoice allowing you to focus on your key objectives or strategic vendors.
What are the benefits of vendor consolidation?
According to the Staffing Industry Analysts 2020 Workforce Solutions Buyer Survey, 68 percent of large companies cited “consolidation of staffing suppliers” as a workforce management strategy currently in place in their organization.
In addition, 29 percent said it is a strategy likely to be “seriously explored” within two years.
✔️ Save time for your internal team
When a business implements supplier consolidation into their contingent workforce program, they will only have to deal with one invoice and one point of contact. As a result, their internal team is able to save significant time and money by outsourcing the bulk of the work to a third party expert.
By consolidating all of your suppliers into one point of contact and passing all of the supplier admin tasks to an expert who can manage them on your behalf, your company’s internal team is able to spend the saved time on strategic initiatives that help your business grow.
✔️ The implementation of repeatable processes
When implementing supplier consolidation, you’ll want to find a third-party who has experience scooping up suppliers into repeatable and consistent processes that take that pain away from your internal team.
Taking these tactical and time-consuming tasks away from your internal team, and working with an expert with repeatable processes, ensures that your organization is able to maintain healthy supplier relationships and access cost savings through improved management.
✔️ Contingent expertise that ensures supplier compliance
Contingent workforce management isn’t easy. It requires contingent category expertise that the vast majority of organizations just don’t possess within their HR and procurements teams. Working with a supplier consolidation expert helps fill that gap.
A supplier consolidation provider will ensure that your contingent workforce suppliers are compliant with their initial contracts, officially registered as a business, that government tax numbers are active and in good standing, to ensure business insurance coverage, as well as any other compliance requirements that must be met.
✔️ Visibility and reporting
As part of a supplier consolidation program a provision of VMS will help streamline the end-to-end process, but also provide important visibility into your spend. This helps you to understand the dynamics or your spend, by division, department, region, supplier and much more. Thus allowing you to identify opportunities for improvement and access to rapid analytics that you do not have today.
How Contrax can help
If you’re tired of managing all of your contingent workforce suppliers, then it’s time to find a provider who can do this on your behalf. Contrax will manage the tactical administration of contingent workforce suppliers on your behalf. Including tasks such as:
Onboarding new supplier
Ensuring vendor compliance
Overseeing time entry and approval
Supplier reporting and analytics
Negotiating and agree contracts
Onboarding contingent resources
Consolidating approved time into one invoice
Distributing funds to suppliers
We scoop up all of the complex processes and paperwork for each supplier, giving you just one point of contact and one invoice for all of the suppliers within your contingent workforce management program. This saves you huge amounts of time and money, allowing you to focus on growing your business.