Businesses worldwide are benefiting from the growing use of non-employee workers. Employers are gaining access to more talent, reducing costs, and becoming more agile.
This pattern has created new management, reporting, and strategic planning challenges despite the benefits. Many organizations are adopting solutions such as Vendor Management Systems (VMS). These systems help organizations engage, manage, report on their external workforce, and deliver other capabilities.
In this article, we will illustrate how their reporting capabilities give you the insights you need to optimize your workforce and ensure your compliance, tax, and accounting comply with legal and quality requirements.
What is the composition of your non-employee workforce?
Your workforce needs to align with your strategic goals. Otherwise, its composition could hinder progress toward your bigger ambitions. To achieve effective alignment, you need to understand the composition of your non-employee workforce, the kinds of work they do, and their impact.
Using a VMS, you can track and manage all categories of non-employees, including temporary workers, consultants, and contractors. With this information, you can focus on deriving the most value from your contingent staff and associated contracts. With advanced analytics capabilities, you will also be able to understand:
- Which suppliers can offer you qualified, high-caliber candidates the fastest?
- Which non-employee worker categories provide the highest quality work?
- Whether time-and-materials contractors outperform fixed-price, statement of work (SOW) contractors.
- Are you overly reliant on a particular supplier, and what risk does that pose to your organization?
Who has access to your assets at any one time?
At a micro-level, a VMS helps you understand who has access to your organizational assets. You can review worker locations, projects, and access privileges to data, systems, and facilities on an individual or category basis.
This is instrumental for organizations with compliance, information security, and quality management concerns.
How can we be sure this access is discontinued when their assignments are completed?
Some categories of non-employees are commonly overlooked for compliance purposes. For example, service workers and retainer-based consultants must be accounted for, with an entire audit trail to demonstrate compliance.
It would be best if you had a VMS to easily track members of the non-employee workforce. This would enable you to identify them, provide visibility on their responsibilities, and track their contracts. When access is planned to be discontinued, you can execute a workflow that informs the relevant stakeholders to update their access rights.
Are non-employees correctly classified for tax purposes?
Worker misclassification has long been an issue in the contingent workforce. Recently, its importance has grown significantly, with Governments, Human Resources departments, and the movement towards total workforce management all pushing this further up the agenda.
In law, regulations such as IR35 in the United Kingdom and DBA in the Netherlands firmly require organizations to manage the tax status of their non-employee workforce. The rules differ somewhat for each territory, adding to the complexity of managing an international workforce—and this is where a VMS will provide visibility, clarity, and compliance verification.
To achieve this, a VMS helps create practical, robust, and auditable processes for managing the tax status of your global contingent workforce.
Are we paying too much for specific skill sets?
Contingent workforces allow you to respond flexibly to demand and project requirements. However, without the correct information, you can end up overpaying for talent and increasing your costs.
A VMS helps you understand the complexity and variety of supplier contractual relationships. It enables you to procure and negotiate with suppliers and even reduce administrative overhead by automating work. It also offers:
- Tools that allow you to source suppliers and talent competitively can help you maintain or improve your service quality.
- Benchmark and use historical data to manage your costs closely.
- Draft statements of work (SOW) on your terms, reducing your risk as a buyer
Learn more: Six things a VMS empowers corporate businesses to do quickly and efficiently.
Are we deploying our contingent workforce strategically?
The best organizations can report on historical performance and look into the future to ascertain their workforce requirements.
A VMS can harness big data, which can be used to analyze your current and future human capital requirements. Based on this information, you can begin to understand the optimum mix of employee and non-employee labor to execute your strategic plan by:
- Segmenting your workforce
- Gauging internal and external labor markets
- Benchmarking historical performance against future requirements
- Forecasting your non-employee labor requirements
Look no further than Beeline
Beeline solutions go far beyond a VMS and uniquely leverage your internal data to produce insightful, actionable reports that help you identify bottlenecks, plan for the future, and give you unprecedented visibility into your non-employee workforce.
The Beeline platform offers you the data you need to adopt a data-driven approach to your business strategy. For more information about how Beeline can help you answer each of the questions above, contact our specialists or book a customized demo.
