To gain approval for this valuable tool, tailor your arguments to reach each executive. 

It doesn’t take much to convince contingent workforce program managers about the benefits of a vendor management system over a clunky spreadsheet-based system. They already know a VMS can cut spending by 25% and slash turnaround time by 75%, among its many other benefits.

Their C-suite, however, is another matter. Executives may balk at changing their organization’s external workforce processes or hesitate to add the expense line item to their budgets.

The key to getting C-suite approval? A business case that is tailored to the concerns of each member of the executive team. Here’s what you — and they — need to know.

Message to the CFO: Controlling Cost

The decision to invest in a VMS is, at its core, about cost. No one is more focused on budgets than the chief financial officer. A VMS can save the organization money in a number of ways:

Accurate, up-to-date data. Program managers often struggle to answer when the CFO asks how much they’re spending on contract labor.

“They’re probably never confident in the data because it’s on several spreadsheets,” says John Adkins, head of Workday VNDLY Product – Enablement.

A VMS, on the other hand, can streamline workforce expenses by providing the data needed to assess supplier performance and cost allocation. One Workday VNDLY customer reported they saved millions of dollars in administrative fees by self-managing their own program using the software.

Economies of scale. If every department is finding contingent labor on its own, they’re likely losing out on possible volume discounts — a problem a VMS can help solve. In addition, rate cards in the VMS make it easier to limit the markup an organization pays.

That visibility allows you to push on your vendors to drive down rates, Adkins says. When paired with a competitive bid process, rates can come down even more.

Customers using a VMS saw time spent on duplicate data entry drop fivefold, according to the Workday whitepaper. And they saved as much as $300,000 in initial program setup costs.

Competitive bids. When individual managers work with vendors they are friendly with — rather than those who provide the best deal — the organization loses. A VMS can automate a competitive bidding process, giving the top vendors two weeks to bid on any new contract.

A competitive bid process can also help drive down rates — something that’s “hard to do when you’re using spreadsheets,” Adkins says.

Attractive funding model. Most VMS providers use a vendor-funded model in which the vendors supplying the contingent workers pay for the VMS based on how much work they send through the system.

“How do I justify to my leadership team that they need to spend money on new software that they haven’t used before? The vendor-funded model is usually an easy way to get in,” Adkins says.

Labor savings. A VMS can automate and standardize labor-intensive processes, freeing time and resources for more strategic work. And when the VMS integrates seamlessly with other systems, that can save money on the internal IT work needed to set it up.

In addition, a VMS can help ensure that contingent workers are productive from their first day by making sure their paperwork is processed.

Message to the CIO: Managing Compliance

Using both regular employees and contingent workers provides many benefits — but it also complicates compliance efforts. A VMS can help mitigate the risks associated with workforce management:

Automated compliance. Workers need background checks and NDAs. Healthcare workers need their certifications checked. Recordkeeping requirements for issues like overtime pay vary by country or even by state. Staying on top of all this paperwork can be daunting — and a VMS can help automate the process.

(To read more on compliance, see Why you need a VMS.)

Better data security. When regular employees resign, their access to company data is generally terminated on their last day. But this doesn’t always happen with contingent workers.

“Think about all the training that we all go through on keeping data safe,” Adkins says. “If half your workforce is contingent, are you tracking them in the same way?”

The answer, unfortunately, is usually no. A VMS can help mitigate the risk, along with other security measures. A manufacturing company, for example, directly integrated its badging system with Workday VNDLY, adding another layer of control.

A Message to the CHRO: The Focus on Talent

The head of HR needs to ensure that the organization has the best, most productive talent possible. A VMS can help in several ways:

Access to niche skill sets. Engaging contingent workers is a good way for an organization to fill gaps in its talent.

“We see a lot of our HR buyers [asking], ‘How do I augment the skills of my organization to help me with the need now while I build my internal bench?’” Adkins says. A VMS is key to getting the best contingent workers for the most reasonable price — and then managing them well. The manufacturing company, for example, was able to onboard 200 workers per week using their Workday VNDLYC platform.

Increased productivity. A VMS helps keep paperwork on track, reminding both workers and managers to get onboarding paperwork completed on time or contract extensions properly executed.

“If I forget to extend a worker because the notification is sitting in an email or somebody’s out of the office, now your worker is suddenly unproductive because they had all their access revoked,” Adkins says.

Total workforce visibility. Accurate data is important to everyone in the C-suite, but total workforce visibility is particularly important for HR leaders who embrace total talent management.

For example, when they pull a report on headcount, an employee search only shows a portion of your organization’s actual workforce. When they pull a similar report on contractors, again, it only surfaces a segment of the talent pool. This is a major disadvantage for HR managers who need to know everyone who works for them at a glance.

Improved worker experience. When a worker can’t start because of delayed onboarding paperwork, it’s not just inconvenient for the organization — it’s also a bad experience for the worker. That person is less likely to convert to a full-time position or to recommend the organization to others.

“Your contractors are your brand ambassadors as well,” Adkins says. “You want them to have a good experience, just like you do for your employees.”

Program managers know a VMS can bring order to a chaotic system, saving time while also reducing costs and risks. The key is getting the organization’s C-suite to understand its value. When you can express the system’s benefits in terms that address each executive’s priorities, you go a long way toward bringing uniformity and stability to your program.

To continue learning about the value a VMS can bring to your business, see Understanding the Value of a VMS: Assess Your Organization’s Technology Maturity.