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When the Kohler Company began using more contingent workers following the Great Recession, HR leaders there sought a certain type of vendor management system (VMS) to help manage the shift in workforce strategy. Two top requirements in a VMS were advanced reporting capabilities and an ability to address contractor-related security issues, said David Pittner, a senior HR analyst and head of external labor management with Wisconsin-based Kohler, which makes kitchen and bath products.
In the past, contingent staffing providers used by Kohler might submit reports on the use of their people at irregular times. “We couldn’t consistently and reliably analyze that data at one time across the company,” Pittner said, “and we could do little of the custom reporting we needed on the use and costs of contingent staff.”
Having an accurate count of contractors working in Kohler facilities also was a concern. When a company plant was hit by Hurricane Katrina in 2005, security staff there received a request from the Federal Emergency Management Agency to account for all workers who had been in the facility.
“At that point we could only tell them who our full-time employees were, not who the contractors were,” Pittner said, noting that the local office of the contingent labor provider also was closed at the time.
To address these evolving vendor management needs, Pittner and his team turned to a cloud-based VMS from vendor Fieldglass.
Companies have long used vendor management systems to automate and manage the complexities of their contingent workforce programs, from hiring to onboarding to processing invoices. But as the definition of “contingent” expands to more project-based work, and more organizations employ nonpermanent workers overseas, the capabilities required from a VMS have changed.
Today’s organizations increasingly need VMS software to manage both contingent workers hired as individuals and external companies doing project-related work, said Andrew Bartels, a research analyst with Forrester Research who follows the VMS market. Many also have a greater need to stay compliant with international labor and tax laws surrounding global use of contingent staff.
HR and procurement leaders should use some key criteria if deciding to switch VMS providers or invest in a new system, Bartels said:
In a May 2014 research report, Claire Schooley, a talent management analyst with Forrester, referenced gaps that exist in today’s HR technology between managing permanent and contingent workforces. In particular, Schooley said most applicant tracking systems lack the capabilities to address the contingent workforce, and some HR organizations feel that contingent workers fall outside their core competencies. “Although great strides have been made, more work needs to be done to allow one technology solution to meet as many of the workforce needs as possible,” Schooley wrote in the report.
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