Contingent Workforce: What are the Benefits of Supplier Consolidation

When it comes to managing your contingent workforce program, staffing agencies are a fantastic resource for hiring temporary and contract workers and helping you to achieve your company’s workforce objectives.

Staffing agencies help your organization access hot skills, reduce workforce costs, improve the quality of your talent acquisition efforts and allow your business to scale its workforce rapidly for new projects or high demand.

Yet you can only truly access these benefits when you are managing your staffing agencies correctly, and this is more difficult than most organizations realize.

Managing staffing agencies is incredibly time consuming. Your business has to source vendors, negotiate agreements, onboard staffing agencies, implement controls and compliance, manage time entry and approval, deal with invoicing and payment, and mitigate risks within the program. 

The vast majority of organizations simply do not have the time, resources or budget to do this successfully. 

That’s why many businesses turn to the cost and time-saving strategy of engaging a supplier consolidation provider. In this blog we explore what supplier consolidation is and how it will benefit your contingent workforce program. 

What is supplier consolidation in your contingent workforce program?

Supplier consolidation in a contingent workforce program is a process in which a company outsources the tactical management of staffing agencies to one single vendor. This allows the business to keep their team’s focus on their core competencies.

The outsourced partner, takes on the complex paperwork and process responsibilities associated with managing staffing agencies - meaning the business has just one point of contact for all of their vendors. 

Typical tasks performed in a subvendor services agreement include:

• Onboarding new suppliers
• Negotiating and agreeing contracts
• Ensuring vendor compliance
• Facilitating the onboarding of contingent workers
• Overseeing time entry and approval
• Consolidation of approved time into one invoice
• Client invoicing
• Distributing funds to staffing agencies
• Reporting and analytics on program performance

What are the benefits of vendor consolidation?

By outsourcing responsibilities and processes to a contingent workforce expert, your organization will save money by using fewer resources to complete these time-consuming tasks. Instead, you’ll be able to shift this work over to your supplier, who will be able to achieve the same output and high-quality results at a lower cost.

Choose an outsourced supplier consolidation partner with deep knowledge, expertise and experience in the contingent workforce. This will ensure that you are able to outsource work effort to a more efficiency partner with repeatable and productive processes. 

Managing the staffing agencies in your contingent workforce program takes up both money and time. Typically, the more vendors you have and the more contingent workers you hire, the more work will be required to manage your staffing agencies. Managing these processes is time-consuming, often delivering no real value to your organization.

Vendor consolidation can significantly reduce internal administration processes so that your team can focus on core competencies that drive true value to your business. You’ll be able to outsource mundane and time-consuming tasks like account payables, onboarding and so many other tasks that waste company time. 

Risk significantly increases when you have a large number of suppliers within your contingent workforce. Not only is it difficult to keep track of these suppliers, but there are more places in your supply chain where things are vulnerable to going wrong. 

An outsourced supplier consolidation partner has experience in managing, overseeing and analyzing the engagement and contractual parameters of a large number of vendors. They’ll ensure all processes are implemented correctly and all vendors are complying with their contract agreements.

Another important benefit of supplier consolidation is that you can improve your company’s visibility into its supply chain. A supplier consolidation provider will be able to provide your business with reporting and analytics that gives you complete viability into the performance of your staffing agencies. The result? You can use these insights to reduce costs, identify areas of spend, report and analyze and improve workforce quality within your contingent workforce program.

Interested in learning more about working with a supplier consolidation partner and accessing the benefits of a successful vendor consolidation strategy? Get in touch with Contrax today. Our team of contingent workforce management specialists would love to help.