How important is vendor management system in recruitment automation?

A vendor in recruitment industry is an organization or person that vends or sells contingent

labor. A vendor is usually an independent consultant, a consulting company or a staffing

company. Vendor management is the discipline of managing, administering and building

relationship with your vendors to optimize your business outcome. Vendor management is

usually a web based application that supports in managing business and procuring staffing

services. They take care of permanent staffing as well as temporary, contractual or contingent

labor. The vendor management has features of order distribution, consolidated billing and they

have a great potential as a reporting tool.

The vendor management process has following steps involved

Selecting vendor - This is the most crucial step of vendor management. While selecting vendor

an organization needs to thoroughly analyze the business requirement, risk involved and

vendor capabilities before short listing any vendor.

Analyzing and scrutinizing prospect - Before entering into any contract with the vendor you

need to do an in depth background analysis of the vendor whether it could provide you the

service you required? What is the level of professionalism your vendor adheres to? Does your

vendor have a record of sticking to deadlines?

A contract defining scope, roles and responsibility - The purpose of a contract is to define the

nature of relationship with your vendor. A good contract includes clearly all the roles,

responsibility and expectations of both sides. It also mentions the timelines and payment

schedule between contracting partners.

Monitor performance - For an effective vendor management you need to monitor whether your

vendor is delivering you according to mutual agreed timelines, quality and assistance. This

process ensures that you are getting the business outcomes you expected and it also helps you

to tweak your plans if things are not turning out as expected.

Establish proper communication - Communication is the key to a successful vendor

management. A well maintained relationship with your vendors will ensure that you are on the

same page at all times. There is no communication gap and clarity prevails over confusion.

Online recruitment software which facilitates vendor management relieves the pressure of

manually handling all the aspects of this process. Vendor management software helps to

efficiently manage temporary, consultative and permanent workforce. They improve

operational efficiency, cut cost and work as a state of the art reporting tool.

Let’s examine the role of vendor management software-

Contingent Management - This is done to make contingent hiring simplified process for

procurement as well as hiring managers. This includes managing variety of labor types like

independent contractors and indirect services. The responsibilities include identification and

management of contingent, full time, independent contractors and direct hire. Process control

is undertaken to control cost and lowering risk. With timely reporting and analytics tool you can

very well monitor the progress.

Compliance and risk control - With vendor management software you acquire compliance and

mitigation capabilities. You can audit vendor pre-engagement requirements such as

background checks, healthcare certificates, vendor insurance certificates, NDA’s, Tenure

management etc

Service procurement - You can manage your cost associated with vendors in terms of spending,

per vendor bill rate and hourly analysis. A rate card analysis could be done to monitor cost

efficiencies while working with a vendor. You can monitor the resources deployed and the cost

of the resource.

Intelligent analysis and benchmarking - Vendor management software gives you knowledge

and analysis tool which helps you optimize your business resources. Through this you can

analyze skill utilization of contingent workforce, vendor spend, budget to actual, labor hour

analysis etc. You can benchmark cost and quality with the level of monitoring capabilities you

achieve through vendor management software.

Vendor management software plays a key role in making your relationship with your vendors a

profitable affair. The power of optimization which lies in your hand is immense with the

intelligent analytics and reporting facility. Without vendor management software you lack a

streamlined and organized process where you can incur unreported expenses which can hurt

your company’s bottom line.