4 Ways Vendor Management Software Impacts Worker Classification


More and more industries are turning to powerful automation technologies to manage a seemingly ever-growing list of business processes. Workforce management is among the earliest adopters if these tools and has been making exceptional use of automation software for at least two decades now. Yes, the venerable VMS or vendor management system application was a boon to human resources departments everywhere when the first ones hit the scene back around 1990. With the proliferation of different types of workers leveraged by the modern workforce, the VMS continues to be a key tool in the arsenals of folks charged with ensuring proper worker classification. Here are some of the numerous ways the trusted VMS tech helps ensure proper worker classification.

1) A solid VMS solution helps users plan and execute strong benchmarking programs. With the excellent visibility the VMS provides, and the robust reporting capabilities built into leading solutions, the VMS helps vendors spend more time sourcing the best talent and less time chasing down requisitions.

2) Using VMS to codify compliance with classification rules and regulations is a sure fire way to capture cost savings. Eliminating the need for a dedicated FTE to monitor non-employees, VMS data allows incisive views into historical data that can be used to help streamline efficiencies and reduce cost. There’s also a very significant cost-avoidance component to using VMS in this fashion as well. If workers are not properly classified their engagements could be questioned by the IRS potentially leading to fines and penalties. .

3) VMS tools are fantastic for housing historical data. VMS allows visibility into everyone who is not an employee, housing the historical data that helps with devising and executing reporting and metrics around the client’s contingent workforce landscape. Having the ability to assess each individual worker and work with them – one on one – helps ensure contractors become compliant workers for the client. The VMS acts as a repository for all the relevant information and can even be configured to issue regularly scheduled alerts and reminders to managers to help ensure better compliance with internal business rules.

4) Easy and effective monitoring of worker tenure is also managed through the modern VMS solution. This functionality provides workers the ability to easily provide timely feedback to the client and fosters better communication with contract workers. These tools also provide the functional ability to track workers’ hours, time off between engagements and many other useful data related to workforce management. Plus the automation of predefined business rules again comes into relief as the VMS provides alerts throughout workers’ engagements ensuring the client stays ahead of any compliance issues that may arise throughout the ongoing engagement.

Altogether, from strategic planning, to tactical execution, the VMS tool continues to prove its great value to businesses and organizations of all sizes. If you’re interested in learning more about how this powerful technology may be of great use to your organization, talk to a nextSource VMS expert today.

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