Compliance: How Visibility Impacts ROI
The well-known business axiom dictates: one cannot improve what one cannot measure. Whether consciously or not, this notion is almost always at the root of an organization’s drive to implement business software tools. As providers of VMS tools and the expertise to support their use, nextSource is typically called upon by organizations whose leadership intuits that there are efficiencies to be captured and savings to be wrung from their services supply chain. However, they’re frequently unable to articulate why they feel this way or the extent to which they may be leaving money on the table without such solutions. The tonic for this unsettling condition is not technology per se; rather, it is the visibility enabled by applying technology to previously unmeasured operations. So, when considering the ROI of a VMS or other automation solution, one must consider these three critical ways in which visibility impacts ROI.
First and most intuitively, visibility improves the quality of candidate sourcing, which in turn leads to a more cost-effective, efficient contingent workforce and ultimately, an improved bottom line. Being able to monitor which suppliers consistently provide the best quality talent enables HR management to direct more spend to those top-performers. Consequently, a contingent workforce program will experience reduced levels of churn/turnover and will spend significantly less time on training and on/off-boarding. Plus, having top talent on your contingent rolls means that your overall work output is improved, which also drives return on investment.
Secondly, visibility is crucial in ensuring uniform application of business rules and regulatory requirements for your workforce management program. Being able to track the accuracy and compliance rates of every supplier and measure them against KPIs established at the outset of any new supplier relationship is critical. Those that exhibit a pattern of failure to maintain the appropriate insurance coverage, for example, should be removed from a program’s embedded base. However, without visibility, making a regular periodic check of every supplier in the base would be a time consuming and tedious process. VMS tools make it much easier to identify these patterns early and to act accordingly. The return on investment driven by visibility in this area is of the cost-avoidance variety. Without close controls over regulatory compliance, an organization will likely eventually be hit with fines and penalties stemming from such issues as mis-classification, co-employment, and others. These costs can be significant and erode several years’ worth of savings.
Thirdly, as this interesting interview with “fraud blogger”, Tracy Kitten notes, the risk inherent in improperly managed security processes can translate into costly losses in terms of physical – or worse, intellectual – property. Maintaining visibility into compliance with regularly scheduled audits and replicable audit trails generated by a VMS solution helps an organization protect itself from security risk; this too adds to the return on investment into workforce management solutions.
In reality, there are countless ways that visibility improves the results of a contingent workforce management program. In what ways have your efforts yielded ROI in this regard? Share in the comments!