This article contains excerpts from the recent provider insight report published by Talent Tech Labs, Next-Gen VMS: Orchestrating Total Talent Intelligence. The highlighted sections of this report unpacks what “Total Talent Intelligence” is and its strategic importance in today’s rising contingent workforce environment. While these excerpts are filled with actionable insights, they are just a primer for what the entire report reveals.
Talent is Everywhere, Yet It Can Be Overwhelming
Talent is everywhere, yet in today’s rapidly evolving landscape, it can be overwhelming to determine where and how to source the optimal workforce. Rising attrition rates and a changing macro-environment, among other work trends, highlight the challenges that exist in both sourcing and managing talent.
As a result of this and new capabilities brought on by better technology and computing power, the past few years have seen the rise of “Talent Intelligence” solutions. These technologies come in a variety of forms, but the common DNA is they leverage vast amounts of data and Al to help organizations make informed talent decisions at the micro and macro levels. These decisions may be how much to pay an individual or the required pay level to get them to leave their current position, understanding what skills are in demand in different markets, where skills supply is geographically dispersed, which individual candidates are likely to churn, or which applicants are a good (or poor) fit for a given job.
A much more recent trend is the application of these technologies to a sector of the workforce that is both very large and critically important but historically ignored by traditional HR and talent acquisition teams: the contingent workforce. Many organizations use a Vendor Management System (VMS) to source and manage this extended workforce in a single system of record, driving program optimization, cost savings and enhanced visibility. A leading-edge VMS should be easy to use, intuitive, enable full visibility/analytics on the external workforce, and be fully integrated with an organization’s ecosystem.
The paper ‘Next-Gen VMS: Orchestrating Total Talent Intelligence” explores the intersection of talent intelligence and the VMS and how these two critical pieces of an integrated workforce management platform work together. It unpacks what we are calling “total talent intelligence,” specifically how it is being surfaced and leveraged by leading VMS technologies, what its key components and use cases are, and a roadmap for building a business case and ensuring the journey to workforce optimization is successful.
Why “Total” Talent Intelligence?
In the US, a growing percentage of the workforce consists of temporary workers. This working population is even higher when accounting for other kinds of work arrangements, such as independent contractors, freelancers, or individuals working under a statement of work. For an an increasing number of large organizations with more than 10,000 employees, more than 40% of their workforce is contingent – or non-employed – and for some organizations, contingent workers make up half or more of their workforce. This sector is not just big but also growing, driven in part by macro factors but also driven and accelerated in large part by candidate preferences.
Given its size and strategic importance, this sector is critical for an organization’s success, and if nothing else, important to manage well due to its potential significant cost. Given the size and importance of contingent work in achieving business results and the importance of being able to source quality candidates regardless of preferred work arrangement, organizations should leverage the same strategic planning, insights, and oversight they would in managing their FTE population, ideally as part of a holistic talent strategy that spans the organization. Thus, we use the term “total talent intelligence” to refer to solutions that address contingent workers, their workflows, and processes in addition to incorporating FTE data, thus informing more strategic planning, managing and sourcing of the entire workforce.
Organizations need to take a multi-faceted approach to address these realities. Certainly, they need to do more to retain full-time workers, as well as optimize their talent acquisition strategies to improve quality of hire. However, the talent market is clearly signaling that the full-time employment relationship is not for everyone. And while companies of all sizes and in all industries have long relied on supplementing their full-time workforce with contingent workers, never before has there been such an acute need to incorporate alternative talent relationships and real-time talent intelligence as critical components of a comprehensive workforce strategy .
Traditional Vendor Management Systems (VMSs)
The majority of large organizations that leverage contingent labor manage this population of workers with a VMS, which is a tool used internally by procurement or managed via a Managed Service Provider (MSP) to find, engage, and manage a company’s external workforce, including contract, contingent labor, and services providers. Staffing vendors establish supplier contracts with the organization or MSP, and when a business unit needs labor ‘supply,’ their labor ‘demand’ is put into the VMS. There are myriad benefits for all parties, including:
• An Embedded Vetting Process
• Pre-screening of Candidates
• Standardized Pay Rates or Ranges
• Ease of Onboarding and Offboarding
• Streamlined Billing and Contract Management
The Need for a Next-Generation VMS
To help achieve these objectives with maximum efficiency and effectiveness, a leading-edge VMS solution should offer the following:
• Omnichannel Access: Multichannel, real-time access across Web, mobile, tablet and wearables via native applications that provide a seamless experience across channels
• Intuitive UI/UX: Personalized interfaces that provide great flexibility for individual expression
and customization, empowering users to directly align the functionality with their specific workflows
• Robust Security and Compliance: A comprehensive approach to both security and hosting operations, including internal and external audits, that provides end-to-end visibility and integrity
• Flexible Integrations: Open architecture that enables seamless integrations with any commercial or proprietary systems important to an organization
• Easy Implementation: A structured implementation methodology that drives the design of an efficient and globally compliant program, considering both technology and operational processes
In a tight and evolving labor market, forward-thinking organizations also require “talent intelligence” to stay ahead of their competitors. They need to identify talent wherever it exists, not simply the best that their staffing vendors might have available in their talent pools. They want real-time job market insights to identify and directly source talent and to pay equitably for a given role and location. They need predictive analytics to guide more informed decision-making, automated workflows to decrease the time it takes to fill open roles, and interactive dashboards with insights tailored to their unique business requirements. This means tapping advanced business intelligence that provides detailed, real-time analytics. And it’s this type of actionable intelligence that’s at the heart of the next-generation of VMS.
Next-Gen VMS: Incorporating Talent Intelligence
Organizations that are thinking deeply about the alignment of their talent strategy to their business strategy are looking to better leverage comprehensive talent intelligence at critical points in workforce sourcing and management. VMSs have been evolving to meet some of these requirements, but they are not generally keeping pace with companies’ growing need for expanded access to quality, diverse talent in today’s highly competitive market.
Looking forward, organizations will need the same levels of market insight and talent intelligence on their potential and extended workforce as they have (or aspire to have) on their current, primary workforce. Creating a 360-degree view of this total talent ecosystem is critical, which necessitates the aggregation of talent-related data from as many sources as possible. It also requires data and insight from all phases of the talent lifecycle, as well as tight collaboration across procurement, talent acquisition, and talent management. In the case of the VMS, it also demands tight integration and carefully considered UX development so this data is surfaced to users when and where it’s most helpful for decision-making.The next generation #VMS system creates a 360-degree view of an organization's total talent ecosystem, which necessitates the aggregation of talent-related data from as many sources as possible. Click To Tweet
Doing so can bring significant benefits to an organization, including:
• Enhanced Talent: Understanding patterns, improving forecasting, and identifying and sourcing top talent at scale
• Increased Cost Savings: Balancing competitive pay and cost optimization
• Improved Efficiency: Understanding process bottlenecks and reducing time to fill
• Greater Visibility: Maintaining a real-time view of the entire workforce
• Increased Diversity: Benchmarking DE&I and driving meaningful change
Historically, bringing next-gen talent intelligence capabilities to the realm of the contingent workforce required investing in a number of specialized point solutions that increased operating overheads while decreasing efficiency – one set of tools for real-time contingent market labor and pay data, another for Al-based modeling, planning, and predictive analytics, a different tool for pay equity analysis, yet another for direct sourcing, and still yet another for anything beyond basic supplier score carding or candidate matching. That said, we are starting to see early examples of technology vendors bringing these capabilities together under the same umbrella, offering VMS, direct sourcing, services procurement, risk management and compliance, DE&I, and true talent intelligence capabilities for the contingent workforce in one integrated platform.
Thank you to Magnit for assistance with client case study information.
Download the full provider insight report to uncover the essential components of Total Talent Intelligence, real-world use cases and the keys to success. Gain a full view of this subject by claiming your copy of this report here.