Recently, the Staffing Industry Analysts (SIA) put out a report on how much Vendor Management is saving companies that have adopted VMS as a management solution for contingent labor. According to the SIA “The results were based on findings from the 2009
Contingent Buyer Survey, conducted in September 2009, and reflect the
opinions of buyer respondents from 171 large (1000+ employee) companies.” Again, the report is only available to paying members of the SIA but I’ve listed some interesting findings from the report below.
What was most interesting to me about the report was how much the overall savings on
contingent labor costs was underestimated by buyers
that do not use VMS systems as an agency management solution.
According to the SIA report:
- Contingent workforce buyers who have not implemented VMS greatly
underestimate the savings achieved by its adoption. Among such non-VMS
users, the median projected savings from implementation was 5%–half the
savings reported by those who had actually implemented VMS.
- Roughly a
third of non-VMS users had “no idea” how much VMS would save; an
additional 11% thought it would save neither time nor money, and 13%
more thought it would save time but not money.
median estimated savings of contingent buyers working with a VMS model was 10%.
- Buyers reported that in the first year of implementation VMS saved a
median of 10% of contingent workforce spend. However, buyer
perception of savings varied widely, from 0% to over 25% savings.
- Almost all buyers—85% of them—thought
VMS saved at least some significant percentage of spend (2% or more).
About a quarter of buyers thought VMS saved 16% or more. Of the VMS
users who did not think it saved money, almost all thought it saved
It’s clear that the adoption of a vendor management model saves buyers of contingent labor both time and money. Depending on how it is implemented and the model chosen, the amount saved can vary.