A more temporary solution Featured

8:00pm EDT August 26, 2008

If you use a lot of temporary help in your business, you probably are juggling two or more staffing agencies to fill a variety of positions: from administrative help to information technology personnel to those in managerial functions. You may have wondered if there were a better way available by using technology to manage this work force, streamline costs and optimize your time.

“Businesses are talking about VMS (vendor management system) and how this new technology is making life easier for those in charge of managing temporary staff,” says Michael Reyes, Director of Enterprise Accounts for Talent Tree of Houston.

Smart Business spoke with Reyes about VMS, what it does and how to select the VMS vendor that is right for your business.

What are the benefits of implementing a vendor management system?

The biggest benefit is having one point of contact, one organization to manage all temporary staffing needs. It’s ‘one-stop shopping.’ The technology allows you to manage time entry flow, invoices and requisition all online. It eliminates dealing with multiple vendors with multiple rates, and it broadens the pool of temporary workers. It eliminates the risk of being price gouged.

What if a business likes the staffing vendors it works with? Does it have to change over to one vendor with a VMS?

No. Often many temporary staffing firms participate in these systems so you have a wide pool of vendors that temporary personnel will come from. The difference is that you only pay the vendor that is managing the particular VMS program, which maximizes efficiency. Some VMS vendors are the staffing companies themselves who own the technology; some VMS vendors are technology companies.

What does the ideal VMS do?

The system should have the ability to generate real-time reporting, consolidate invoicing and set up any type of electronic fund payments. Most important, it is necessary to have someone within the organization understand the VMS and know how to use it. The VMS also needs to have a solid roster of temporary staffing agencies across the nation who want to sign up to the program. It must have a national — as well as regional — footprint.

The VMS must also be able to accommodate requests from all job niches: from janitorial help to administrative staff, from IT personnel up to CFOs. That is truly the luxury of a system like this — to sit down at the computer and create a job description and simply click a button to fill a request. These requests can be for short assignments to cover vacationing or sick employees, or long-term assignments for special projects.

How can a business best evaluate VMS providers, and what does it cost to get started?

VMS programs should have good relationships with third-party vendors; they should also be able to provide references and case studies. A VMS program should also have a national presence and the provider should understand the staffing industry and not just be a technology provider. The software should be able to manipulate information in the system and allow customization of job requests.

Cost to implement a VMS ranges from $50,000 to $100,000 for the software and training cost. The specific cost depends on how much customization is required. After that, there is a yearly maintenance fee to cover IT expenditures, depending on volume. That fee is about $12,000 a year.

Is VMS for every business?

It is only for large organizations that work with multiple staffing vendors and want to streamline the process. It is not a tool for small organizations since this is for high temporary help volume — $10 million-plus spent in temporary help. It is also a tool for temporary help only — those with direct-hire needs don’t need this kind of ongoing technology tool to manage these employees. Large businesses with multiple offices across the country are ideal candidates for VMS.

MICHAEL REYES is the Director of Enterprise Accounts for Talent Tree, www.talenttree.com, a staffing company based in Houston. Reach him at (972) 361-0123 or Michael.reyes@talenttree.com.