Human Capital Management using Workforce Management Solutions

Human Capital Management using Workforce Management Solutions

Why an integrated e-HR solution for hiring full-time staff and also managing and analysing your permanent and temporary workforce is necessary for achieving cost effective HCM

By: Allan Schweyer

Human Capital Management (HCM) plays an increasingly critical role in achieving business's corporate objectives through the use of various new applications and processes. These new systems are designed to improve how they measure, manage and optimise employee recruitment and staffing agency's performance. HCM applications are also key to aligning work, people and performance but this market is somewhat fragmented and managers are increasingly looking outside of HR to look for better or more integrated solutions to manage and align work, people and performance in achieving the corporate link between enterprise level business strategy and individual performance.

Why a Vendor Management Solution (VMS)?
According to an article published in The AMR Research Report on Human Capital Management, December 2002, Workforce acquisition strategies and applications including recruiting and contingent workforce procurement applications are a critical piece of the HCM footprint. The article went on to say, Workforce acquisition combines recruiting and contingent workforce procurement into a comprehensive strategy, based on current and projected demands.î

There are about 4.5 million contingent or contract workers in the UK, representing a 2.5 billion industry. Employers' use of contingent staff reflects workers' willingness to be free agents. As we all know, the contingent workforce is usually the first to increase when an economy is coming out of recession and larger staffing agencies have developed an interest in VMS over the past couple of years. As increasing numbers of organisations look to contingent labour as an area to increase efficiencies and lower costs, progressive suppliers have been quick to offer their customers managed VMS solutions. Kelly Services, Inc. for example, manages centralised contractor acquisition programs and centralised vendor management solutions for its clients.

Sue Marks a vice president of Kelly HR Solutions Group, says: ìAll of our new programs are powered by web-based technology and our existing clients are migrating to them. We find that once clients get used to the changes in process, they order online instead of over the phone, they are very happy with the reduction in administrative activities, the real time reporting, the 24 x 7 access and the increased speed. Contract labour is usually an organisation's largest indirect spend; yet it remains one of the most loosely managed. A strong program, coupled with the new Vendor Management Solutions technology, makes significant savings and production improvements possible. Finally, at the end of the day, these web-enabled programs help companies acquire the best talent at the best price.

An increasing number of Vendor Management Solutions are now being offered, some developed in-house by Staffing Agencies for their clients and others by e-HR application specialists; each with different degree's of functionality, scalability and maturity. The following summarises the main features and functions which you would expect to find in a comprehensive VMS offering:

- Automatic Generation & Distribution of Requisitions
- Customisable Workflow
- Candidate Matching & Duplicate Checking
- Engagement Management - Details & Logistics
- Tracking Time Sheet & Expense Approvals
- Reconciliation of Invoicing
- Integration with Payables, Receivables & General Accounting
- Management Reporting & Vendor Performance Analytics

Enterprises implementing a VMS, which provides many of these features, will experience the benefits of controlled costs by eliminating ad hoc spending through a preferred vendor compliance program with negotiated rates. A streamlined process for matching requisitions through the resources of selected suppliers and through the VMS you will be able to automate the matching, tracking and acquisition of candidates. Finally an integrated solution will enable you to access and report enterprise-wide workforce data as required.

Integrating with an Recruitment Management Solution (RMS)
Organisations are saving significant time and money with both VMS and Recruitment Management System (RMS) tools, but much greater efficiencies are possible by combining the two. Chris Colbert, human resources technology manager at Siemens Inc agrees: An integrated talent acquisition system would provide greater ROI by reducing the number of point solutions needed to build a complete workforce. Reporting and workforce planning would also be enhanced by having tools for vendor management and permanent recruiting in one system.

True vendor management solutions offer contingency workforce management tools - where the majority of ROI is realised. Integrated recruiting (including CV tracking, pre -screening and matching) of the temporary workforce coupled with time and expense tracking, vendor and candidate quality monitoring, approvals, consolidated billing and attendance round out what's necessary. Ideally Total Workforce Management solutions would let an organisation use one system to post a requisition for permanent, contract or temporary workers. This would include the flexibility to hire a combination of the above under one requisition. For example, suppose a company is looking for five technical writers, two of which will be full-time and the other three on one-year contracts. The line manager needs to be able to configure workflows on the fly so that the full-time hires go through their necessary approvals and stages while the temporary hires follow a different workflow.

In an integrated, seamless approach, the line manager would select where the requisition is to be distributed for the full-time hires (i.e. intranet, corporate career site, job boards, recruiters, etc.) and the organisation's approved staffing agency vendors for the temporary hires. The line manager should also be able to use the system to hire someone into the job temporarily and quickly (through a staffing agency) while the lengthier process of filling the position permanently is launched at the same time.

The applicants and the candidates submitted by staffing agencies would come back to the line manager appropriately flagged, pre-screened and ranked. The system would facilitate notes and communication between the line manager and vendors where necessary. It might also promote price/service competition between vendors, and at the very least, inform line managers of the benchmark prices for temporary, hourly and contract workers in their areas for the position in question. The system would track both permanent and temporary candidates through the process; interview scheduling, tracking correspondence, decisions, etc. Permanent and temporary candidates would route to different parts of the integrated systems for payroll, timesheets, attendance, performance pay, etc.

The VMS portion of the integrated tool would consolidate invoicing to the vendors and handle automated payments to contractors and consultants. For reporting, it would be possible to benchmark against other similar organisations to compare vendor rates, contingent worker salaries, process efficiencies, etc. As with RMS, the VMS portion of the system should track related budgets and use alerts to warn procurement or HR managers when contracts are expiring, for instance, or hiring targets not being met. ROI calculators should be capable of determining time and cost savings on a continuous basis. The system should contain an element of vendor and worker evaluation.

All permanent and contingent worker data would merge at the backend for complete workforce statistics, analytics, ad hoc reporting, workforce planning and cost/ROI information. This is the second major benefit of integrated RMS and VMS - a much more holistic and complete view of the entire workforce.

A Total Workforce Management solution would connect all recruitment systems and workforce planning components with VMS and RMS (including internal and external candidates) seamlessly. This, along with performance and learning management, might give organisations the first automated 360 view of their entire workforce. This might allow them to monitor performance against business targets, time and cost to hire goals, retention efforts, track skills and competencies, determine which positions are better to staff full-time versus with temporary staff, assess the performance and quality of staffing agency vendors as well as the candidates they refer, determine training and development needs and, in effect, properly align corporate objectives to available human capital once and for all.

Who in the organisation owns the Total Workforce Management?
Though at least two different parts of the organisation need to be involved in administering and owning the solutions, their different interests might actually aid in the process. Procurement/Purchasing cares about contracts, prices, and legalities, etc. The HR function, on the other hand cares more about people, quality of hire and best fit. Neither is usually interested in doing the other's job. Therefore, as Jim Grundner, V.P. at Peopleclick puts it: Both functions' strategic goals can be achieved while eliminating the conflicts caused by operating two disparate systems. It is becoming clear that workforce management decisions should be reshaped to maximise the total workforce. Whether you are in the market for a RMS or VMS, it would be prudent to insure platform integration down the road. A few Human Capital solutions providers are currently making efforts to combine tools that help organisations recruit and administer their permanent and contingent workforces. The first generation of fully integrated RMS/VMS tools is in the works. Further integration with workforce planning tools and then performance and learning management must follow.

Conclusion
Companies are now focusing on improving the quality and efficiency around their Human Capital supply chains. More organisations are utilising temporary services and outsourced functions to accommodate a number of business requirements. It is critical that companies know what is really happening in their Human Capital efforts and that they understand and able to implement those processes which assist the organisation in achieving its corporate goals with limited cost and increased efficiency.

By exploiting the business practices which have been used and proven in the acquisition of other services and goods, using supply chain principles, HR departments can put their own organisation at an operational and competitive advantage in maximising the efficiency and return on their Human Capital supply chain by levering strategic business relationships. By using the tools available (VMS / RMS) through the implementation of a Workforce Management Solution.

About the Author
Allan Schweyer (aschweyer@hr.com) currently consults with large organizations on HR strategies and specializes in e-recruitment projects. He is a senior researcher and analyst with HR.com and the guest editor of the HR.com staffing vertical.

About: Peopleclick provides workforce solutions to help enterprises efficiently build and manage a productive and effective workforce. Based in Raleigh, North Carolina, USA with International Operations headquartered in London, England, Peopleclick offers Global 2000 companies technology and services for Recruitment Management (clickXG-RMS) and Vendor Management (clickXG-VMS). The company has currently 325 employees serving more than 1600 customers in 38 countries worldwide.

www.peopleclick.com