• 3,000 firms
  • Independent
  • Trusted
Save up to 70% on staff

Home » Articles » Why your business should have a vendor management system this 2024

Why your business should have a vendor management system this 2024

Why your business should have a vendor management system this 2022

A vendor management system (VMS) allows businesses, primarily those in the staffing industry, to manage, organize, and track their recruiting partners, open job orders, and other processes.

VMS platforms are mostly web-based, with the users only needing a working device and a strong internet connection to navigate it.

Companies often invest in vendor management systems to streamline their recruiting process. Without them, businesses would have a hard time expanding their workforce.

How does a vendor management system work?

To put it simply, a vendor management system makes expanding the company’s workforce smooth and automated. With the help of the system, recruiting is faster, easier, and cost-effective. 

  • The system collects active job orders and acquisitions from different recruiting agencies and staffing firms.
  • It automates the sourcing and collection of relevant résumés and curriculum vitae. 
  • VMS produces data that can be easily digestible for reporting purposes.

Oftentimes, VMS platforms help companies in managing contingent workers like freelancers, independent remote contractors, consultants, and non-permanent employees. 

Get 3 free quotes 2,300+ BPO SUPPLIERS
How does a vendor management system work

3 reasons to use a vendor management system

Most, if not all, companies that procure their workers from staffing agencies use a vendor management system. Their needs and goals vary, but here are the top reasons to help you decide whether your business needs this tool.

Increased efficiency and productivity

Talent acquisition is a time-consuming process, not to mention requiring a lot of effort and work for both parties involved.

With a system, procuring new contingent or contract workers is more efficient. Recruiters and hiring managers can now focus on their core responsibilities other than hiring external talents.


Let’s say that a startup company wants to hire independent contractors, but they don’t have any means to pull together a hiring team in a timely manner. Their next option is to get their contractors via a recruiting firm.

In order to be successful with the project without going over the budget, the startup company in this scenario needs to invest in a vendor management system. 

Streamlined processes

Every second spent at work is billed. This is one of the reasons why streamlining lengthy processes is important to any business. With a program like a vendor management system, employee acquisition has never been easier.

3 reasons to use a vendor management system

Who uses a vendor management system?

With the exception of enterprises that hire workers through staffing agencies, most users of the program are in the staffing and recruitment sectors.

Get the complete toolkit, free

Staffing agencies

These firms are service providers for companies and organizations that need positions filled as soon as possible. Oftentimes, they work with multiple clients throughout the whole recruitment cycle.

Recruitment process outsourcing (RPO) companies

RPO companies utilize tech and programs that help them fill up positions faster and without having to charge their clients more. 

They also oversee their clients’ full recruitment and talent acquisition process, just like a staffing agency. One major difference between RPO companies and staffing agencies is that the former often follows service-level agreements (SLA).

Things to look for in a vendor management system (2024 checklist)

Once you’ve decided that your business can benefit from having a vendor management system, here’s a checklist of things you need to consider when exploring options.

Plug-and-play system

Is the system easy to set up? Is there 24/7 support available for any problems that may arise? For any system that will be deployed to a workplace, these questions should be answered before making the decision.


If we’re being honest, not all employees are technically-inclined. It’s why user-friendly interfaces are important, no matter what system or application it is.

The VMS will be used by anyone in the hiring team, both by experienced users and newbies. An easy-to-use interface will make all the difference.


Some of these programs aren’t exactly inexpensive⁠. But when it comes to quality, it’s better to choose a more expensive one that has more features and a top-notch security protocol.

Easy integration

Vendor management systems are made to be integrated with other programs to make the process even more efficient.

Things to look for in a vendor management system (2024 checklist)

For instance, the VMS can connect to these applications and programs:

  • Accounting and bookkeeping software
  • Human resource information system (HRIS)
  • Time-tracking tools
  • Enterprise resource planning (ERP)

Choosing the right VMS provider

The right VMS provider will make the company’s talent acquisition process easier, not to mention it will change the flow of the old system for good.

So, before jumping the gun and deciding on a solution provider, it’s best to consult with the affected parties, such as the recruitment team, human resources, and the training department.

Keeping the process of acquiring a new platform transparent is key to a better workplace.

Get Inside Outsourcing

An insider's view on why remote and offshore staffing is radically changing the future of work.

Order now

Start your
journey today

  • Independent
  • Secure
  • Transparent

About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

Learn more
Banner Image
Get 3 Free Quotes Verified Outsourcing Suppliers
3,000 firms.Just 2 minutes to complete.
Learn more

Connect with over 3,000 outsourcing services providers.

Banner Image

Transform your business with skilled offshore talent.

  • 3,000 firms
  • Simple
  • Transparent
Banner Image