A contractor management system is a single solution that allows you to view your contractors’ scope of work, their responsibilities, deliverables, payment milestones and more, so that you get a bird’s eye view of all your contractor operations.
The days of relying on manual and disparate processes for contractor management are in the past.
Today, Procurement leaders can reduce costs, streamline workforce augmentation, boost compliance and manage communication and payments with greater ease when working with a contractor management system.
Choosing the right tools and technology has therefore become an integral part of the Procurement lifecycle. If you’re at square one, here’s everything you need to know.
How Does it Work?
Today, contractor management still follows the traditional format, which is manually and via endless spreadsheets. However, today’s solutions offer seamless and smooth onboarding of contractors without the manual headache. No more invoices, contracts or legal documents piling up on your desk or any human error.
So, what’s the solution to all this? Implementing a modern contractor management platform that lets you customize and automate the entire contractor lifecycle, securely, and that way you can continue to operate your business smoothly, while saving precious time and money.
Features of Contractor Management System
Different contractor management systems will offer their own benefits and features, but there are a few elements that you’ll see come up time and time again when you’re completing your research. Look out for:
Contractor Onboarding and Offboarding
A strong procurement process will always be able to shorten time-to-hire. Similarly, when it’s time to end a relationship with a contractor, a good offboarding workflow ensures feedback is centralized, and important elements like removing system access aren’t forgotten.
Compliance Management
Risk management is a critical part of Procurement, and with contractors — there’s even more to consider. From tax compliance to misclassification risk, contractor management systems should be able to take the compliance headache off your hands so that you never have to worry about financial or reputational risk.
Contract Administration and Document Management
One popular feature when using contract management systems is documentation. This includes the ability to automatically collect the right documents and signatures when onboarding, and implementing a system to alert you when these documents are going to expire.
Job and Work Order Management
What projects are your contractors currently engaged in, and across what teams? A strong solution will help you optimize dollar value by showing you high performing contractors and those that are not currently engaged in work, plus give you the tools to track milestones and performance.
Safety and Risk Management
Contractor management systems are all about giving that all important visibility to reduce risk. Whether it’s freelancer misclassification that could lead to steep fines, the wrong forms slowing down filing, or improper offboarding leaving you open to a data breach — it’s time to channel Aerosmith, you don’t want to miss a thing.
Contractor Performance Tracking and Reporting
By standardizing the software you use to manage contractors, contractor management systems give you a single pane of glass into your freelance workforce. This gives full visibility and control, helps you track utilization, and even supports integration with business intelligence for deeper analytics and reporting.
Benefits of Using a Contractor Management System
With such wide capabilities, it’s easy to see why Procurement leaders are increasingly using contractor management systems. By centralizing all of their information and processes, efficiency and productivity are given a boost, shortening time-to-hire and so therefore speeding up time to value on new projects.
Contractor management systems are also great for improving compliance and risk management. Without automation and technology, even if a freelancer is classified correctly when they start working with your business, there’s no way to know that this situation has remained the same over time. The documentation functionality also means that you have all the right forms and information when tax filing season rolls around.
For many businesses, the top benefit of using software to manage contractors is relationship management. When contractors are paid accurately and on time, and when they have transparency into their projects and milestones, it’s easier to form long-term relationships that inspire loyalty.
Without a contractor management system, Procurement teams are often reliant on staffing agencies, who increase costs by charging their own markup, and actually reduce the pool of talent you can draw from. With the right technology in place, companies can achieve substantial cost savings, while shortening time-to-hire and time to value.
Choosing the Right Contractor Management System
Making the final choice about a contractor management system will come down to your specific wants and needs. However, you can work through this checklist to help you make the right decision:
- Define your goals: What are you hoping to achieve with the solution? If you want to reduce time-to-hire, you’ll need a system with sourcing capabilities. If your ultimate goal is to reduce misclassification risk — check for compliance-ready features.
- Evaluate functionality: Once you’re sure your choice has all the features you want, and isn’t weighed down with unnecessary bells and whistles, take it for a spin. Your vendor should be able to offer you a trial or a demo, where you can test ease of use, and make sure it’s intuitive for you and your team.
- Ensure scalability: Just because a system works well for 2 or 3 freelancers, doesn’t mean it fits the bill for 50 or more. The freelance revolution isn’t slowing down any time soon, and organizations are likely to only increase their use of contractors. Scalability is therefore essential.
- Consider integrations: What systems do you currently use that you’ll need your contractor management solution to play nicely with? You don’t want to end up throwing out the baby with the bath water. Speak to your potential vendors about how everything works on the back end.
- Read up on reputation: The right vendor will be one that can support you down a well-worn path to success — one that they’ve done time and time again. Look for years of experience, happy customer testimonials, references, great customer logos, an industry-wide name, and more.
Fiverr Enterprise: A Single Solution for Procurement Leaders
At Fiverr Enterprise, we recognize that today’s procurement leaders need to be able to source and hire expert talent, while retaining complete visibility and control. That’s why our SaaS solution is built from the ground up to give you exactly this.
Fiverr Enterprise provides four unique benefits targeted at Procurement leaders:
1. Streamlined sourcing and hiring
Hiring freelancers is one thing, but what about the right freelancers? Talent that can get the job done, and is also able to compliantly work with your business and hit the ground running. We offer pre-vetted, business-ready talent so that you don’t have to waste time on the sourcing process. Just post a job in your own words, or using one of our templates, and in just 48 hours, we’ll provide a list of 2-6 candidates that fit the bill. Short on time? Use our pre-selected list of ready to go talent and start immediately.
2. 360 degree compliance
Compliance is critical, but that doesn’t mean you can afford for it to slow you down. The sheer amount of paperwork can be an operational nightmare, especially as legal and tax compliance varies from one region to another. We monitor all relationships continuously, from onboarding to offboarding, validating that documentation is accurate and signed, alerting to high risk relationships, and taking the legal and tax liability off your hand. Automated workflows collect and manage everything from W2’s to 1099s and beyond.
3. Your own private talent pool
Once you’ve found great talent, you need to make sure they are easy to work with, again and again. And yet too many relationships are handled through siloed team members, or with the only communication via email or WhatsApp. Fiverr Enterprise builds you your own already compliant, personal talent pool, filled with all the freelancers you’ve worked with, plus ex-employees, or even unsuccessful candidates that would be a good fit. Filter by skills, time zone, reviews or rates, and get started faster with new projects as they arise.
4. Customized payment terms
When you’re working off payroll, things can get complex fast. Your freelancers want to be paid according to their own terms, but you need to keep to your own payment cycle. Put complicated payment processes in the past by consolidating all of your freelance payments into a single global invoice. Break it down how you choose, by spend, PO or cost center. Then pay your global freelancers with flexibility, whether that’s hourly, by project or by milestone – in 190 countries and 80 currencies, and via 7 different methods..
Want to learn more? Schedule a 30-min call with one of our workforce experts, and see how it works for yourself.
Related content: Read our guide to vendor management system
Related content: Read our guide to contractor management software