The true cost of not performance managing your agency partners

The problem with fragmented agency management

• No visibility into spend: Organizations lack a clear view of costs or agency usage across the business.
• Undefined metrics: There’s no consistent way to measure agency performance or hold partners accountable.
• Compliance risks: Inconsistent contracting leaves businesses exposed to legal and reputational damage.
• Administrative burdens: HR and TA teams are left to handle multi-invoice systems and timesheet errors with little standardisation.
• Missed opportunities: Poor oversight means organizations cannot optimize their contingent workforce or ensure cost efficiency.

This approach not only creates inefficiencies but also makes it impossible to track the true value or impact of agency partnerships.

How technology transforms agency management

Adopting a Vendor Management System (VMS) can help you centralize and streamline agency management, delivering significant benefits:

1. Centralized visibility

A VMS provides a complete view of contingent labor:

• Spend by location, supplier, and role.
• Fulfillment rates by agency and site.
• Agency scorecards to measure performance and accountability.

With real-time insights, organizations can make informed decisions and address issues before they escalate.

2. Cost Control

Without oversight, agency fees can quickly spiral. A VMS helps standardize and optimize costs by:

• Benchmarking pay and bill rates.
• Eliminating ‘maverick spend’ through competitive bidding.
• Consolidating budget tracking for better forecasting.

3. Compliance confidence

Managing agencies without a centralized system exposes organizations to significant risks. A VMS automates compliance workflows, ensuring:

• Proper worker classification and contracting.
• Adherence to legal and policy standards.
• Audit-ready documentation for risk mitigation.

4. Measurable performance

Tracking metrics like fulfillment rates, turnover, and worker ratings allows organizations to identify top-performing agencies and address underperformance. This ensures only high-quality talent is sourced, enhancing workforce productivity.

5. Streamlined processes

Manual processes are time-consuming and error-prone. A VMS automates key workflows, including:

• Requisition creation and supplier distribution.
• Onboarding and offboarding processes.
• Timesheet and invoice management, reducing administrative burden.

The strategic value of agency oversight

Agency management is not just about filling roles—it’s about ensuring you get the best talent at the right cost while maintaining operational efficiency and compliance. Technology empowers HR, TA, and Procurement teams to move from firefighting to strategic workforce planning.

Key metrics to track include:

• Fulfillment rates: Are agencies meeting targets?
• Worker quality: Are they consistently supplying top-rated talent?
• Cost efficiency: Are spend levels aligned with benchmarks?
• Compliance adherence: Are agencies delivering against contractual obligations?

The cost of inaction

Failing to manage agency performance leads to escalating costs, compliance risks, and a lack of workforce optimization. It’s a multimillion-dollar issue that many organizations underestimate, and which we explore in more depth here.

Take control with technology

A VMS provides the tools to centralize agency management, reduce costs, and drive measurable improvements. By taking a strategic approach, organizations can turn agency partnerships into a competitive advantage rather than a liability.

See how you could organise your agency relationships today.