Vendor Onboarding Checklist

Content:

Why Vendor Onboarding Needs Structure
What Is a Vendor Onboarding Checklist?
Key Elements to Include in Your Vendor Onboarding Checklist
Ensuring Compliance from Day One
Leveraging Automation to Simplify Onboarding
Best Practices for Successful Vendor Setup
How TalentDesk Streamlines Vendor Onboarding

When you are working with talent vendors, there may be some confusion about the onboarding process. This is because unlike in a direct freelancer engagement, here, you are not onboarding the individual workers – you are bringing on board the supplier who will provide the talent.

Think of the process as broken down into two stages.

Stage 1: You’ve already selected a talent vendor, and now, you need to bring them on board. This requires you to verify the business registration details of the vendor company, ensure that comprehensive contracts are signed, check that the right insurances are in place and so on.
Step 2: The vendor onboards their own team of contractors, ensuring their identity is verified, their tax forms are on file, the necessary NDAs are signed and more. These are essentially the contractors that the vendor will provide to you, to work on your project.

This is why it is crucial to have a structured onboarding process when managing vendors. It helps you streamline and establish who is responsible for which step, and ensures you check the boxes that fall within your purview. Here, we will look at what a good onboarding checklist looks like – and what happens without it.

Why Vendor Onboarding Needs Structure

Inconsistent vendor onboarding processes require you to reinvent the wheel each time, creating much confusion and miscommunication. Consider this.

You have a project starting in 2 weeks, and you want to use the services of a new talent supplier to access the freelance professionals you will need. You have already shortlisted a few vendors, but…

You need to work with your procurement team to identify which vendor will offer the best value.
You don’t know exactly what to include in their contract, so now you need to wait for inputs from your legal department.
Your HR team still needs to chip in and tell you what compliance protocols you will need to follow.
The finance and accounts departments need to be updated with the vendor details so that the payment information can be updated on your systems.

Do you think you’ll be able to onboard the vendor in 2 weeks?

The example above shows what happens without a streamlined onboarding process for vendors.

You face delays, trying to coordinate with the different departments and get them to process different requirements.
You may miss a step or two, which goes unnoticed initially, but can lead to misclassification, co-employment issues or penalties down the line.
There’s a complete lack of transparency, where nobody is quite sure which steps are done, which ones are yet to be handled, and how long the whole process will take.

Here’s why structured onboarding matters.

1. At the organizational level

Risk mitigation – It tells you exactly what steps need to be conducted and what documents need to be gathered. This means you need not worry about something getting missed out.
Vendor performance – It helps you choose the right vendor and establish expectations, KPI metrics and review timelines right from the start. This sets you up for getting the best ROIs down the line.

2. At the project level

Operational speed – It cuts down onboarding time with minimal intervention on your part. Each team involved, be it procurement, legal, HR or the project team, knows where they need to step in. This ensures the process runs like clockwork.

Team alignment – The vendor knows your requirements and expectations, so they are able to match the right talent to the right role. Subsequently, your contingent team is ready to be up and running faster.

What Is a Vendor Onboarding Checklist?

A handy onboarding checklist standardizes the process – it lists out all the steps you need to carry out to onboard your talent suppliers in a compliant way. This checklist is very useful throughout your vendor onboarding journey.

During the selection stage: It helps your procurement team identify the best vendor for your needs. Having all your requirements listed out enables them to take a more objective view of which vendor will be the best fit for the price.
During the onboarding step: A checklist brings together contract insights from your legal team, compliance and classification requirements from HR, payment data requirements from your finance team and so on. Essentially, it helps you ensure that all the right documents are gathered and all the necessary information is on file.
At the project execution stage: Once the project begins, your managers and project leaders will use the checklist to keep the work running smoothly – by ensuring the required accesses have been granted, the contractors have been sent the relevant project information and have been introduced to the people they will be working with.

Overall, a vendor onboarding checklist improves consistency and reduces oversight. Most importantly, it automates many parts of the process, reducing the need for you to keep track of and implement every step manually.

Key Elements to Include in Your Vendor Onboarding Checklist

The steps you include in your vendor onboarding checklist will depend on your industry, company and specific project requirements. Here’s a broad checklist template you can use as your starting point.

Vendor Onboarding Checklist
Stage		Checklist
Business needs assessment: These steps help you establish what your needs are and ascertain what support you need from vendors.		Assess the project requirements to establish the volume and quality of work needed. Evaluate internal capabilities to know where the gaps are, and where you need external support. Align your stakeholders on what you require from your talent vendors. Put together the budget for engaging a talent vendor and get the necessary approvals.
Vendor fit analysis: These steps let you compare the different vendors and carry out the necessary due diligence before bringing them on board. Read Vendor Selection Best Practices for more.		Conduct a formal KYC to verify the vendor’s identity – validate their business name and registration details. Verify the vendor’s financial history to ensure they are operationally sound. Confirm that they have the licenses, industry certifications and insurances needed. Check their performance history and track record with past projects. Ask for testimonials from their satisfied clients. Verify their capacity, corroborating that they can indeed provide the headcounts they are promising to provide.
New vendor documentation: These steps ensure you collect all the necessary documents from your shortlisted vendor. Read Contract Management in Vendor Relationships for more.		Gather signed legal documents – vendor contracts, Scope of Work (SOW), Non-Disclosure agreements (NDAs). Note: Coordinate with your legal team here to reduce liabilities. Collect compliance documents like the vendor’s tax registration number, data privacy declarations, cybersecurity declarations, and ESG disclaimers. Note: Coordinate with your HR team here to maintain compliance. Collect the vendor’s financial information – like bank statements, payment details and insurances. Note: Coordinate with your finance team here to reduce liabilities. Ask for any industry-specific requirements like updated licenses, and certifications of each contractor.
Internal vendor record creation: These steps are required to add the selected vendor to your internal systems, for smooth operations.		Create the vendor’s profile on your procurement tool or vendor database to have their details on record. Add their details to your payment portal, so you can approve invoices and pay them with ease. Add them to your project management tool so they can access the right data files and track deadlines. Invite them to your communication channels and relevant project groups so they are kept in the loop about any updates or notifications.
Performance benchmark setting: These enable you to hold your vendors accountable, ensuring they are meeting KPIs and (quantifiable) metrics.		Agree upon project milestones, delivery dates and timelines. Mutually decide and establish how work quality will be measured. This largely depends on the benchmarks of your industry, so this will need to be customized. Set review processes – ensuring your vendors know how frequently they will be reviewed, what they will be audited on and what benchmarks you expect them to meet.
Communication protocol setting: These help establish the communication protocols to be followed and the expectations you will have to ensure smooth operations.		Identify a vendor POC, who will be the go-to person you reach out to in extraordinary circumstances (delays at the vendor’s end or scope changes at yours). Schedule status updates. Given that you can’t micromanage the contractors supplied by the vendor, how often would they need to check in to provide updates? Establish typical response times, eliminating the need for unnecessary follow-ups. Set out escalation protocols that will guide the next steps in case of any issues or complications.

Ensuring Compliance from Day One

Aside from the steps above, there may be extra vendor-compliant onboarding steps you’d want to take – based on your specific company needs, values or legal mandates in your region. These may include:

Industry-specific regulations: These obviously would vary from industry to industry. For example, vendors operating within the healthcare space may need special certifications validating their skills. Those in food-related industries may require licenses from the F&B authorities. Your talent vendor should ensure every worker they provide are covered by these licenses – and it is your right to perform compliance audits to verify this.
Ethical sourcing and labor requirements: These may be set out by your organization or by the labor laws in your geography. For instance, you may want your talent suppliers to meet your company’s diversity mandates – by maintaining certain gender ratios in their leadership teams, or by following certain ethical hiring requirements.
Environmental factors: If yours is a sustainability-focussed organization, you may also want your vendor teams to uphold those values. You may do this by putting KPIs around their green footprint, carbon emission levels and so on.

Implementing the steps in the checklist, as well as these additional compliance factors should enable you to hold your vendors accountable, maintain compliance protocols and keep your projects running smoothly – from day one.

Leveraging Automation to Simplify Onboarding

The key to managing onboarding timelines and documentation across multiple suppliers is to automate as much of the busy work as you can. Some tasks like negotiations, subject matter assessments and building relationships need human intervention – but the rest can and should be automated.

What does an automated vendor onboarding process include?

An onboarding checklist like the one above, so your process is set and you can scale up and apply it to as many suppliers without having to reinvent the wheel each time.
Templatized contracts, NDAs and agreements customized to your organization’s needs. These should be accessible to everyone across the company, so that any manager can download, edit and use them when engaging a vendor.
Smart workflows that give you real-time status updates, schedule call invites, and generate auto-reminders for steps that have not been performed yet.
Tailored templates for onboarding emails that managers can quickly review and send out. For example: Emails requesting a vendor to submit their tax documents or provide KYC information.
Most importantly, an automated onboarding process should integrate your procurement, finance, HR and VMS functions so data does not get lost (or duplicated) in department-specific systems.

Best Practices for Successful Vendor Setup

An onboarding checklist is just a starting point. Beyond this, there are some supplier onboarding best practices you can implement to ensure compliance and ease.

Define internal responsibilities.
Assign a POC who will handle every aspect of the vendor onboarding process. This person will liaise with internal stakeholders, the vendor POC and the contractors the vendor provides. Alternatively, you can also internally assign specific responsibilities about who will handle what.

Set up approval checkpoints.
Chalk out workflows, dependencies and expected approval timelines. This makes the whole process more transparent and predictable – your vendors know when they need to submit work, timesheets and invoices.
Use process documentation.
Documenting every step of the process makes it easy to track KPIs, review vendors and handle compliance audits. This way, if a vendor consistently falls short in terms of work quality, meeting timelines or certification upkeep, you have proven documentation to hold them accountable.
Offer clear onboarding guidance to vendors.
Having a defined onboarding process for vendors lets you communicate clearly about the contracts, payments and more. This cuts down on follow-ups – your vendors know exactly when they can expect signed contracts to come in or payments to go through.

How TalentDesk Streamlines Vendor Onboarding

TalentDesk is a top tool when it comes to helping you manage and automate the end-to-end vendor onboarding process.

We help you set the vendor onboarding process.
A lot of organizations working with talent vendors don’t know how onboarding works and what is the implication of missing out a few steps. We streamline and optimize each step, helping you build a scalable, replicable process that you can use for the first vendor you onboard locally – or the 50th talent supplier you engage half way around the world.
We create built-in compliance workflows.
We create a custom onboarding process for you, automating the most crucial compliance steps and building it right within your workflow. This means ID checks, KYC checks and document collections are all tracked by the system and reminders auto-triggered, so you don’t have to manually follow up across internal and vendor-side teams.
Our centralized dashboards offer visibility across teams.
Every approved member of your team gets full visibility on which step of the onboarding process is currently underway and who is the responsible stakeholder at each step. This helps you streamline dependencies and keep the process moving.
We centralize contract and SLA management.
Compliance documents and other contract paperwork are all stored centrally in the cloud. This makes it easy to immediately spot any step that has been overlooked or pull up specific vendor details during audits.

The result? Your onboarding step gets simplified so you can welcome new vendors on the team and start the engagement on a positive note – while knowing you never have to worry about co-employment issues or compliance missteps down the line.