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These Are the 3 Biggest Trends in Workforce Innovation

Keeping up with the changing world requires constant innovation — and this includes hiring. Evolving technology, the shifting generational makeup of the workforce, and a candidate-centric market[...]

February 18, 2020

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Why Most Staffing Companies are Not Good at Working with MSP/VMS Programs

Disruptive change is a phrase frequently used to describe the evolving contingent staffing marketplace. And significant change often generates wariness, if not outright fear. So it may not be surprising that most staffing companies are not good at working with MSP/VMS programs. They aren’t sure what to expect, but they approach the situation with suspicion and negativity.

That’s not a recipe for success in any business endeavor, where low expectations generally become a self-fulfilling prophecy. It’s the staffing companies who are willing to embrace change and work to develop strong relationships within the parameters of MSP/VMS programs who are most likely to thrive.

Most staffing companies are afraid of being isolated from clients.

They see choosing to associate themselves with MSP/VMS programs as the end of business as they’ve always known it. Whether they have long-established working relationships with clients or not, staffing suppliers consider direct contact with those clients to be a basic tenet of success. They believe they will get lost in the “pack” of MSP suppliers, unable to stand out from competitors in order to secure new business.

Perhaps worse, most staffing companies assume that working through a third party will weaken or even eliminate their ability to fully understand client needs and expectations and, therefore, to deliver top quality candidates in a timely manner. They view that as a catastrophic customer service failure that could lead to their demise.

When staffing firms can’t envision a smooth, successful working relationship with MSP/VMS programs, they also see no opportunity to grow their business through increased placement opportunities or broader, value-added consulting or advisory services.

They’re also afraid that passing along candidate resumes and other data paves the way for MSPs which also recruit to “hijack” those candidates. Or that the program may allow clients to permanently hire workers they have placed without proper compensation.

All these perceived problems make many suppliers protective and reluctant to work closely with MSP/VMS programs. What they don’t realize is that positively committing to a successful working relationship could achieve their desired results, creating a stronger future for everyone in the supply chain.

Many staffing companies see vendor management systems as another obstacle.  

They see the software as driving another wedge between themselves and clients. Some suppliers simply don’t want to learn a new system, but most see the software as taking information from them but not giving them the information necessary to accurately and quickly respond to client staffing needs.

Suppliers complain that VMS systems don’t provide adequate feedback for them to measure or improve their own performance, so they’re left in the dark.

Lack of communication is the root of most concerns.

Staffing companies that want to work well with MSP/VMS programs have to accept equal responsibility for instituting communication that fully informs and addresses concerns. Otherwise, inherent gaps or inequities will guarantee poor quality results for suppliers, the program and clients.

What can we conclude from all this?

One reason the largest corporations are transitioning to MSP/VMS programs for contingent staffing is to eliminate having to deal with a multiplicity of individual staffing vendors. A single point of contact through which they can funnel and filter all contingent staffing needs is infinitely more efficient, if clients choose the right program. They can save time and improve consistency.

But the reality is that few, if any, staffing companies are in a position to meet all the contingent hiring needs of very large enterprises with diverse workforce needs. Repositioning their firm to work through MSP/VMS programs, and positively approaching this new opportunity, can actually enable suppliers to acquire new clients and serve them more effectively, focusing on what they do best – finding and placing top talent.  Follow the link to read our blog and learn more about MSP/VMS programs.

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