There has been a lot of discussion around TempWorks regarding Vendor Management Solutions and Managed Service Providers. With the nature of our business we have clients that ask us to integrate to various Vendor Management Systems (VMS) to help the process of submitting their employees to order for other companies. On the flip side, we also have clients that run a small portion or majority of their business being a Managed Service Provider (MSP) for vendors to help fill their own internal orders. My question is, how beneficial is using or being a vendor? How do companies in the staffing industry get into such services?
When you are looking to work with different VMS applications, what is driving your decision to do so? Typically, a staffing firm has a couple of reasons for involving themselves in this activity. The first is that they have qualified employees that are looking for work, but don't have internal orders to fill. The second reason could be that they are contractually obligated to work through a VMS application for their client. The third main reason is because the only way they can work with a client of interest in their area is to supply employees to the staffing firm that already has the contract for that client when they can't internally fill their orders.
When you become a MSP you basically take the reins to manage all orders for a client or clients. You are in charge of reviewing and managing all employees that are submitted by the vendors above through the VMS application. Finally, its your responsibility to ensure the placement of the best candidates for the position. Where are the benefits here?
When becoming an MSP you have the ability to capitalize on metrics that are important for client/staffing firm relations. Order-to-fill or Time-to-fill ratios are a measurable metric that will determine how successful a firm can quickly fill orders. Being an MSP will allow the staffing firm to fill the order as fast as possible with all qualified candidates they have internally. After they have the first run at the order, they can push out the order to other vendors to submit candidate to help complete the order. The ability to automatically pull employees from other vendors will ensure time isn't wasted recruiting additional people to fill the last remaining spots for the particular order. Sounds good right?
We have been doing a lot of consulting for companies that have shown interest in starting an MSP division or entity. Before we walk in the door we have a wide range of perceptions on how they are going to work. Some clients give preferential treatment to their employees, others try and maintain 100% vendor neutral. How do you know what's appropriate and how to best approach this new division? Even if the payout is attractive, is it beneficial to your core business to start submitting employees to other vendors? Is it beneficial for you to start putting your stamp on other vendor's employees to work for your client? We can help you identify what next steps you should take and what you need to consider. Feel free to give me a call at 651.287.8377 if you're looking to move into either of these spaces.
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