When it comes to managing your contingent workforce, many practitioners are already aware that using a combined managed service provider (MSP) and vendor management system (VMS) can bring several benefits, especially when coupled with a purely vendor-neutral provider.
Yet with this increased awareness comes a more crowded market. Discerning a combined MSP/VMS from a standalone VMS is simple, but identifying a truly vendor neutral provider is often easier said than done. Here’s how to tell the difference along with the benefits and lessons learned.
Defining Purely Vendor Neutral
Pure vendor neutrality only exists when the MSP or VMS provider has no affiliation whatsoever with a staffing agency.
“The vendor neutral, combined MSP/VMS solution can benefit many different kinds of organizations,” said Andrew Karpie, research director of services and labor procurement at Spend Matters. “But it can be especially valuable for several kinds of companies that use a contingent workforce and are committed to a formal program — or are just embarking on one. In such organizations, limited resources and expertise make the option of a cost-effective bundled solution and experienced service provider very compelling.
Karpie added, “Vendor neutrality is also crucial for such organizations, because it ensures there will be no conflicts of interests in establishing the supply base and that supplier management will yield maximum savings and service performance. In these cases, this type of solution will likely be the optimal choice.”
“Our clients will tell you that the vendor-neutral approach consistently delivers the highest quality talent at market-driven competitive rates,” said Andrew Popler, executive vice president of business development at PRO Unlimited. “Suppliers embrace the vendor-neutral MSP model and are never hesitant to present their best candidates for consideration. The results achieved by adopting this approach are advantageous for all program stakeholders.”
Indeed, screening for pure vendor neutrality yields several benefits in the long run. When no one staffing firm is unfairly prioritized, true supplier optimization is possible, giving the business the best cost and highest-performing talent.
Creating a competitive environment for sourcing labor, while ensuring a level playing field, enables rather than impedes the use of lower cost, direct sourcing options such as independent contractors and freelancers. Finally, pure vendor neutrality means the solution provider is beholden to no one other than the client, which is the never case when the MSP can compete to fill requisitions.
Lesson Learned: Watch out for “labeled” vendor neutrality, where an MSP may not be owned by a staffing firm, but tightly affiliated, leading to hidden rules that negate the vendor neutrality of the program.
Better Together: The Combined MSP/VMS
The clearest benefits of a combined MSP/VMS are efficiency and cost-effectiveness. Instead of adding yet another solution to the list of technology that practitioners need to oversee, a combined offering provides a one-stop shop for users of all kinds. For either a labor category manager or internal business user, a combined MSP/VMS becomes a single, go-to resource for everyone’s staffing needs.
At the same time, fully integrating an MSP with a VMS maximizes use of the latter’s functionality, a shortcoming in many independent VMS implementations. If an organization is going to pay for a VMS, it might as well extract as much value from the solution as possible. Full utilization of a VMS can also lead to superior cost efficiency down the line.
A tightly coupled MSP can also help an organization achieve greater agility and fit with a VMS, both at implementation and over time. A standalone VMS runs the risk of becoming just a mere tool; a combined approach can offer a broader scope of data analytics and value-added services. Plus, over the long haul, such an offering provides clients more influence on the product roadmap and ensures real staffing and business needs are addressed in future versions of the solution.
Lesson Learned: Superior cost efficiency, greater agility and pure simplicity from a combined solution start at implementation and increase over time — wins that cannot be achieved when an MSP and VMS are used separately.