Recently I have seen considerable ink dedicated to promoting the merits of VMS/MSP programs. Perhaps it is time to change the discussion to a more realistic view from the perspective of small to midsize agencies struggling with the challenges of today’s business climate.
As a co-founder of the National Healthcare Staffing Alliance (dedicated to the interests of small to midsize healthcare staffing agencies nationwide), I have had countless conversations with owners and operators over the last few, very difficult years, and the message is always the same: VMS/MSP companies pose many challenges for this industry, not the least of which include rate suppression, wage suppression, margin deterioration and a host of other ills.
After a client adopts VMS/MSP model, new, unhealthy realities for staffing firms (both in terms of fiscal integrity and quality initiatives are often created. They involve
- Restrictions from working and communicating directly with the end users;
- Onerous and one-sided terms and conditions, not the least of which includes allowing facilities to hire your staff with no or very little compensation to you for the conversion;
- In many cases you must provide an unreasonable amount of unbillable orientation;
- Documentation requirements that may run afoul of federal laws;
- Significant penalties for failure to complete a contract, even if for a legitimate reason, such as death;
- Reduced margins: bill rates are reduced by $8to $10per hour, and the VMS/MSP charges you 3 to 4 percent of sales and other incidental fees; and
- Your staff must learn yet another staffing software program.
More realities that affect your internal and contingent staff include raises that become nonexistent, the risk of private and critical information being accessed by strangers, and contingents become exposed to covert efforts to “poach” them from their home agency.
With 2014 and implementation of the Affordable Care Act, along with a sizable percentage of baby boomer healthcare workers retiring, healthcare staffing is poised for a healthy rebound. As margins continue to fall due to VMS/MSP proliferation, where does that leave the small staffing agency? As VMS/MSP gain strength, they will gain power and they can see to your demise. What is their end game? I believe it’s your client base, as with a reduced pool of staffing resources and market competition eliminated, rates will soar for the providers.
Most VMS/MSP models prevent staffing firms from working directly with clients to problem solve, manage risk exposure and develop agreements containing fair and equitable terms, conditions and rates, and make a reasonable profit.
Take back control of your destiny as a company. If you meekly accept what is being dished out, then you may not survive the next four years. Take a stand, make your voices heard:
- Educate your client base about options to achieve their objectives and partner with them to successful solutions;
- Educate your professional staff as to why their pay rates are stagnated and being reduced;
- Demand fair and equitable terms, conditions and rates from VMS/MSP companies you work with;
- Join and be active in associations or groups that are clearly advocating for you as small businesses, a collective voice is louder and more powerful;
- STOP signing on to ridiculous indemnity clauses that cause you to take full responsibility over situations you do not control; and
- Perhaps the most important action you could take: Talk to your competitors in your area, see if you are of like minds and take a stand. No collusion, just strategy to survive the assault. It’s your company, your professional staff, it’s your industry. Stand up, be heard!