“Smaller” Spend Levels Can Call for an MSP/VMS

187398417When a company processes less than $20 million in annual temporary labor spend, does it make sense to deploy an MSP/VMS program? Operationally, administratively and financially, the answer is “yes.”

In the past, many companies worried that annualized spend of less than $20 million did not warrant – or could not sustain – a full MSP/VMS solution.  To some extent, that was true, and so these companies managed their programs in-house through their Procurement and/or Human Resource teams.

Today, innovative MSP/VMS service providers are able to deliver the benefits offered through these programs within more spend-restricted environments.  This is accomplished in a number of ways, including shared program management staff and scaled technology platforms (i.e. VMS Plus).

What are the benefits of implementing a comprehensive MSP/VMS solution for your company with “smaller amounts” of temporary labor spend?

The benefits are the same as one could expect for a program with hundreds of millions in annual spend.  The reduction in redundant processes in temporary workforce management controls costs, enhances productivity, shortens temporary labor lifecycles, and fosters compliance with standardized terms and conditions.

PREMIUM CONTENT: 2014 Contingent Buyers Survey: VMS/MSP Use Hits New Highs

Think of an MSP/VMS solution as a 1,000-piece puzzle set—a superior MSP/VMS provider will take the time to examine all of the pieces of the puzzle to make certain that they fit well together.  Things become even more complicated when all of the pieces are moving, as we all know that they so often are in these situations.  We all want seamless services that achieve business goals and objectives, and companies with less than $20 million in annual spend are no different.

This is where a strategic MSP/VMS steps in to build a relationship, which results in the understanding of culture, preferences, and requirements.  Through this tailored approach, an MSP/VMS will ensure that companies obtain maximum benefit.

Lets’s conider the question. I’m considering exploring the MSP/VMS space.  What should I look for and worry about?

As with all things in life, not all MSP/VMS providers are created equal.  We recommend that companies strongly consider the following five factors:

1. Effective Goal-setting. It is critical that companies’ business needs and goals are prioritized.  Moreover, inviting all affected stakeholder audiences to have a voice in the design and selection process will minimize future change management concerns—this is especially critical for companies with <$20 million.

2. Collaborative Partnership. Your MSP/VMS provider should be responsible for continual improvement, and seek to generate a custom solution that reflects your unique requirements.  Cookie-cutter solutions typically don’t make the best cookies.

3. Scalability. Effective MSPs for contingent labor are expanding to include SOW vendor and/or IC management.  Can you elevate the level of service available to you by scoping in other types of commodities or productivity channels?

4. Stability. Some providers of MSP services emerged when they saw the opportunity develop within the staffing industry.  The same applies to VMS providers.  You should seek to understand the provider’s true depth of knowledge not only of MSPs, but also of the staffing industry as a whole.

5. Technology. While there are many VMS solutions on the market, they offer varying levels of benefits for a number of reasons.  Paramount among them are flexibility and support.  A number of VMS solutions are designed as off-the-shelf tools; they are not easily configured and service providers recommend adjusting internal workflows to meet their processes, as opposed to customizing workflows on behalf of the customer.

MORE: Food for thought when considering a VMS

Joe O'Shea
Joe O'Shea is director of client strategy and development for Superior Group.

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