Working in an MSP/VMS Staffing World

Managed service programs and vendor management systems have taken a substantial share of the staffing market, primarily with larger clients looking to streamline their staffing processes, reduce costs and gain better control of their programs. Whether or not this has always proven true is not the question, it is a reality that small to midsize staffing vendors have to accept and learn to navigate. The fact is, staffing firms do still have options and can choose whether to work within the MSP/VMS framework.

Perhaps a client is adopting the MSP/VMS model, or a prospective client would require participation. AS you decide whether to be part of such a program, consider your options carefully. Think smarter and evaluate your alternatives.

If  the economics and new relationships an opportunity presents are acceptable to you, agree to the terms and conditions and become a VMS vendor.

But if you do not want to work under an MSP/VMS, then you should seek out clients you can serve directly— this is still a sizeable market. You can work with trusted managers at the client, serving them directly, or, companies sometimes turn to niche providers outside a program to fill key roles that an MSP/VMS struggles to deliver. This has been done successfully.

And protect your carefully cultivated candidate relationships by developing contracts with penalties for “tempnapping” your people, directly or indirectly.

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In addition, you can improve your bottom line by taking steps to reduce your costs to service that account profitably, such as:

    1. Establish a preferred relationship with your client to offer these jobs to your first
    2. Institute an RIF to reduce your costs if you lose a large MSP/VMS client, reevaluate everything
    3. Use RPO recruiters that cost much less: cut your sales comm, skinny down your costs, etc.
    4. Consider your own RPO to provide better service, timeliness, controls, than via a third party
    5. If you want to grow, especially with larger clients you may require an internal RPO
    6. To become proficient in this area takes time and knowledge, start to explore this area

MSP/VMS relationships certainly are widespread, but there’s plenty of opportunity to be had outside that framework. If you determine an opportunity with such a client is worth it, then sign up. But there are options for firms that do not want to commit to such programs.

Michael Neidle

Michael Neidle
Michael Neidle is president and CEO of Optimal Management, an advisor to staffing firm owners and managers.

Michael Neidle

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