Vendor Neutrality: Revisiting its Relevance

Over 15 years of practicing vendor neutrality has recently got me wondering if it’s still necessary. Here’s how it played out in my journey.

In 2005, I got a job managing the contingent workforce for a large healthcare benefits company.  Managed services was a new concept to me, and vendor management systems were not commonly available. The staffing company that previously led the program handed us a stack of papers as they walked out the door and mumbled, “Here’s the history of the program.” Scrambling to understand what we’d just walked into, we immediately began to establish ourselves as key advisors to our client sponsor, implement operational processes and create a supplier program based on vendor neutrality. We wanted to maintain a fair and level playing field for the program, the client and the suppliers. This meant having one unalterable contract with terms that did not favor one supplier over another. And this worked for a long time.

In 2012, we implemented a VMS tool for the program and added protocols to ensure vendor neutrality,  such as establishing distribution lists, managing supplier performance, limiting contact with hiring managers and sending out requisitions to suppliers at the exact same time. It was a well-oiled machine  that elevated our MSP reputation in the marketplace. Suppliers liked working with us to a large degree. Of course, there were those that wanted exclusive opportunities and manager relationships, but our thinking at the time was that it was the MSP’s responsibility to have a fair and equitable program while also removing operational tasks from the hiring manager’s plate. We were in charge of ensuring jobs got filled on time with qualified candidates at the lowest cost. Many MSPs operated this way.

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Eventually, as MSPs matured and client program models evolved, MSPs began creating groups dedicated to evaluating suppliers. Who were the best partners? How many programs were they in? Diversity players were identified, but processes around manager contact, distribution fairness, contract terms and so on remained the same. And for the most part, they still remain today.

But given the lay of the staffing industry, is vendor-neutrality an unavoidable requirement?

The US staffing industry alone has over 28,000 suppliers in its ecosystem. Are they all created equally? Should niche providers have direct access to managers? Should diverse companies get a head start on orders? Is it wrong to value your top performers over lower-performing ones? With technologies changing at a rapid pace, do IT partners need to have live discussions with key stakeholders to find the right candidate?

Consider this: If the spirit of the program is to fill jobs on time with the most qualified candidate at the lowest cost, then the supplier you use needs to be the one who will do just that. You want the best supplier working on your orders, and the only way to get the best is to open your program and allow for the superstars to shine. The old saying, “Life isn’t fair,” may be the answer to whether vendor neutrality is still necessary.

Lisa Fox

Lisa Fox
Lisa Fox is director of strategic solutions at Staffing Industry Analysts.

Lisa Fox

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