The 4 Groups that Will Try to Kill your MSP/VMS Program: What to Do about Them | DCR Workforce Blog

The 4 Groups that Will Try to Kill your MSP/VMS Program: What to Do about Them

The number of temporary workers is rising and, with it, the adoption of programs and systems aimed at managing the use of those works.  Staffing Industry Analysts tells us that more than 70% of America’s largest employers are using a Vendor Management System (VMS), and nearly as many have outsourced responsibility for their contingent workforce management (CWM) program to a Managed Services Provider (MSP).  But with any such adoption of a new technology and process, we can expect strong resistance from the various players who will be impacted by the changes to the process.  If any of these groups fail to actively participate, then your program is dead on arrival.

Let us take stock of the four stakeholder groups who will be impacted by the change:

  1. Internal hiring managers typically pose the greatest resistance to enterprise-wide contingent workforce management programs.  This is truly ironic, as internal business managers are the “customer” of the functions that source vendors to provide MSP/VMS solutions.  Companies engage contingent workers at the request of internal hiring managers who need additional assistance in meeting business needs.  As teams of Procurement and Human Resources personnel vie for “ownership of the contingent workforce”, the needs of the internal hiring managers may get buried under the desire for reduced corporate costs and risks.  In exploring the causes of “rogue spend” hiring managers often tell us that they have gone outside the program and established their own relationships with temps and staffing agencies because the internal functions failed to understand or meet their needs.
  2. Human Resources staff may fear that the shifting of responsibility for temporary workers to a third party may diminish the importance of their role.  While the intent is to free up HR personnel to focus on activities of higher value to their company, some companies have viewed the introduction of an MSP program as an opportunity for a ‘reduction in force’.
  3. The IT department is responsible for ensuring that all enterprise applications meet the needs of internal clients, can be supported, do not threaten the security or integrity of the company, and can work together with other enterprise applications.  When not directly involved in the process of selecting a VMS system, IT personnel may view it as an unnecessary headache.
  4. Staffing agencies fear the impact that the introduction of an intermediary (the MSP) will have on their relationships with hiring managers.  The introduction of a CWM program typically brings with it standardized rates, a disciplined approach to determining how requirements are distributed, standardized rates, and greater scrutiny of each supplier’s performance.  To make matters worse, most VMS programs are supplier funded, further decreasing the staffing company’s income.

While it’s easy to say that people naturally resist change, we think that you would agree that each of the groups described above have legitimate causes for concern.  Fortunately, the best MSP/VMS firms proactively address these concerns throughout the life of the program.  Your program should include the following:

  • Hiring managers should be active participants in the design of the program. As implementation begins, discussions with hiring managers should highlight what is and isn’t working, suggestions and concerns.
  • An assessment of current staffing suppliers should go beyond the numbers to examine why hiring managers choose to work with or avoid any given vendor. If a hiring manager’s preferred vendor does not qualify for program inclusion, explain why and consider actions to be taken to enable the vendor to meet the needed qualifications.
  • The benefits of active program participation should be explained to the hiring managers.  Describe the impact the program will have on finding top talent, rapidly filling positions, dealing with personnel issues, and reducing unplanned attrition.
  • Clearly delineate roles and responsibilities of HR and MSP staff, positioning the MSP team as an extension of the internal Human Resources department.  The VMS should provide the reporting and analytics capabilities necessary to enable internal HR personnel to monitor program performance, identifying ways to strategically increase workforce performance.
  • Work with IT to ensure that all issues regarding VMS reliability, security, scalability, and supportability are addressed.  Be sure that the VMS provider will provide technical and user support, and negotiate service level agreements that meet the needs of the internal IT team.  A cloud-based system should be considered, as it significantly reduces the burden on internal IT support personnel.
  • Ensure that the program is designed to benefit participating suppliers. The program should reward top performers with increased business opportunities.  It should also reduce administrative costs associated with billing and other activities.  Supplier training and ongoing support must also be readily available.  Provide feedback mechanisms for suppliers that enable them to suggest program enhancements or surface issues that impact their ability to meet program goals.

Share with us actions you have taken to encourage your co-workers and supplier network to embrace your CWM program.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.