Get your Staffing Company to Accept your MSP/VMS Program | DCR Workforce Blog

Get your Staffing Company to Accept your MSP/VMS Program

vms msp programAs America is considering adding a 51st star to the Star – Spangled Banner and the United Kingdom is possibly on the verge of losing Scotland post a referendum on the issue; one point is clearly established. Territorial reorganization can happen without war when we give due importance to people’s choice. It matters. When it comes to business decisions too, it is so much better not to push the decision on everyone and to have all stakeholders willing to adopt the change.

To illustrate, Vendor Management Systems (VMS) were first introduced more than a decade ago to aid in managing staffing agencies and the contract workers they supply. The initial response was great concern regarding the willingness of the staffing vendors to participate in a program where all job orders were controlled through an online system. To further complicate the issue, Managed Services Providers (MSPs) were retained to use the VMS and also act as intermediaries between the client and staffing suppliers. The MSP takes responsibility for the procurement process including supplier selection, supplier recommendation, on-boarding, contract negotiation/standardization, time keeping and supplier payment and compliance oversight. Understandably, there was some resistance from staffing agencies to the change. However, how have attitudes changed over the years? Industry analysts tell us that more than 70% of large corporations depend on a VMS to support their use of temporary workers, and a slightly lower percentage also employ the services of a MSP. Have companies dragged their staffing agencies, screaming and kicking, into these programs, or do the suppliers see benefits to them? The answer is probably both. The more important question is: are you staffing suppliers merely participating, or are they truly engaged and fully committed to your success?

It’s no surprise that the most effective contingent workforce management programs are supported by highly capable and motivated staffing suppliers. These programs have typically established an MSP/VMS program conducted by vendors who ensure that all parties – clients and vendors – benefit from program participation.

Organizations should invest time and effort in getting a consensual agreement from their existing staffing agencies when they adopt VMS/MSP programs. It is possible to alleviate the mood and bring down the wariness and distrust; and to let them know what is in store for them, by setting the right expectations. After all, the programs do introduce a lot of changes and it helps to have everyone geared to make the necessary transition. As in any change management initiative, the secret lies in three critical actions:

  • Uncover the greatest concerns. Talk with key suppliers about the program and solicit their reaction. Make it clear that you plan to implement a program (you aren’t asking their permission) and then discuss what causes the greatest concern, and what would make them most comfortable and committed to the program. Explore concerns regarding rates, access to opportunities, changes to relationships with your company, increased costs, required training, and other factors that may result in resistance to the program. Don’t forget that your hiring managers may have established a list of “go to” vendors, and may also have concerns. Talk with them as well.
  • Design the program following the “give to get” philosophy. Create an incentive-based program in which top performance is rewarded with increased business opportunities.
  • Communicate responses to the most typical questions. Minimize anxiety and increase enthusiasm for the program by providing the answers to typical questions a staffing company may have. We’ve offered a quick list of “Frequently Asked Questions” (FAQs) below:

Will I lose my established association with my customers? How will the vendor stand out from the long list of suppliers serving an MSP, when it loses a direct link to its customers? Will the MSP be able to help the vendor understand the client’s requirements as well as, when it interacted with the customer directly?

Will I be affected by a lack of access to information after the candidate is placed? Will the information about the vendor’s candidates get added to a database, to which other will have access? Will it lose the candidates and the business built painstakingly over a period of time; especially when I asked to send information through another supplier?

Can I be sure that the MSP will act with complete neutrality? If the vendor chosen to serve as the MSP or provide the VMS also is affiliated with a competing staffing agency, what assurance is there of a balanced, fair, objective process regarding distribution of job requirements and consideration of candidates?

I do not want to learn to use the VMS system? What effort does it take to come up to speed on the new VMS system? What training will be provided? Who pays for the training? How is it delivered? What ongoing support can the vendor expect when problems are encountered? Who will provide the support? How does all of this fit with the vendor’s existing ATS and time recording system? Will the vendor recruiters have to duplicate efforts in terms of data entry?

What do I get out of this? Is there any upside for the vendors? Can they expect lower costs, faster payments or additional opportunities?

There is no doubt that the VMS provides a customer with great control over their use of contingent workers, along with complete transparency over how their contingent worker program is operating. A VMS/MSP program can be equally beneficial to suppliers if the client. MSP and suppliers choose to work together to design and implement a balanced program. If you are a staffing company which has reservations towards a client’s adaptation of a VMS/MSP program, you just have to remember that communication is the best answer to most issues and concerns. So just work with your client to make sure that all your concerns are addressed and weeded out.

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.