When engaging the services of staffing specialists, industry jargon can often be a barrier to understanding the best option for your business. The emergence of increasingly complex recruitment models has created a landscape where the myriad of managed service options can be confusing.
But by knowing the distinction between master vendor, hybrid and vendor neutral MSP, hiring managers can make informed decisions when choosing a staffing partner.
The dawn of MSP
A managed service provider (MSP) takes on the primary responsibility of managing candidate selection for non-permanent roles - including process and supply chain management, and supplying and configuring the online vendor management system. The MSP model emerged at a time when employers wanted better value and visibility from their temporary staffing solutions, as their reliance on contingent labour began to grow.
In the early days, recruiters responded by offering favourable rates and greater efficiencies to take complete control of contingent workforces – essentially creating the master vendor MSP model in the process. However, it was not long before flaws in this model were recognised, most notably the fact that the client’s needs were often overshadowed by the master vendor’s singular desire to maximise profits.
What is vendor neutral MSP?
Unlike the master vendor model, where the workforce solutions provider itself - and perhaps its sister companies - have the first opportunities to fill roles, the vendor neutral MSP model is far more inclusive. It offers more choice.
The MSP partners with an agreed list of diverse suppliers, which are all given a fair opportunity to put forward candidates.
A Vendor Management System – or VMS, such as Comensura’s cnet system – is used to manage the candidate selection process. As a result, unconscious bias is reduced, and successful candidates are picked solely because they’re the best match with a hiring manager’s needs. This fair, open, transparent model enables organisations to build contingent workforces that best fit their business requirements.
Neutral rates and agreements create a competitive market that is based on supplier performance alone - not the size of the supplier, or who plays golf with who at the weekend.
What’s more, an MSP can rank suppliers via a tiered system based on a balanced scorecard. Rankings are performance-based and analysed by software to ensure they are completely objective. Irrespective of a supplier’s size, they are tiered based solely on their ability to meet set performance targets. This system also has the benefit of enabling the MSP to identify underperforming agencies, so they can advise where improvements can be made.
What are the benefits of vendor neutral MSP?
It is clear that, when it comes to fairness, transparency and access to talent, the vendor neutral MSP model trumps the more traditional master vendor option. And due to the increased supplier competition that it opens up, vendor neutral MSP can reduce costs substantially.
It is also worth noting that the vendor neutral MSP model lends itself particularly well to specialist roles. Unsurprisingly, hiring managers routinely report that master vendor providers are often unable to deliver on more complex needs or niche talent requirements, which has further driven the need for a new approach where smaller, specialist suppliers can be utilised alongside the larger suppliers.
As we touched on above, the vendor neutral MSP model also ensures objective decisions are made - decisions based purely on performance and candidate fit, rather than personal relationships. As a result, the best person for the job is identified every time. No one supplier is given preference based on human intervention or bias; jobs are opened up to each tier on a staggered basis that is fair to the entire supply chain. The system also selects candidates based on how well they match against set criteria, with software managing the pre-screening so that decisions are made without subjective influencers.
At a time when Companies House data suggests there are now more than 40,000 recruitment agencies in the UK – with no single supplier holding more than 5% of the market – it’s obvious that no one vendor can deliver everything a client needs.
In the simplest terms, the vendor neutral model can be likened to consumers choosing to shop at ASOS rather than M&S. Search for a blue t-shirt on the M&S site, and you’re likely to find one. But search for a blue t-shirt on ASOS and the breadth of offerings from a large, diverse supply chain of partners means you’ll almost certainly find one that fits your requirements exactly.
Of course, for some hiring managers in certain sectors, master vendor providers may be able to offer enough to meet their needs. However, for those who value access to a deep and wide talent pool alongside the other benefits a competitive market brings, vendor neutral MSP is likely to be their best option.
Want to find out more about our vendor neutral MSP model? Contact the team today.