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Challenges, Advantages and Finest Practices for Working with VMS/MSPs in Staffing


In line with a latest Staffing Business Analyst report, over 81% of firms with greater than 1,000 workers within the US use a Vendor Administration System (VMS).

For staffing corporations who need these contracts, working with a VMS or a Managed Service Supplier (MSP) is an unavoidable actuality. Whereas among the challenges are well-known amongst most staffing professionals, VMS enterprise doesn’t have to only be a “obligatory evil” — working with these distributors and techniques also can profit staffing corporations who put within the effort to do it proper.

With that in thoughts, let’s dive deeper into the challenges, advantages and greatest practices of working with VMS/MSPs in staffing.

High Challenges

VMS and MSPs typically get a nasty rap amongst professionals within the staffing trade. The destructive connotation can stem from challenges like these:

Decrease revenue margins. To even be thought-about for a spot on a VMS vendor record, staffing companies typically should decrease their charges, which might eat into revenue margins.

Lack of private connection. As a result of the VMS mannequin eliminates private contact with hiring managers, recruiting professionals typically are left with unanswered questions on key desired traits for a place, like persona match.

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Stiff competitors. A typical VMS itemizing has 30-40 distributors competing. And since there’s no contact with a hiring supervisor, the choice largely comes down to cost.

Hiring challenges. To compete for positions, staffing corporations will need to have sturdy recruiters — however many sturdy recruiters don’t need to work within the high-pressure, low-margin VMS surroundings. This conundrum could cause hiring challenges.

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High Advantages

Whereas at instances difficult, there are additionally advantages and alternatives with regards to working inside VMS/MSP techniques.

Discover new enterprise. As extra firms use VMS system to fill positions — and as different recruitment firms fail to leap on board — a gentle provide of accessible enterprise might help drive firm progress.

Match candidates effectively. Within the conventional staffing course of, understanding the consumer’s wants and matching them with candidates takes time. With VMS, every thing it is advisable to know is accessible instantly, and you should use analytics and sorting to answer your shoppers quickly and effectively.

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Keep away from communication gaps. At a busy staffing agency, it isn’t at all times attainable for the consumer to succeed in the precise proper particular person, which might trigger communication delays. However with VMS proxy or delegate options, a coworker can step in and fill the hole to stop any hiccups.

Monitor the recruitment course of and use knowledge to enhance. Utilizing a VMS, staffing corporations can observe the whole candidate lifecycle right down to a really granular stage of knowledge. These analytics, comparable to what number of calls required, turnover charges, backside line price, and so on., might help staffing corporations enhance their processes.

Finest Practices

Lastly, let’s discuss greatest practices for staffing corporations who do use a VMS system. You may make your life simpler by following these VMS ideas:

Affirm time entry. Make time every week to make sure that what’s within the system matches up with what you recognize to be true. If points come up, contact your VMS or MSP billing difficulty assist system instantly.

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Test for rejected time playing cards. For those who’re seeing rejected time in your system, it’s necessary to maintain up on it and just remember to’re following as much as appropriate and resubmit.

Double-check your invoice and pay charges. Small errors right here can have penalties. Test that your invoice and pay charges are appropriate within the system.

Add all documentation. It’s crucial that new workers have appropriate paperwork within the system earlier than they begin on a job. If not, you won’t receives a commission.

Measure your metrics. Ensure that to trace and report on metrics like gross margin, variety of requisitions per 30 days, submission-to-hire ratio, and so on. It will assist you to know the true worth of VMS enterprise on your company.

We hope this text was illuminating with regards to doing VMS enterprise. Whereas difficult, VMS and MSP enterprise also can present vital alternatives for these staffing corporations who do it proper.